Triangulations, Third Ways and New Deals are all euphamisms for playing ‘Hide and Seek’ with reality. But reality is famously persistant and you can’t hide for long before it finds you. Then the game is up.
And even the ludicrously partisan BBC has to admit that the Labour government has a serious problem on the horizon:
“The Office for National Statistics said on Wednesday that the government’s coffers were £2.5bn in surplus last month, down by more than half on the same period last year, and well short of the £4.3bn predicted by analysts.”
The article points the finger at lower corporate tax takings but the real reason is that HMG has crossed over the Laffer Curve and further tax hikes will only result in diminishing returns.
This is a deeply worrying problem for a government that has ridden to power on the promise of an endless supply of lovely lolly to their core supporters in the public sector. That same public sector took them at their word and grows more militant by the day in its demands that HMG now cash the blank cheque they recklessly wrote to buy the election.
So the pot is empty and Chancellor Brown is left only with the option of massive borrowing to fund further spending. That means going back to the ‘bad old days’ of the 1970′s; something which Tony Blair has said repeatedly he is not prepared to countenance.
‘Hey reality, HMG is in the cupboard under the stairs’.