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Confidence: It's a funny old game

Politics, like football can be a game of two halves. Can this government be radical enough to win the game?

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Can we get our hands on the prize without confidence?
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Simon Miller
On 7 December 2012 13:58

Confidence is a strange and fickle beast. If a team has had a run of bad results, a 6-1 result against a team my grandmother could have probably beaten single-handedly may lead to an upturn in their style of play, in turn leading to a series of wins – such is that thin line between success and failure in sport.

Unfortunately for politicians, the recession is plodding along with no sign of an upturn in sight, and there is no overpaid striker to suddenly remember his wages are meant to be in return for goals. No, for the government there is a desperate hope that someone or something will come along to change the scoreline.

The problem is that, to further stretch this analogy into incredulity, the government has acted more like West Ham in the first half against Chelsea last weekend, rather than the second.

From the very start of the coalition the plays have been defensive and, to me, politically backwards. Instead of riding the wave of serious times, serious measures, and implementing serious cuts at the beginning of their term, the coalition loaded onto the “ordinary working taxpayer” fwith rises in duties and taxes whilst cutting tax relief.

These so-called cuts in public services that form the BBC and Guardian narratives have more to do with the obscene spending priorities of local government and their compatriots in government and national broadcasting than government policy.

Take libraries; My local council has actually improved the hours of my library – although I wonder whether actually stocking books in them is still a priority – but at the same time, they still have money for daft
publicity campaigns, an over paid chief executive, and various middle managers.

But then again my council is relatively rich; what about the poorer councils? The last thing the middle managers – who inevitably decide these things – will want to see is their own jobs gone so that’s easy; hit libraries, hit social clubs, hit anything apart from the council’s own employment and spending priorities since you can blame all that on the government.

And it is the same with the BBC. That vast corporation has spent millions moving people to Salford in its deal with Gordon Brown and the license fee freeze agreed with George Osborne. What is more, tt has managed to bloat itself into seven units: BBC Vision, BBC Audio & Music, BBC Future Media, BBC Operations, BBC Finance & Business, BBC News Group, and BBC North.

Now what’s the bet that those in charge of staffing insisted that each of these needed managers, outreach workers, diversity and compliance officers, let alone day-to-day office staff? Instead of cutting the chaff, the BBC hit producers, journalists, and production staff with redundancies. The broadcaster is now fully embracing its inner bureaucrat.

And it is this bureaucratic instinct that is draining confidence. Bureaucrats hate innovation. Keep the ship steady, keep it moving forwards, even if it is holed and is heading towards a storm.

The government desperately tried to keep the bureaucrats and the client state on side. But they won’t. This government will never get those votes.

This government has crept and inched along, bringing an appalling spending rate up to over a trillion and a net debt that is fast closing in on total GDP. Instead of having the confidence to take millions out of tax all together, instead of lowering tax rates – both private and corporate – instead of making cuts that either closed whole departments or at least only kept essential staff (you know nursing resources rather than human resources), instead of shutting Quangos and taming the bureaucrats at the Beeb, this government has failed to show any confidence.

And in business terms, confidence is important. There are billions of pounds sitting in companies at the moment because they have no confidence in the direction this country is going.

However, there is small degree of hope.

Figures released this week saw outward and inward investment positions reach record highs in 2011 (£1098.2bn and £766.2bn respectively) but it isn’t good enough.

Despite earnings from investment in the UK increasing from £37.6bn in 2010 to £43.6bn in 2011 – showing that there is still money to be made in our country – there is still a fall in inward direct investment,
decreasing to £31.9bn, the smallest inflow since 2004.

It all boils down to confidence. Political confidence to do what is right, not what gets the screaming headlines. Organisational confidence, to get the right cuts in the right places and, yes in these days of spin, presentational confidence to argue why these actions are necessary.

The key is to unlock it. The government has not made any difficult choices yet. What Osborne did on Wednesday was a political necessity but it was a necessity brought on by timidity.

What we need is a different strategy, something radical, something that will annoy the bureaucrats. What we need is money back in the pockets of producers and consumers alike. Instead of drip feeding one percent corporation tax and personal cuts – which will probably be made up elsewhere – introduce large cuts immediately. Don’t take two years, take two months. Don’t be fiscally neutral, be fiscally radical.

We are at half-time at the moment. Make no mistake, we are in serious straits but continuing the status quo, continuing the Brown/Balls formula is not working. Putting eleven men behind the ball is not working and we need to push up if we are to win this game.

Simon Miller is a Contributing Editor to The Commentator

Read more on: Simon Miller, uk economy, Simon Miller and UK economy, UK economic growth, george osborne, and Gordon Brown
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