Ben Lowry: The budget reflected a ‘big spending’ culture that we share in Northern Ireland

It was a minor rally, with sterling rising to $1.12 and €1.14. Anyone fortunate enough to hold a large sum of dollars will be wishing they had sold them earlier in the week at $1.04 and €1.09 respectively.

Despite the slight recovery, I still think the budget was atrocious, and it reflected a buy-now-pay-later attitude to debt — not just in Britain but in the western world.

In Northern Ireland we too reject notions such as prudence and caution. In fact we are among the worst — furiously demanding more funding for the province, ungrateful for the largesse NI already gets and refusing ever to trim public spending or make it more efficient, and so last longer.

Think of health. For 20 years expert reports have called for NI to have a smaller number of world class hospitals, with better outcomes (ie lower death rates) yet still Stormont is too afraid to implement reform in case it is accused of closing NHS units. This cowardice is a significant reason why we have such long waiting lists.

If long-overdue reform of that or any other part of the public sector is mooted in Northern Ireland, a cross-party cry of ‘Tory cuts’ will go out.

I remember after the 2010 general election Martin McGuinness saying that the newly elected Conservative government would inflict “huge pain” on Northern Ireland. a contemptible statement from a man who led the long IRA terrorist campaign, to which the UK responded with security restraint as well as lavish financial generosity, pumping money into NI to help maintain stability and prosperity.

I wonder what Peter Robinson, standing beside him thought. He did not show discomfort, but it is hardly easy in a mandatory coalition to stand wincing when your ministerial deputy, who has equal powers, speaks out on a matter. But even if the then DUP leader disagreed fiercely with Mr McGuinness’s comments, unionists are as demanding of ever more Treasury cash as the other Stormont parties.

There is little sense that such an approach might cause resentment in England, where they do not get free prescriptions or similarly low university tuition fees, and weaken support for NI in the richest UK home nation without whose support we would be in turmoil.

In any event, when someone hits out at ‘Tory cuts’ ask: what cuts? Neither the left nor right of the political spectrum seem to care about living within your means.

The US Presidents George W Bush and Donald Trump spent big.

In the UK, the Tory governments of David Cameron and Theresa May rightly presided over fiscal restraint, but even they only reduced the UK deficit, not the debt (in other words, they cut the rate at which the debt was increasing, rather than the debt itself).

Boris Johnson, he who said he was pro having cake and pro eating it, cared more about popularity than prudence, but was constrained in his spending ambition by Rishi Sunak, the chancellor.

None of these administrations would, for example, properly reform public sector pensions. If the man in the street, who even in NI is likely to be in private employment, knew the extent to which his taxes prop up these inflation-linked state pensions, there would be social disorder (I will write again about the poverty pensions that the private sector faces, but does not realise, because pensions are complex).

Advocates of Mr Kwarteng’s budget say that it would have generated growth and so the shortfall between taxes and revenue (caused by his combination of tax cuts and untouched public spending) would have been offset by increasing UK wealth. But if it was this simple would it not have been tried before?

Even if the impact of his reforms and tax cuts are as positive as hoped, it will take years to be so. It is obviously risky to have a widening gap in public finances in the meantime, particularly in light of our massive Covid debts — and at a time of alarming inflation rates.

Until recently it was Tory orthodoxy to believe (as I do) that low taxes can only be achieved by having as lean a state as is compatible with a compassionate, civilised nation. Now it is heresy if you do not accept that tax cuts are of themselves a good thing, heedless of cost.

I will be at the Conservative Party conference next week. It has always had talented politicians but is increasingly prone to ideological fervour. In Covid, the sensible position of scepticism about lockdowns, and whether they cause more harm than good, morphed among many Tory activists into anti-science and near superstitious opposition to vaccines, which were the most obvious route out of lockdown.

Also with Brexit. The sensible position of euroscepticism, up to and including an exit from the EU (a position I backed in 2013, before there was a term Brexit, until I began to worry about how it would affect the Union) morphed into such a purist approach to leaving the single market that many Tories prioritise it over the integrity of the UK.

The cavalier attitude to debt, however, is seen around the west. Consider the trend of people replacing perfectly good cars with heavily financed new ones.

Meanwhile, I have been dismayed to see house prices surge in UK, Ireland and US after lockdown. All of it sustained by ultra low interest rates, that seem to be kept down almost in a conspiracy between governments and central banks to keep such asset prices buoyant.

Northern Ireland, like the Republic, had one of the worst house price booms and busts in economic history, and yet in its aftermath I recall next to no reflection on its causes and consequences.

All sky high prices do is enrich existing owners and impoverish the young as they try to get on the ladder, leaving them susceptible to ruin if – as now — rates suddenly rise.

• Ben Lowry (@BenLowry2) is News Letter editor