High public spending: Brown’s ‘scorched-earth policy’?
In a scary but thoughtful article Spectator political editor Fraser Nelson suggests Gordon Brown, having lost his legacy as a prudent chancellor will spend, spend, spend and leave David Cameron with the bill. ‘Unencumbered by the need to win an election, Mr Brown can spend the next two long years focusing on his legacy – health spending, education spending and international aid at the highest levels in British history and, best of all, much of it slapped on a credit-card bill that will be posted to a Conservative government’.
Ultimately the bond market is the only check on a profligate government between elections. It works as a check by jacking up the rates at which it is prepared to lend new money, even if it imposes losses on current debt. Nelson believes Brown knows this and will try to get round it be relying on private finance initiatives, where the bill takes the form of excessive equity-type contract payments rather than debt interest. Who will discipline this sort of ‘stealth profligacy’?