Graphs at a glance: Government spending on education, health and other services are being cut to pre-1948 levels

A train is dangerous if you run into its path or you refuse to get out of its way. Otherwise trains are perfectly useful and amiable. Rather like our amiable chancellor, George Osborne, into whose path the country placed itself when fleeing from the previous Labour government. George Osborne whose boyish smile eloquently smirks “How come they haven’t found me out yet?”

A graph from the Office of Budget Responsibility (OBR), a body created by the government in 2010 to provide independent economic forecasts, shines a light into a dark corner of Osborne’s mind. This graph shows Osborne’s current economic strategy will bring government consumption to the smallest share of GDP since before 1948. 

Office of Budget Responsibility "Economic and Fiscal Outlook December 2013"

“Government Consumption” includes money spent buying goods and services. It does not include transfers of money from one group of people (taken in taxes) to another (e.g. paid in benefits and pensions). Government Consumption includes paying for public services such as health, education, transport, justice, defence and the like.

Money is raised from a population in two ways:

a)      Take money away from people (in the form of income tax; VAT; & other taxes)

b)      Don’t give money to people in the first place (low pay lowers costs and boosts profits)

The income of 90% of Britons has stagnated for decades, through Labour and Tory governments alike. Plenty of money has been taken from the 90% in withheld pay.

Paris School of Economics http://g-mond.parisschoolofeconomics.eu/topincomes/

The vast contribution to the nation’s finances by the under-paid is hardly ever mentioned. Paying nurses, cleaners, shop assistants and social workers what they are actually worth in cash would cost businesses and government a fortune. Government consumption pays the 90% of Britons in kind by providing education, health, justice etc. It is the cheaper alternative to paying them enough to buy their health and education privately.

These cuts have nothing to do with 'benefits' - which are not part of "Government Consumption" spending. Osborne’s radical cuts are about taking away from ordinary Britons the public services they themselves already pay for by accepting poor wages and conditions. And it is not just the public services that are snatched away. These cuts also take away public sector jobs as numbers in the police, army, hospitals etc are reduced. And take away private sector jobs as the government cuts back on investing in infrastructure.

The reality in Britain: it is not the rich who subsidise the poor with what they give. It is the poor who subsidise the rich with what they do not take.

With Government Consumption falling to pre-1948 levels the Tory led government is simply keeping the national balloon afloat by throwing people out of the basket. A basket these same falling people paid for.

8/12/13 Update: One of our readers has postulated the graph showing Government Consumption above is a 'lie'. We agree that it seems unbelievable. However the graph is a straight cut&paste from a government sponsored report. Click >>here<< and go to page 75 of the report (page 80 of the Adobe document). While we too hope it never happens, it shows what the coalition government intends.

A prime minister once said: "I see only one road, however difficult it may be and whatever further consideration it may require as one progresses from step to step, and that is the policy of separate areas."

That prime minister was Dr. Hendrik Verwoerd speaking in 1961 as he introduced apartheid in South Africa. Cuts to public services will increasingly mean if you can't afford to buy your own education, medical care, legal representation then you can't have it. Britain is in danger of heading for economic apartheid.