LIMITS OF DEMOCRACY

In the winter of 1459, Henry VI called a Parliament in order to pass wholesale acts of attainder against the Yorkist rebels whom he had just defeated in battle. The savage and vengeful measures of the "Parliament of Devils" contributed to the continuation of the Wars of the Roses which condemned Great Britain to another quarter century of political violence and mis-rule. Were such a name be given to the UK assembly elected in the summer of 2024 it would be considered odd, not least because the decline of Christian religion has rendered the Devil almost invisible behind a veil of ignorance and moral relativism. The title would also be challenged by those who think it is the primary duty of government to re-distribute wealth on the grounds of "fairness" rather than actual need.

However, the "Parliament of Morons" may, in time, come to be seen as apposite. For the budget outlined on Wednesday 30th October 2024 has got to be one of the most colossally stupid set of proposals ever to come out of the UK Treasury. And can one seriously doubt the low levels of objectivity and intelligence on the part of those baying benches of MPs who cheered their Chancellor to the echo and baited the much diminished opposition benches with their foolish jeers? The rhetoric of the class warrior, the student demo and the perpetually aggrieved may have been supressed by the Son of A Toolmaker, but the spirit of Jeremy Corbyn most definitely lives on amongst the lumpen-polytechnic comrades.

By the standards of budgets of the last 25 years, admittedly a low bar, the proposal delivered by Rachel Reeves was a car crash which failed even in its own terms. Billed as a budget for "growth", the OBR responded by promptly downgrading its already vestigial expectations for GDP while raising its forecasts for inflation. After the foolishness of Truss in failing to inform the OBR of the details of her own free market ambitions, Reeves was taking no chances with this apparently omniscient totem of the un-elected quangocracy. Not that the OBR was appeased by her genuflections; it poured scorn too on her much trumpeted "discovery of a BLACK HOLE" in the finances bequeathed by the hated Tories. 

There was also the preposterous claim the budget was one for "investment". About the only detail which made any sense was the promise to complete the much needed upgrade to railway infrastructure in the north of England. The rest was an amateurish attempt to shift what is plainly day - to - day spending into the capital account and to pretend the resultant ledger did not thereby mean an increase in borrowings. Because government spending is really an asset, right? Not even Gordon Brown attempted these ludicrous sleights of hand at such a scale.

As for what the government deems investible, the sums are truly gargantuan. £5.1bn is being turned over to projects involved with "green hydrogen, carbon capture and storage". All the experts agree that these technologies are at the most challenging end of a zero emissions world, but that is not putting off the high priest of carbon juju, Ed Milliband. Over £6bn is being handed over to rebuild "portacabin" schools, a sum that should guarantee gold taps in every gender neutral bog in the secondary sector. Naturally, the real priorities have been ignored. There was nothing about support for prisons or investment in the delivery of justice. Indeed, these vital functions of a safe and properly functioning society are expected to tighten their belts further. The MOD is to get another £2.7 bn, about the same amount as is spent by the UK on publicly funded healthcare in a week. At least that should guarantee the pensions of the "army" of MOD  civilian apparatchiks, whose numbers now exceed those of serving personnel in the the Navy and RAF combined.

Because, needless to say the biggest winner was "Our NHS". This vast, decayed, useless and dying carbuncle is presently absorbing £530,000,000 per day, over a third more than was hosed at it in 2019. It has to be seriously questioned whether it is physically possible to spend that amount of cash, spouting at that rate, on healthcare. But no matter; Reeves has promised another cash injection of £26bn. If anyone doubts all this spending will be effective, there is a new quango laughably called the Office For Value For Money to check. It's a sort of job share with the NAO where the same tasks will cost twice as much to perform. With the £25bn rise in employer contributions to NI, it will be private business which will be holding the bucket as all this money is poured down the drain.  

Ah yes - business. Reeves also thinks that the white elephants she has allowed to run amok will attract private investment. She might as well whistle in the wind having clobbered the private sector with substantial additional costs in the form of an inflation busting rise in the minimum wage as well as the NI surcharge. Such is the derangement of the net zero agenda, penalty taxes on what is left of the UK oil industry have also been extended, notwithstanding a fall in the oil price. Not content with that, the hands of the state will now dip into the agricultural sector too, where a change in the rules of inheritance tax are likely to see an enormous and quite needless change in the patterns of land ownership, to the detriment of domestic food production and the stewardship of the landscape.

In the wake of the budget, there have been the usual squeaks of lobby - fed outrage in the press and the tedious lists of "winners and losers". Many column inches have been filled with spurious predictions for various economic and financial indicators, most of which will prove to be plain wrong and not in a good way. The big picture however, has been missed. 

Which is that the Reeves budget is the most explicit repudiation of the mixed economy since the Second World War. Tax as a proportion of GDP is set to exceed the levels reached in 1948 when the state was engaged in reconstruction and the biggest shift in asset ownership since the English Reformation. By 2030, on current forecasts the state will account for nearly 45% of the UK economy and total debt will still be hovering near 100% of national output. 

The second lesson is the Blairite approval of private wealth creation has been comprehensively spurned. Marginal rates of tax on risk taking have gone up across the board; indeed listening to Reeves talking about agricultural land, you would think that all forms of private investment is a fiddle which is barely to be tolerated. The scope of inheritance tax has been widened and thresholds frozen; the Tories must be ruing the day when they did not just scrap this wretched levy altogether.

The final lesson is the Labour Party is the party of the unreformed public sector. Public sector workers, who have already received inflation busting wage settlements will be largely immune from the budget's measures. Indeed, the budget was explicitly crafted to shield and further reward them; certainly the charlatans at the BMA and NHS Confederation will be well pleased. For in the government's eyes, the private sector exists not in symbiosis with the state, but explicitly to serve it. As far as Reeves is concerned, you work for her, not for yourself. The market measures of success and optimal resource allocation have been philosophically rejected in a way which might even have surprised Tony Benn. The direction of travel has been well and truly set.

The observant will notice the term "Parliament of Morons" should embrace all its members and not just those who sit on its Labour benches. The Conservative Party has been so complicit in the socialist drift of the past twenty five years that it was hard to distinguish it from the Labour Party. Indeed Cameron explicitly described himself as the heir to Blair and his interval of "austerity" was anything but, as total government debt continued to expand even as the annual deficit was ineffectually restrained. The Covid years and Johnson's vague program for "levelling up" merely added to an already sizeable state on which Reeves is continuing to build.

For if the heightened volatility of voting patterns and the ever declining participation rates at elections mean anything, it is that democracy is getting steadily more fragile. Elected representatives and civil servants are no longer fully trusted to govern in the national interest. Cock-ups and incompetence by the increasingly unaccountable state and its agents are getting more egregious and expensive. Yet there is a deafening silence across the political spectrum about what constitutes the proper functions and limits of the state and how much that should reasonably cost. Reeves's budget will pass not because it should but because it can.

The reason why Charles I faced armed rebellion in 1642 was because the wealth creators, strivers and owners were faced by an ideological, wasteful, unaccountable and capricious state which claimed, through Divine Right, that it knew best.

Sound familiar?