No-one should have been too surprised, though, seeing as politicians openly tell us all how broke and financially incompetent they are on a regular basis. In fact, Ed Miliband has done exactly that today.
Ed Miliband has unveiled plans to deliver a "living wage" of at least £7.45 per hour for millions of people, if Labour wins the next election.
Whitehall contracts would only go to firms paying the living wage, while those who paid less could be "named and shamed", said the Labour leader.For a dedicated believer in the power of the state, it should be simple for Ed to just come out with a scheme whereby the government guarantees that level of income through, say, tax credits or threshold increases, shouldn't it?
Well, no. Because, you see, he knows all too well that the state wouldn't even dare contemplate any such thing. To coin a phrase "there is no money" with which Ed can be able to do that. So his bribe to the electorate - which, in the grubby tradition of politics, this is - involves bragging about how much of other people's money he will be spending instead, if elected.
The truth is that, in the past twenty years or more, government has created imaginary new taxes along with other more innovative ways of taking cash off of the public, all to continue spending on their pet schemes while still being in a position to offer bribes come election time. These bribes, in the past, were in the form of tax cuts (Conservative, generally) or benefit increases (Labour, generally). However, despite us now paying - amongst others - things like insurance premium tax and airport tax which didn't exist 30 years ago, along with eye-watering sin taxes, incrementally increased VAT, and other schemes such as locally-administered parking regulations to help councils with their finances, the state finds it almost impossible to fleece us directly for any more.
Well, they could, but politicians know that there is a certain level of spending as a percentage of GDP - and taxation to facilitate it - which renders political parties liable for electoral defeat, and that just wouldn't do for your average, self-serving politico.
We've been on or around that level for quite a few years now, which is why we've seen the bribes change from taxation-funded giveaways to the generous spending of funds generated by businesses. Think, for example, extensions to maternity pay entitlement, the creation of paternity pay as a concept, and the national minimum wage, which cost the state nothing (or very little) as the cost is borne by others.
Politicians can preen and bask in how caring and generous they are being to the public, but each time they come out with these bribes they may as well be declaring to the world exactly what Liam Byrne did. "We're broke, there is no money left, we're not going to reduce the size of government, so we're bribing you in another way".
With regard the living wage, much of the emphasis today has been on how it is just a voluntary thing; how "responsible" employers will be happy to pay it; how it is the right thing to do; and how it will 'boost morale'. However, we've seen those arguments for a long time now - the living wage is not a new idea, the foundation to promote it was set up over a decade ago. What has changed is Miliband's new, more sinister, tack of 'naming and shaming' companies which don't (or, more likely, can't) pay it, and demanding it be a requirement for any firm bidding on public sector contracts.
Y'see, despite the living wage apparently being a wonderful "idea whose time has come", according to David Cameron, even someone as big a fan as Miliband knows it will be disastrous for business and the economy right now, or he'd be promising to make it mandatory. So today we've just seen the first little baby steps of what will be a future requisition of private assets for political electioneering when things pick up (and the roof can again be left unfixed while the sun is shining).
A perfect example of how this will work can be seen in a history of statutory sick pay (SSP) - it is also an illustration of both the dwindling disposable income of the state in the past 30 years and the bribe mentality not being shy of encumbering private and public sector alike and, by extension, consumers and taxpayers who would suffer the passing on of costs.
Introduced in 1983, SSP guaranteed a certain level of sick pay for employees but it could be reclaimed 100% by businesses, therefore it was funded by the state out of tax receipts. In 1991, government found that they couldn't afford this so reduced the amount claimable to 80%. This 80% was later removed almost entirely in 1994 and, hey presto, benevolent government was treating employees without cost to any of their ever-expanding spending plans. They couldn't afford it any more, they were broke.
See? Liam Byrne wasn't the first, politicians have been telling us there's no money left for a long time, you just have to listen carefully. How honest of Ed to emphasise it yet again, eh?
