Belmont Club

Where's the money coming from?

The Times Online describes “Soviet Britain” — those parts of the British Isles where the State is primary employer. If the scene described below bears a striking resemblance to the outcomes that are promised, is the likeness entirely coincidental?

Parts of the United Kingdom have become so heavily dependent on government spending that the private sector is generating less than a third of the regional economy, a new analysis has found.

The study of “Soviet Britain” has found the government’s share of output and expenditure has now surged to more than 60% in some areas of England and over 70% elsewhere.

Experts believe the recession will tighten the state’s grip still further as benefit handouts soar and Labour directs public sector organisations to create jobs to soak up unemployment.

Across the whole of the UK, 49% of the economy will consist of state spending, while in Wales, the figure will be 71.6% – up from 59% in 2004-5. Nowhere in mainland Britain, however, comes close to Northern Ireland, where the state is responsible for 77.6% of spending, despite the supposed resurgence of the economy after the end of the Troubles.

Even in southern England, the government’s share of spending is growing relentlessly. In the southeast, it has gone up from 33% to 36% of the economy in four years.

The state now looms far larger in many parts of Britain than it did in former Soviet satellite states such as Hungary and Slovakia as they emerged from communism in the 1990s, when state spending accounted for about 60% of their economies. …

However, Vince Cable, the Liberal Democrat Treasury spokesman, said that the state’s grip on the regions was likely to soften the impact of recession there. … “In the long term we need to do something about it. This does suggest the crowding-out phenomenon of the private sector and it also suggests there is a lack of entrepreneurial activity.”

I am nominating Cable’s observation that this unfortunate situation may suggest “a lack of entrepreneurial activity” as one of the classic quotes of the new century, a phrase that, to use a cliche, “says it all”. It’s a grand performance by the Labour government, but what will they do for an encore? What happens when the government runs out of other people’s money to spend?

That’s apparently not a concern in South Africa, where the the Times Online says the ANC has “veered to Left” and is now mandating a series of entitlements that will cripple South African business.

South Africa’s ruling African National Congress (ANC) has veered sharply to the left and will go into elections, expected to be held in April, with a manifesto largely dictated by the country’s Communist party, according to senior party officials.

Under Jacob Zuma, its new leader, it has quietly adopted a radical platform of social policies which the business community claim are unaffordable.

The ANC already promises a free allowance of water and electricity to all and has introduced the largest welfare state ever seen in a developing country, with more than 40% of the population in receipt of state handouts.

Under the influence of its firebrand new secretary-general, Gwede Mantashe, a former leader of the mine-workers’ union and chairman of the South African Communist party, it is adopting policies and rhetoric based on left-wing states such as Cuba and Venezuela.

Here’s my fearless forecast. Inside of five years the economy of South Africa will resemble that of Zimbabwe. Where will it end? Who will save us from those who would save us?