By now you’ll know that twenty esteemed economists wrote a letter to the Sunday Times yesterday, calling on the government to start the tricky business of cutting the budget deficit earlier than some have advocated. You may be wondering why they didn’t instead write to the Chancellor-of-the-exchequer, since News International’s power over the government’s budget is minimal? Well, today The Obscurer can exclusively reveal that the eminent score indeed did contact HM Treasury direct, emailing the contents of their letter on Saturday evening. Furthermore, and inexplicably, The Obscurer was copied into the Treasury’s reply! So here, exclusively, is the government’s considered response to that Sunday Times bombshell.
cc: The Obscurer
re: UK economy cries out for credible rescue plan
Thank you for your latest letter concerning how to deal with the UK budget deficit. As many of you will know this is indeed a priority for the Treasury at the moment, and we are taking a large number of soundings and looking at all the options available to us regarding exactly how and when we should deal with the current situation, and we do indeed value your input. Thank you for spending the time on coming up with your own considered solutions.
Sadly, you appear to have omitted the attachment in which you detail how exactly you would go about cutting the structural deficit in the timeline you propose, and all we have received is the covering preamble which, while of interest, merely makes some bland and somewhat meaningless pronouncements. Still, they do whet the appetite for the meaty specifics to follow and we eagerly anticipate seeing your full proposals, so please forward them with some haste.
In particular, we note that you say that
- “In the absence of a credible plan, there is a risk that a loss of confidence in the UK’s economic policy framework will contribute to higher long-term interest rates and/or currency instability, which could undermine the recovery.” We agree, but admit that we are having some difficulty in drawing together our various strands of thought into one credible plan. As such we are excited to learn that you must have completed your own plan on how to deal with this matter. We look forward to receiving it so we can see how it moves us forward.
- “The exact timing of measures should be sensitive to developments in the economy … and there is a compelling case, all else being equal, for the first measures beginning to take effect in the 2010-11 fiscal year.” We are, however, (and also ceterus parabus!), struggling to pin down that exact time, as we are uncertain when the economy will have recovered sufficiently. You appear to have less uncertainly than ourselves and so we would welcome you own precise proposals regarding timing (something that, being a small detail, we are surprised you omitted from the email we received, but which we look forward to seeing once we have your complete correspondence in front of us).
- “The bulk of this fiscal consolidation should be borne by reductions in government spending, but that process should be mindful of its impact on society’s more vulnerable groups.” Aye, there’s the rub. The problem here is that while it is a commonly held view that the public sector is stuffed full of non-workers fulfilling non-jobs, according to a recent report by Reform – a think-tank you would expect to be sympathetic to that view of the public sector – any cuts to the government’s workforce would soon “hit bone” and affect frontline services. Cuts will have to be made and we are working on them right now, but we have found that it is far easier to propose cuts in government spending than it is to define where these cuts will be made; therefore it is gratifying that you have done the heavy lifting here and we look forward to your own specific plans on which departments to close and who should be made redundant.
Everyone here at HM Treasury is tremendously excited that you must have already managed to produce just the credible plan that you require of us, and which is currently eluding us; we are only disappointed by the regrettable delay that has been caused in your oversight in not including this plan in your email. However, we are sure that this can be speedily remedied, and together we can crack on with the vital work of restoring the nation’s finances to balance.
Yours faithfully etc.
That was two days ago, and sadly I have not been copied into the economists’ reply. I can only assume that someone noticed the error, and when forwarding their detailed plan for economic recovery they also ensured that I was removed from the cc. field. Well, I assume that is the case, and I assume that these foremost economists have produced and forwarded on their own detailed plan. Haven’t they? That can’t be it, surely? I can’t imagine that such an illustrious band of experts-in-their-field would make such a wishy-washy list of statements and requests from others without something of their own to back it up, would they? Why, because if they would then that would make their letter to the Sunday Times appear to be just an empty gesture, a substance-free waste of time? It would suggest that writing the letter was a mere vanity-stunt and a exercise in self-importance, with about as much value as some bloke on Grumpy Old Men – Richard Madeley, say – sounding off about something he doesn’t really understand and which he has no solution for?
No. That can’t be it at all.