It now seems obvious why Labour relentlessly increased the size of government and the public sector, increasing it from 44% of GDP to 54% when they left office. Those working for government clearly lean to the left, while the private sector have a completely different view of the world (and I would argue more a realistic one).
The UK people are extremely divided according to a recent Populus poll:
Public sector: Labour 27% ahead & economic optimism at -42%.
Private sector: Tories 15% ahead & economic opitimism +4%.
This is quite disturbing on a number of levels, not least because people in the public sector equate government spending to economic prosperity and are therefore extremely negative given the coalition’s cuts. The sad fact is, a huge portion of the UK people simply do not understand that we NEED private business to generate wealth for the economy, which can then be redistributed by government. Borrowing money from foreign countries to fund our public sector is a one-way ticket to bankruptcy. Others say tax the evil bankers and entrepreneurs more to lower the deficit … which would make the UK even less competitive and discourage many from bothering to risk starting their own company or to invest in one.
My feeling is that the coalition’s commitment to lower corporation tax each year, alongside their cuts in government spending, will significantly boost confidence and attract more investment to the UK. Indeed just minutes ago the S&P revised the UK’s credit rating up to ‘stable’ from ‘negative’ and reaffirmed its AAA rating.