One-quarter of negative growth does not constitute a triple-dip recession ("UK economy stands on brink of triple-dip recession", The Herald, January 25).
Two quarters in succession are needed. But there can be no argument that economic stagnation drags on and will continue to do so, probably for years. We, and the rest of the Western democracies, are in an almighty mess, one which voters have brought upon themselves.
Whatever happened to the Victorian virtues of honour, honesty, modesty, privacy, respectability, good manners, thrift and self-reliance? These days too many people parade the self, pursue instant gratification and conspicuous consumption funded by debt, and have an expectation of something for nothing. In pursuit of votes and ephemeral power and self-aggrandisement, our politicians have pandered to this demotic drift into depravity. They, in cahoots with self-serving public professionals, have forced up public spending in a disingenuous worship of fairness and equality of income. As a result, the political class has debauched the public finances, printed money and cut interest rates, and facilitated cheap credit creation by a banking industry many of whose leading lights do not understand the meaning of honourable behaviour.
It was not always so. As recently as 2000, according to the most recent Economic Outlook of the OECD, public spending in the UK took only 36.6% of Gross Domestic Product, and was almost totally covered by tax revenues. Then Gordon Brown turned on the taps of borrowing to raise spending to 44% of an expanded GDP in 2006. This was no more than a debt-fuelled mirage. But public spending growth is easier to start, stop and reverse when boom turns to bust. Today it stands at 49% of GDP, having peaked at 50.2% in 2010.
Nonetheless, Labour and the Nationalists demand more spending in the mistaken belief this will raise tax revenues (through greater growth) by an amount in excess of the borrowing necessary to fund that extra spending. It will not. The UK has an open economy, so increased public spending eventually leaks away as spending abroad, thereby reducing the growth in tax revenues at home. The annual public deficit widens and the national debt grows ever more rapidly. With tax revenues yielding 42.4% of GDP, we are at the limits of taxation without causing a flight of capital and a severe erosion of the home tax base. Rather, it is public spending on working-age welfare, foreign aid, green energy, the NHS and education that must be cut, to reduce the pressure of cuts on other public services like defence, care of the elderly and the disabled, transport and capital investment.
Despite rows about slashing spending to the bone, the Coalition Government is losing control of public finances because the Liberal Democrat tail is wagging the Tory dog and blocking necessary cuts. However, putting Labour in charge at Westminster, or voting for Scottish independence, would be to invite total disaster.
Voting Conservative at least offers the opportunity to rid ourselves of the billions of pounds in costs with which we are burdened because of our membership of the EU.
Richard Mowbray,
14 Ancaster Drive,
Glasgow.
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