What does the Hunt Budget reveal?
That unionist politicians are taking Scottish unionists for a ride down a slippery slope to a future of being poorer
In a letter to The Herald on 5th. March, the day before the Budget, I warned readers that the Chancellor’s Budget speech was not the Budget, just what he would like them believe; that the actual Budget was contained in the Red Book and other official documents which only become available once he sits down; and that in the few days it takes economists to analyse the detail and report their findings in the media, a very different view of the so-called Budget would emerge from that presented by Mr. Hunt. And so it has come to pass.
The critics have been piling in, with the most vehement coming from right-wing economists and traditional Tory voters. Claims of tax reductions turn out to be a bigger tax rise, with pensioners and low paid workers, along with others, hit hard. Growth figures are fake: forecasts many years ahead that no one can prove or disprove because they have not happened, and the ones making them will by then have disappeared from political life.
The post-budget hammering of the government will fill the air for some time. What you might call the normal activity of day-to-day politics. But the independence movement activists should use the Hunt Budget as a gift, for a different purpose.
That purpose, as I emphasised in the first essay on Yes Think, is to undermine the Scottish unionists’ mythical belief that we are economically and socially damned if we lose the protection of powerful England. We should use the Budget to drive home the message that we are tied to a decaying, declining British state that is no longer powerful, but so weak it is no longer able to take decisions on its economic condition, and future, or in the discharge of its state duties, as an autonomous entity. We should make it a “King has no clothes” moment, when the naked truth of decline is there for all unionists to see.
Tell the unionists about the debt trap
We don’t need to look outside of the circles that are usually seen to support a Tory administration for the evidence. Economists and commentators in the establishment media are the supply chain. Professor David Miles of the Office of Budget Responsibility submitted to Parliament what Ambrose Evens-Pritchard described as a ‘forensic analysis’ that spelled out the ‘contours of our fools paradise.’ Public debt has soared from 40pc to 100pc of GDP in two decades. Because, as his headline put it in The Daily Telegraph business pages “Britain is living beyond its means” it is in a debt trap, that would require it to have a budget surplus of £30bn a year – a year – to stand still.
A budget surplus of even £1 is for the birds. In 2022-23 the deficit, that is the difference between what the government got in tax and what it spent, was £87.4bn. This April 2023-24 it will be £93.7bn. There would not be one school open, no train or bus would run, and local government would collapse if any UK government tried to get a budget surplus of £30bn year after year. There is no escape from the debt trap – the government, whatever its political make up as Labour will discover, will need to keep borrowing and borrowing. The national debt will keep rising and the interest to be paid will keep increasing; and as the debt interest keeps rising, the more there will be dep cuts to what makes civil society worth living in.
The debt trap also has profound political implications about just how much a UK government is genuinely independent, and determines whether it can or cannot carry out its primary functions of maintaining law and order within the country, and defending it from potential adversaries.
The inescapable fact that unionists should be confronted with is that the UK is not master of its economic life. If UK needs to borrow, and borrow and borrow to meet expenditure, as it does, those it borrows from set the rate of interest, and the levels of debt repayment; and if they know UK cannot do without their cash, then they can demand a higher interest premium. In addition, if the lenders come to question whether the UK is able to pay them back, thereby increasing the risk they take in lending, they charge an even higher rate of interest.
Although the UK is not regarded as a debt default risk, and its bonds are not junk status, it is nevertheless wholly dependent on its ability to meet all its statutory and discretionary payments to the NHS, defence, pensions and a host of other commitments, on the willingness of those who lend it money to keep doing so. Hardly the powerful economic force unionists told us in 2014 that is Scotland’s permanent saviour.
Self-delusion on Defence
When the Chancellor in his 6th. March budget speech made a passing reference to defence spending, the cameras in the House of Commons panned to the defence secretary, who showed no enthusiasm for the claim. Which was “Our armed forces remain the most professional and best funded in Europe with defence spending already more than 2 per cent of GDP.” There was then a promise to get to 2.5 per cent of GDP when economic circumstances allow.
Part of that statement is a meaningless boast because there is no way he would know how professional or otherwise armed forces of, say, France, Poland, Norway, Finland, and Sweden, are compared to the UK. The claim to be the best funded is false. Poland spends 5 per cent of GDP on defence. It has a regular force of 150,000, plus 30,000 trained people in reserve, which it aims to increase to 300,000 by 2035. Finland, with a population of 5.5m has a regular force of 23,800 and 900,000 trained reserves. Britain has the smallest army since Napoleonic times, and, in the view of military strategies, doubtful if could put a full division into the battlefield.
A former chief of the defence staff, Lord Stirrup, described Hunt’s brief mention of defence expenditure as “like someone muttering about one day taking out adequate insurance while the house burns down around their ears.” Hunt’s boast was made despite the evidence that it was manifestly untrue. He must have seen the Daily Telegraph front page splash of 5th January “Navy has so few sailors ships must be scrapped,” which told of HM S Westminster and HMS Argyll, although in good working order, the former having been expensively upgraded, being decommissioned so their sailors could go to other ships, due to a severe shortage of trained recruits. His attention must have been drawn well before the budget to Andrew Neil, in his Daily Mail piece on 10th. February, pointing out that the carrier HMS Elizabeth had only 8 F-35b planes on board instead of the 36 it was built to carry.
Recruitment by the Royal Navy and Marines dropped by 2.1 per cent, RAF by 17 per cent, and Army by 15 per cent compared to last year.
Hunt is an example of what unionist politicians continue to do: punt falsehoods about how the UK remains a Tier 1 economy with a Tier 1 military able to project hard force around not just Europe but the world (remember HMS Elizabeth’s venture to the Pacific) when the reality is the opposite. It is skint, broken Britain we Scots for independence need to expose to our fellow unionist citizens. They are being taken for a ride down a slope to future of being poor.
Nothing can drive home the message of broken Britain more than to draw attention to the central fact of the Budget: that if Hunt increased defence expenditure to meet the need that its military commanders say is now essential, he could not cut National Insurance by 2 per cent. That’s the price of the debt trap.