Cameron and Osborne should heed Alistair Darling’s advice
Posted on 28 April 2012 | 5:04pm
I don’t suppose the two arrogant unapologetic posh boys who don’t know the price of milk (copyright Nadine Dorries) would ever listen to Alistair Darling. But they could do worse.
Writing in the FT today, Labour’s last Chancellor sets out his ideas for how his successor George Osborne might get the economy going, including investment in major infrarstructure projects, and more quantitative easing.
Alistair, who was on good form when we spoke together at a Labour dinner in Edinburgh last weekend, has a fair amount of cred in this area, having been the first to signal just how had the global financial crisis was likely to be, and having made a pretty good fist of things when it came.
As he points out today, when the coalition government was formed, the economy was growing, in large part because of the stimulus put in place in 2008. The government, unlike so many others, went into reverse on the policies that were delivering the admittedly weak growth. They had a political strategy – blame Labour for the mess – which they used as cover for their economic strategy – cuts and austerity. The two combined in what Alistair rightly calls ‘mendacious claims to gain support for its determination to cut the structural deficit by the end of the Parliament.’ These included comparisons with Greece, and bogus claims about the country’s creditworthiness. ‘It undermined confidence, which has never really returned.’
There were many voices warning them that the political strategy was likely to have a detrimental impact on the economic strategy, in that the one had a negative impact on the confidence required to deliver the second. But the honeymoon was in full swing, they were getting the benefit of the doubt, they were loving being in office, and there was no legitimate worldview but their own.
The view was clear – they would slash the public sector to get the deficit under control, and the private sector would fill the jobs gap. It hasn’t happened. Nor is their deficit reduction over the course of a Parliament going to happen. They are borrowing 150 billion pounds more than planned. Unemployment among young people in particular is reaching crisis levels and they have neither the will nor the plan to do much about it. And now the double dip recession they said would never happen has come.
The crisis came on Labour’s watch. But thinking about how Gordon Brown and Alistair Darling handled that, and comparing it with how Nadine’s posh boys are doing, then I doubt I am alone in thinking the country would have felt more confident in Labour hands.