黑洞社区

Happy New Year. Let us hope that on the economic front it is a great deal better than 2011!

Last year concluded with the controversial so-called 鈥渧eto鈥� by David Cameron and the not unfamiliar cry of 鈥渋solation鈥� for the UK. The veto, of course, was on the ability of the other 26 EU countries to be able to use the existing structures and EU Commission for what essentially would be a parallel fiscal and monetary union. Oh God, I can hear you say, we鈥檙e not going into all that, are we!

锘縋aradoxically, David Cameron鈥檚 use of the 鈥榲eto鈥� could allow us the choice, if we so wanted, of adopting Keynesian principles and not just rigid monetarism

Well, let me try some more unusual thoughts about where we are, and where we might be in the future.

First, the good news. While the prime minister might have thought that he was fighting the battle on behalf of the City of London and the single market, it had another effect. It potentially allows the UK not to be drawn into a financial straitjacket so great that fiscal rectitude gradually strangles any kind of common-sense flexibility. Paradoxically, this could allow us the choice, if we so wanted, of adopting Keynesian principles and not just rigid monetarism. I don鈥檛 imagine for a moment that this was uppermost in David Cameron鈥檚 mind, but for investment in construction, it might just have some real salience in the world of tomorrow.

But another thought. We鈥檙e moving towards technocracies. Greece has a prime minister that is unelected by anyone. Italy has a whole cabinet full of technocrats who are not only unelected but unaccountable. Now it would appear that the technocrats have taken over - or are about to do so - a substantial part of the EU. This of course fits entirely with the agenda of the German chancellor, Angela Merkel, who is to all intents and purposes a technocrat, but with one difference: she can appeal to the German voters鈥� fears of history repeating itself.

But for everyone else - while not wishing to exaggerate - there is a very real danger that the will of the people, and for that matter the voice of business, will be relegated to nothing more than a distant cry. And if representative democracy is not up to the job, and technocrats and new treaties build rigidity, what will be the reaction?

My fear is that the less control people believe their politicians have, the more disillusioned they become. In Britain there has been something of a history of acquiescence rather than radical upheaval. But of course, not so elsewhere.

That brings us back to whether Britain can 鈥済o it alone鈥�. For even if self-imposed deep-seated austerity suits the markets and hence does not threaten political democracy here, any extreme reaction across the continent would have huge consequences for our economic and political well-being.

As we see at the moment in the UK, people who are fearful, who feel insecure and have no certainty of the future, tend to hold on to their money. In the UK, economic activity is undoubtedly lower because the whole atmosphere around us is one that is predicated on spending less and therefore purchasing less. Christmas, of course, is an annual exception but the first three months of this new year will surely display, both in the public and private sectors, the consequences of uncertainty and instability.

锘縄n Britain there has been a history of acquiescence rather than radical upheaval. But of course, not so elsewhere

Builders do not build houses if people are not prepared to purchase them. People who would move to upgrade to bigger properties stay where they are as they feel that uncertainty and, of course, find that financial institutions are reluctant to lend.

New (not to be called PFI) infrastructure funding from pension funds is a vague aspiration for years to come. Not a bad idea, it has to be said, but no flesh has yet been put on the bones. And there again, pension fund trustees have an obligation to gain the maximum return for those whose money they hold in trust. The less likely the return (because of the lower economic activity), the less justification they have to comply with George Osborne鈥檚 little wheeze.

The cry to 鈥渢ake politics鈥� out of this, that and the other is deeply delusional. It presumes that the technocrats know best, and that people being accountable to markets is a desirable state of affairs.

My plea therefore is to get things back into balance: the role of democracy versus global markets; the necessity of retrenchment versus the imperative of bringing back hope and confidence.

That is why, paradoxically, Cameron might at least be given credit for allowing some of us who disagree with his politics profoundly to make a case for having some control over our destiny for years to come.

David Blunkett is MP for Sheffield Brightside and Hillsborough, and a former home secretary