Some months ago, when the scale of Britain’s debt problem became clear, I suggested a cut of £150 billion from the UK’s mountainous £650bn annual public expenditure bill — Gordon Brown’s toxic gift to the nation.

A lot of people clicked through that this was impossible, unsustainable, and would worsen the gathering depression.

Now many commentators are talking openly about 20pc cuts across the board. That represents £130bn.

The successful Canadian model from 1994 is being touted around as if nothing less will do. It won’t. Brownianity, with its near-religious obsession for spending other people’s money, is a dead religion.

As Rachel Sylvester points out in today’s Times (London): “In 1994 Canada was running a deficit of 9.2 per cent of GDP, about the same as Britain’s today. It had tried ‘efficiency savings’, public sector wage freezes and departmental budget cuts with little success.”

Actually, we’re probably looking at a UK deficit closer to 14pc. In Canada, the number of State employees was cut by 23pc, while health and defence were protected.

Isn’t it strange that, despite Britain’s massive commitments to war in the East, defence spending continues to fall, and is earmarked for further reductions by Labour, Lib-Dems and Conservatives alike?

In Canada the deficit was eliminated in three years and the Government returned to power at the following election, despite the staggering shock to the system. Bearing in mind that little of this creative carnage was leaked to the electorate before the previous election, it must surely provide a model for the Tories here.

The Canadian connection throws up yet more eerie echoes in this extract from the American website: PoliticalBase.com, from December 4, 2008:

From Tuesday’s New York Times:

“The governor general of Canada announced on Tuesday that she would cut short a state visit to Europe and return here as a coalition of opposition parties sought to unseat the Conservative government.

“Governor General Michaelle Jean, who represents Queen Elizabeth II as the nation’s head of state, has the power to appoint a new government, dissolve Parliament and call for a new election or effectively allow the Conservatives to remain in control for up to a year.”

But what I find absolutely fascinating is how the Queen of England continues to have the power to shutdown the Canadian parliament. Seems that the British-Canadian connection goes beyond the symbolic tradition of the Queen on the colorful Canadian currency.

Oh that the fate of Brownianity could be discussed here with such practical openness, and the Queen’s intervention taken for granted, not whispered with trepidation behind closed Palace doors.

John Evans

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Here they are, the G20, a merry grouping of the world’s most powerful leaders, photographed in the wasteland of London’s depressing docks area. How did they do?

The dismal surroundings must have affected their collective judgement.

I’ve been writing here about protectionism for months, while others have dutifully mouthed the mantra: “free trade is good, protectionism is bad”.

Let’s start with some common sense: nothing is as good or as bad as it seems. Applied to the above: some free trade is good, some protectionism is bad. The reverse polarities are also true.

Walk down a street of terraced houses. Although they give the impression of a single, continuous building, they are in fact a series of individual ecosystems.

Each household has its own income, makes its own choices, decides its own way of life within the law, and is governed by its own head. The block is not a single organism in the way ants or bees live. Each property is a self-governing entity whose inhabitants may not even know most of their neighbours.

Generally, humans don’t behave like bacteria or, except at football matches, like flocks of starlings. The best of them are, above all, individuals. The best people like to be in charge of their own affairs and households.

Modern politicians, still suffering from WW2 hangovers, believe they have the right to behave like pushy neighbours and interfere in everyone else’s affairs. They don’t. It would be a better world if other people’s boundaries were respected by everyone else.

The G20 failed because it was fighting 20th-century battles. Some of those principles are worth learning, but many are out of date.

The great problem we face now is the growing divide between exporting, surplus States — China, Germany, Japan — and importing, debtor countries — the US, UK, and many of the rest.

The surpluses and deficits were very large even when the world’s economies were booming, but in a slump, they appear insurmountable.

Countries like China and Germany know they will never get their full value back. The debtor countries will simply inflate their economies — the real reason behind quantitative easing — and/or, like Britain, devalue their exchange rates to improve their international competitiveness and export themselves out of trouble. Import substitution will also push this along at the expense of the surplus exporters.

The effects of this sleight of hand dodge will be to increase tensions in the world, especially between surplus countries that lose out, and debtor States that clawback their deficits by retreating from the moral high ground. Bystander countries will draw the obvious conclusions and the world “trust index” will slump, creating ominous conditions for a new century than may turn out not very different from the last.

Back to the terraced houses, and we can see that many inhabitants are trying to improve their lot by “beggaring their neighbours”. The ecosystem where each household runs itself has collapsed in a welter of indebtedness between families, with some seeking to write off debts unfairly, and the most prudent suffering the most. Some kind of local civil war is inevitable.

The solution, clearly, is to return to individual household responsibility, not to increase the socialization of the terrace and cross indebtedness between houses.

Point One: The “progessive internationalist” approach to the world has broken down. Governments gave us this crisis, the G20 is offering more global governance.

While some countries have vast surpluses, most of it invested in dollar assets or euro bonds, their perceived prudence has now become their undoing.

Point Two: The recent high peaks of international trade were ransacking the world of resources at an unsustainable rate. Whether you believe in man-made global warming, or not, or partly, the rate at which the Earth itself was being consumed to provide shiploads of whimsical products for world consumption, has become the road to hell.

Point Three: The surplus countries created mountains of debt in the deficit countries, way beyond their annual incomes (GDP). This was clearly unsustainable. Sooner or later the bubble had to burst. It did.

The G20 has not solved the enormous problem of how to tackle the aftermath. Creating a “central bank for the world” — a beefed up IMF — with its own “global currency”, will prove as crass as previous decisions by this non-Sovereign body. The G20 has also voted for a ballooning increase in international indebtedness, with unaccountable bureaucrats overruling individual democratic nations.

It has forgotten the important lesson of the 20th century: the “great and the good” on their pinnacles of vanity don’t make better choices than the “small and the mean” at ground level.

The lesson of the early 21st century is that Nation States, which balance their books and their trade accounts, both surpluses and deficits, are vital to a stable and war-free world. Only nations can be approximations of single “organisms” … the world can’t, especially at the current level of individual human development and the great disparities between them.

The surplus nations have the biggest lessons to learn, since they will be at the receiving end of the slump. China kept its currency too cheap too long, hollowing out much of the West’s manufacturing industry. It is now reaping the whirlwind.

Germany over-specialized in sophisticated metal-bashing and is suffering a grievous loss of income as the willingness of others to buy collapses.

For us at the debtor end of the spectrum, our mistakes were general, across government, corporates and individuals. We signed up freely to a psychological contagion, promising endless wealth, and got ourselves deep in debt as a result. British authorities are allowing the exchange rate to fall and pushing up inflation by “unconventional means” so that our debts are reduced. It may well come back to bite us, but so far so murky.

The heart of the problem is not being tackled at all, except through vacuous soundbites.

The verdict on the G20 then, with its irrelevant headline decisions on tax havens, more debt, and the vapourware trillion dollar infusion “to save the world” is negative. It will do no such thing.

It will probably make it worse.

John Evans

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Liberal-Democrat leader Nick Clegg’s new overgrown-schoolboy hairdo is much too Red Nose Day for inclusion in a serious political website — so I’m writing about it here.

When William Hague first adopted his Mekon cut, I remember thinking he must have lost his marbles along with his tresses. Do you recall his Neanderthal mane at 16? But, over the years, his egghead look has grown on us. At least it allows him to age gracefully.

By contrast, as Cleggie gets older, his haircut will become younger and younger. A bit like the picture of Dorian Gray.

I bet this dyed, bristly, birdsnest soupcon is redesigned before very much longer.

As a natural-born conservative, I’ve always been attracted to Edmund Burke’s idea of the “natural society” — one in which people find their own social levels according to ability and inclination, and are able to speak out freely as they wish.

It seems obvious to me that such an arrangement results in a generally contented population, and therefore a peaceable one.

The Labour government (1997-2009) has destroyed that homely consensus. Early on, it introduced a rigid system of Marxist equality legislation that imported alien doctrines and rigidities into Britain. All manner of inoffensive folk were inexplicably demonized, and often criminalized, for views and actions that would not have been remarked upon during centuries past.

Ideological correctness was the order constantly barked from above. An Orwellian State sprouted up where once civility and civilization stood. Society as a whole became disorganized and sullen, with serious outbreaks of violence on the streets, especially among the young of all classes. Alcoholism is now commonplace, as are hard drug habits, knife and gun crime.

All this recent misery and disorder can be traced back to obsessive social engineering by government ministers we wouldn’t trust to assemble a flat-pack whelk stall.

How we have lost our natural society, and what we can do to retrieve it, is a big topic for another day. For now, let’s speculate on what the founders of psychoanalysis, Freud, Jung and Adler, would have made of New Labour Britain — in my own, surmised, words:

“Equality is a dangerous matter for politicians to touch. They have no idea what complex areas of the mind they are meddling with. Equality before God, the law and the ballot box is as far as a democratic society should go. Any further and it risks wholesale disturbance across the population.

“If people are forced to bottle up their natural instincts and inclinations, with no outlets of expression, they develop severe anxiety neuroses and tensions that will increasing boil over into social disorder. People who are discontented most of the time inevitably reach for the bottle and the needle to calm their inner turmoil.

“Enforcing equality of attributes is a minefield best left alone. It is also self-defeating because attributes are, by their very nature, unequally distributed across the human population. Every parent observes that fact in the personalities of their children, which are anything but equal, despite sharing a genetic makeup.

“Nothing, save losing a war on homeground, is as explosively destructive of civilized values than enforced equality of attributes. Karl Marx, like all socialists, never understood human nature. Look where that got him — he nearly destroyed the world.”

Something else for David Cameron’s Conservatives to get rid of then?

Have you tried Sainsbury’s sugar-free dark chocolate? I’m chewing on a lump now and it’s surprisingly good. In fact it tastes just like normal chocolate.

It’s supposed to be beneficial to the old ticker too. Something to do with antioxidants and all that.

Predictably, the killjoys were out in force this week rubbishing claims that the dark brown stuff is good for you. You’ll get fat, they shriek. Obesity is a fate worse than death. Stop before it’s too late!

It’s enough to give you a heart attack, isn’t it?

Why do the current crop of British politicians copy everyone else?

Whenever a new policy is suggested, the accompanying spin alerts us to the supposedly comforting fact that it’s been developed and tried out by Sweden/Australia/America … and other generous countries around the world.

Has the UK lost its ability to create policy ideas pertinent to its history and the specific aspirations of its people?

Let’s be frank, the Labour party is an ideas-free zone, it can no more identify the wider needs of Britons than it can manage the economy for any decent length of time.

Under its diktat, almost every part of the country has been reduced to pathetic shards of failure and dereliction. Observe Labour’s strongholds in Glasgow, where constant Labour local government has bequeathed the inhabitants a life-expectancy lower than sub-Saharan Africa.

Make no mistake, the task of the upcoming Tory Government will be like the Labours of Hercules.

As we gear up for a possible June election, all the old arguments about that hallowed stretch of real estate, the centre ground, are bubbling up again.

This sacred turf is said to be the only place from which a party can win a General Election. Both centre-left and centre-right positions deter a crucial constituency — Middle Britain.

Given that Gordon Brown has boxed himself in electorally by a strange combination of anger and timidity — classic traits of the bully — a June 2009 poll is overwhelmingly his least worst choice. Even Peter Mandelson apparently accepts that view. We must assume it’s a strong possibility.

Will Brown try to regain the centre ground for Labour from the artful Conservatives? And should the Tories attempt to defend it by circling the wagons?

My own view is that the so-called centre ground is a myth. Margaret Thatcher won three elections in a row. Her radical thinking became the norm, the consensual heart of British political discourse. Yet most voters saw her as distinctly right wing. How can that be explained?

What she occupied was not the boring old centre, but the High Centre Ground, that pinnacle from which the entire terrain is visible. As the old song has it: “On a clear day, you can see forever”.

This week, David Cameron’s apology for failing to spot the flaws in the runaway economy plonked him squarely in the High Centre of British politics.

You had your chance, Gordon. You blew it!

Again.

For months I’ve been putting up pieces in Syntagma exploring new policy initiatives for an incoming Conservative Government. (Note the capital G in the spelling; Labour always gets a derisory lower-case for its dismal performance.)

However, these snippets are distributed around the site unmarked and less coherently than they should be. So we’ve decided to start a new weekly feature column: Pointers to a Conservative Government on Tuesdays, in the run up to Dave’s misty-eyed entry into 10 Downing Street.

It will be a new dawn, will it not?

It will also be the beginning of a Trojan effort by the Party to rebuild a truly blasted heath of a country. It will take at least three Parliaments to achieve.

We’ve already covered education, manufacturing, public borrowing and public sector govenance, along with globalization and parts of foreign policy (see yesterday’s Saturday Ramble), but will now put them all under one roof for convenience.

I hope the views of a Burkean Democrat Minimalist Conservative (BDMC — a new species) may prompt an echoing response from within the Party’s leadership.

They will need all the help they can get.

John Evans

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The runaway inconsistencies of the Labour government’s handling of the economic crisis in Britain are truly terrifying.

Last week, they began printing money to buy back debt they themselves have issued, a process I described as like a snake eating its own tail.

Technically, this is considered a triumph of good judgement in the circumstances. Logically, it’s voodoo without a witch doctor.

Now, having added Lloyds HBoS to its list of (virtually) wholly owned banks, they are offering hugely expensive insurance policies against these bank’s toxic assets. As John Redwood writes in his blog today: “I asked what was the point of taxpayers ‘insuring themselves’ in RBS and Lloyds.”

The contradictions involved in eating one’s tail and insuring oneself against loss with one’s own resources are derangement-inducing. We could all go mad just thinking about them.

We’re told that economics is a funny business. Things are not always what they seem. The bad guys are often the goodies in disguise, and the reverse is also true. If you’re not a member of the Initiati, you must take it on trust. You have to see it in the round.

But when the snake gets to its stomach, what then? And if taxpayers have to pay out on dodgy loans — as much as £50 billion, some say — does that money go round in circles and end up back in taxpayers’ pockets?

Like hell it does! It will more than likely find its way into the bonus packages of jubilant bankers, or back in the Treasury where they will find some excuse for spending it on social programmes that fritter it away. That’s suspiciously handy with major elections in the offing.

This is high deception and makes a mockery of the idea that “our government” is actually on our side.

Many have also noted that these trillion pound operations have been undertaken without proper Parliamentary approval or scrutiny. Perfunctory best describes their response to curious MPs, like John Redwood.

In the handling of this crisis, as in other areas, they have become the enemy within.

John Evans

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I’m not a practising economist, but I did read an economics course at university, along with psychology. Because of it, I’m probably slightly better equipped to understand what’s going on now than the average Jo(e).

The word “slightly” is important here because it means just what it says.

The difference between books on standard economics and what goes on at the windows in Central Banks is enormous, especially as the “windows” aren’t windows at all.

When you also take into account modern investment banks — what we used to call merchant banks when we British were British and not Americans — the difference becomes profounder still.

The business of moving money around has become so arcane and global that hardly anyone understands it now, not even bankers, and especially not politicians. This means we can either attempt to follow the bizarre mathematical models of Harvard MBAs and, if tales are to be believed, rocket scientists from NASA, or we fall back on practical psychology to make sense of it. That’s what I do.

This leads directly both to my successes in forecasting and my failures. Looking back I detect, from a low base of hands-on experience, that I’ve done about as well as the average expert commentator, and occasionally much better — Anatole Kaletsky leaps to mind.

How much will you pay for my method? Here it is free of charge:

Do not trust Gordon Brown to get anything right from the medium short-term going forward.

That is my Golden Rule. It produces tier upon tier of successful forecasting.

Distrust any proposal that would lower the democratic input into policy.

It’s not that democratic decisionmaking is necessarily superior to any other, just that non-democratic forces are often catastrophically wrong, and usually pernicious in their effects.

The more global they are, the less competent they become. This accords with the principles of Superdemocracy.

Beware those who persistently use the word “global”.

These strange beings fantasise themselves as rulers of the world. I’m convinced Gordon Brown dreams of those old Soviet posters of Lenin being carried into Moscow beneath a huge red flag. Archetypes of the Great Leader are never to be trusted or encouraged.

Does anyone know if Brown has Photoshop on his computer?

Stick with minimum, obvious solutions in economics.

Confronting someone in a car accident, with blood pouring from an artery, you wouldn’t offer them an iron tablet. Neither would you send for an aromatherapist, however fashionable. The poor chap needs the medical equivalent of Joe the Plumber to deal with a major overflow problem. Monetarists are financial plumbers, the emergency services.

Keynesians, and others who prefer not to bear any label, are the naturopaths of economics. They should only enter the arena to deal with delicate matters like balancing supply and demand and use deficit financing sparingly over a cycle. A scented candle here, a relaxing massage there.

Used sensitively, as they should, these arms of political economy can be made to produce a “cocktail of measures”, as Kenneth Clarke described it from the stage of the Ken and Eddie Show — an entertainment that is, alas, no longer with us.

Treat anything emanating from Brussels as you would a red-hot brick.

This is built on decades of experience and is not disputed by anyone who can see further than the end of their street. Unfortunately, that does not include most politicians.

Services run by the public sector cost twice as much in the end as private provision.

The old saying that a pound in your pocket loses half its value when it lands in the government’s bank account, probably underestimates the losses in Labour’s public sector. Many of these costs are disguised as something else, or appear off balance sheet.

View all opinions from international regulatory bodies as suspect.

This is the Holy Grail for us Democratic Minimalists. International and supranational sherpas are rootless individuals holding no philosophy other than seizing the agendas of national and local democratic forces, whom they regard as village idiots. Always stick with the idiots — at least you can understand them, and whip them when they’re wrong.

So there you have it. My methodology. If in future I get anything wrong, you will at least know I have the best of intentions and no ambitions to rule the world.

Are you listening, Gordon?

John Evans

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