POLITICAL INEPTITUDE RULES

ECONOMIC PERSPECTIVES 155 – OCTOBER 2024

It’s common for government policies to fall short of expectations. For example, there may be a policy intention to keep annual price inflation down to 2pc, and then to find that prices have risen by 2.5pc. However, this is a deviation that the public can live with, and that government can probably explain. But it’s far more serious when official policies produce results  that are diametrically opposed to what was intended. 

Yet, the new bunch in Westminster, far from tackling its inherited debt mountain, is stoking the fiscal fire.

Despite professing fiscal competence before the election, and expressing the imperative need to maintain control over government spending, the new Chancellor now presides over £13.7 billion of public debt, much of it a legacy of Tory deceit and sheer fiscal incompetence. This exceeds the nation’s entire GDP – and is, incidentally, the highest deficit since the 1960s.

Admitting they got it wrong

It is true that Covid handed panicky officials a free pass to do as they pleased (or what they thought best) in the face of a viral disease of unknown origins. But, as ever, the actions of headless chickens in Whitehall contributed hugely to the creation of this debt-ridden financial fiasco. Health trusts acquired some 20 temporary hospital units at immense cost, most of them never being brought into service. They procured ventilators and personal protective equipment (PPE) from profiteering opportunists all over the world at make-believe prices, much of it unfit for purpose. 

Although it is rare for policy overlords to concede that egregious errors were made, we now have just such an admission from Chris Whitty, the health minister’s chief medical officer during the pandemic. Matt Hancock was the control-freak who openly deferred to Whitty, claiming “the Prof is pivotal” - as Hancock  strived to terrify the nation into obeying his draconian Covid rules. Yet now, at the inevitable public enquiry, Whitty concedes that the strictures inflicted by Hancock (with his backing) went too far and that, in hindsight, lockdown may have caused more damage than it prevented. He admits that casting 2.3 million people into isolation “caused significant harm”, because ministers put “protecting the NHS” ahead of caring for its users. 

Yet the world’s health czars have not relented despite being publicly shamed in many countries following the pandemic. The World Health Organisation’s  international health regulations (IHR) will, unless stopped, formalise new powers to implement vaccine mandates, to close borders and enforce quarantines during future pandemics. Once adopted, these powers will be mandatory as instruments of international law unless our government chooses to save its sovereignty by rejecting the new IHR amendments. 

In a clip of its proceedings a senior executive of the WHO admitted: ”Prioritising actions that may restrict individual liberties, etc……are all necessary during a pandemic.” Losing control over this crucial area of public health policy does not appear to bother our present Whitehall incumbents, yet their work on the “Pandemic Preparedness Treaty” will cost taxpayers billions. While Chancellor Rachel Reeves insists that there’s a £20 billion hole in the accounts bequeathed by the previous government, you can bet she’ll find the money to waste on financing the WHO’s latest erosion of personal freedoms – as well as funding international aid, extravagant public sector pay awards, housing illegal immigrants and the host of other virtue-signalling globalist projects that no one actually voted for.

Protecting civil freedoms

Members of the Conservative government that presided over the tyrannical measures inflicted during Covid, should hang their heads in shame. They completely failed to recognise that the duty of every government is not only to save the lives of its citizens, but also to protect the civil liberties without which those lives are scarcely worth living. So much the better if policy objectives can be achieved without inflicting harm. But when overall objectives themselves are so misguided as to be inherently destructive, there’s little point in discussing policies aimed at their achievement. 

The sheer ineptitude of government’s Covid-era attempts to rescue our economy from the ruins of its own  remedial meddling is now revealed in an official report just published by the Department for Business and Trade. This report addresses the multitude of give-aways intended to save marginally viable businesses from insolvency caused by the government’s own terror regime – a regime that forced entire sectors to shut-up-shop for want of customers. 

Impact on the economy

The 100-page report concludes that three quarters of the businesses that benefited from £23bn of Covid-era grants would have remained viable without state support. In essence, most of the businesses that received bail-out money didn’t need it. Miscalculation on such a scale is what happens when action contrived collectively usurps natural responses born of individual human action. Nor did the report end there; it highlights the finding of the National Audit Office that the largesse showered on the business community under the furlough and business loans schemes failed to include anti-fraud measures and hence that £7.3bn of fraud related to Covid-era support schemes was perpetrated with impunity. The legacy of ill-conceived and misdirected remedies, notably successive lockdowns, includes 2.8m people who are neither in work nor looking for a job, many in poor mental health, suffering from anxiety and depression. So many entered the benefits system from which it’s now impossible to be weaned.

Our new Energy Secretary, Ed Miliband, is an ardent participant in the net zero drive. But he has been severely admonished by Gary Smith, boss of General & Municipal Workers’ Union (GMB), who fears for the future of UK manufacturing capability following Tata Steel’s decision to close its plants in South Wales and the UK government’s crackdown on North Sea oil and gas production. 100 years ago the UK produced almost half the world’s steel. Today we barely register. Despite Miliband’s frantic determination to decarbonise at all costs, our economy remains highly dependent on fossil fuels for our energy needs and is correspondingly more reliant on overseas suppliers who have no comparable regard for the demands of net zero.

If, say, we were to find that China or Russia are our enemies we would not wish to depend on them for the supply of military materials needed for our defence. Yet this is where the race to decarbonise is taking us. If the drive to decarbonise were a market-driven process we might feel more confident – but its anti-competitive thrust is wholly politically motivated.

AI to the rescue

Redundant miners and steelworkers should take heart from artificial intelligence (AI). It will come to their aid when the work of so-called ‘professions’ is far more economically performed by computer platforms such as ChatGPT, which produces high-quality drafts within seconds. The charity run by my wife and I raises funds by hosting classical chamber-music concerts, for which I produce programme notes. Although ChatGPT creates excellent drafts, I certainly need to check its references to subtleties such as the impact of key-changes – but with its help there is a significant saving in time. Since much of the output of lawyers, account-scribblers and financial report-writers is repetitive, inconsequential pap that no one actually bothers to read, it is virtually certain that much of it will in future be AI-compiled. Where that pitches their excessive hourly charge-out rates will be decided by the ageless laws of competition in the market place. But any out-of-work plumbers, bricklayers, traders and their manual-labouring colleagues will possess the skills most prized in the jobs market. No need to waste three years acquiring a degree from an academic institution with a politically woke agenda that no longer meets the needs of anyone real.

[EMILE WOOLF OCTOBER 2024]