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IMF report another step towards the end of this unelected one-term Tory government

Posted on 20 July 2012 | 5:07am

TweedleGeorge and TweedleDanny were out the other day, dressed in G4S style security jackets, announcing a bit of infrastructure spending. TweedleDanny appeared to have lost the power of speech, but he had retained the power of head movement and was nodding earnestly as TweedleGeorge explained how the difficult decisions taken by the coalition had made this extra spending possible.

But no doubt, as they awake to headlines spelling out the story of the IMF’s searing analysis of the government’s economic strategy, in their minds all this bad stuff was down to ‘the mess we inherited’, whereas a few rail projects were only made possible because of the ‘difficult decisions we took.’

The reason the IMF report is so devastating for Mr Osborne and David Cameron is because of the explicit nature of the link in its analysis with the specific policies this government has pursued. Whenever the IMF has peeped a word in support of their strategy, Dave and George have sung it from Number 10 and Number 11 rooftops. So what do they say now that as a result of their sticking to their failing Plan A, Britain risks years of recession and a permanent loss to productive capacity?

Being a couple of ‘arrogant posh boys who don’t know the price of milk’ (Arise Dame Nadine Dorries) they will curl the lip, sneer up the eye, and ask each other who the hell the IMF think they are … then go on with Plan A even though its centrepiece objective – sort the deficit over the lifetime of a Parliament -is bust.

Previous IMF reports warned of the possible dangers of a combination of huge public spending cuts and a lack of major infrastructure projects, and they ignored those too, picking on  the paragraph or two that said they were doing some things which were right, just as last night the Treasury was trying to get people to focus on the section on the eurozone.

Meanwhile another big objective -‘we will be the greenest government ever’ – is further eroded by news that Osborne is blocking plans for subsidies to boost renewable energy sources. This is a government whose actions can generally be predicted by looking at what they said in Opposition, and working out the opposite.

Meanwhile in so far as there has been any good economic news this week, it was the better than expected unemployment figures, which were attributed to the extra work provided by the Olympics. So let’s add that to the New Labour legacy list, shall we? Oh no, of course, I forgot, good news is their birthright, any bad news is all Labour’s fault.

There are three important points Labour now needs to make with real force and conviction, so that the lies at the heart of the Tories’ politico-economic strategy can be exposed and turned back on them once and for all.

1. More than a decade of growth and rising prosperity under Blair and Brown was a testament to Labour’s better management of the economy.

2. The Labour government’s handling of the Global Financial Crisis helped rescue Britain and the world from an even worse depression. And had they listened to Cameron and Osborne’s advice from Opposition, we would have been sunk.

3. The economy was beginning to recover when power changed hands, and the current mess is in large part the direct consequence of the Cameron-Osborne strategy.

That’s it. Win that argument, and then have clear and credible policies for the future, as we did for the past, and this can be the one-term never-been-elected Tory government it deserves to be.

  • Anonymous

    Quite strange them going on that we should be thankful for this investment, when it should have been going on anyway – that’s what governments do, no matter what is going on in the economy. Very peculiar.

    And I see a few strikes are planned in and around the Olympics – they will be happy with that, in order to mud sling at Labour and the Unions. Heathrow will burst at it’s seams soon – it will look like an old eastern block bread shop, miles of queues.

    And I have started buying my dairy products from the local corner shop. I find it is much better quality, even if about 25% more expensive. And it says on the pack they are from cows that actually graze and feed on green grass in the open, rather than indoor ones in these hugs industrial milk producing barns. More vit A and chlorophyll in fresh green grass fed cows, much healthier.

    And Bank of Dave was interesting last night, but I am sure Dave would have got done in The City for his number plates if the cameras weren’t there, I have no doubt of that. Anyway, quite cheeky of him, BANK1 indeed, held on by blu-tack.

  • Anonymous

    … furthermore, was Dave trying to dodge paying congestion charge with his number plates with those camera plate recognition dodahs everywhere, like what those diplomats dodge paying?

  • David Blake

    I wish I agreed. I think the danger for Labour is that this might be the trigger for a change in policy.
    Your three points are obviously important. But they won’t matter if the coalition changes policy and gets growth going again.
    There is one interesting point which too many people ignore. This is that Treasury officials have been at least as committed to austerity as Osborne has. Those officials are quitelikely to be influenced by IMF criticism. So I wouldn’t rule out a switch in policy. As Tony Hilton said in his very good piece in the Standard, there are an awful lot of people who realise that Plan A has failed

  • Iain Diamond

    I think Labour should focus strongly on the poor results the government have achieved since coming to office and avoid going over the events of the crash. Probably due to the pain of losing the election, Labour allowed the Tories to drill in the mantra ‘Labour’s mess’ into the public’s consciousness for 2 years. Say a lie often enough… The effort required now to change people’s ‘programming’ is just too great to be worth it.

  • Andy

    The decade of growth was built on debt. It’s time for a bit of honesty with the voters. Manufacturing declined as rapidly under labour as under thatcher. I’m no fan of the coalition but I’m remembering the words of that Who song – won’t get fooled again.

  • Gerard

    Point 2 cannot effectively be made until Labour’s leading figures urgently address/rebuff specific issue of ‘Labour’ mess we inherited. It is insane that Con/Libs convinced public that world banking crisis was created by a UK Labour government!
    ”Black propaganda’ has to be fronted up immediately and not left to fester. 
    The way UK press maintains the line, I’m amazed that one of those G20 type summits haven’t addressed Gordon’s guilt. Where are the demands from other world leaders for a Hague trial? Why no urgent calls for Blair and yourself to give evidence of the Labour heirachy’s master plan to destroy the Western World in your supine support for George Bush?
    I think I’ll contact the Guardian, Channel 4 or the BBC; there must be a drama/doc in this? 

  • Olli Issakainen

    IMF is an unit of United Nations.
    But it is now right about Britain and the eurozone.
    Britain will miss the borrowing target.
    Britain will grow at best 0.2% this year. 1.5% is needed for the country just to stand still.
    2.5% for the unemployment to come down.
    Plan A has failed and should be ditched immediately.
    Much of growth and prosperity during the New Labour years was fuelled by debt.
    New Labour made the mistake of adopting neoliberalism and light regulation.
    But it saved Britain from depression.
    Ed Miliband is right to criticize bad capitalism. We need a new economic model based on fairness.
    Latest scandals involving Barclays and HSBC show that things need to change.

  • I’ve never been a Blairite, but will give credit where it’s due.  And if Labour really did manage our economy better under Blair & Brown than the current Coalition, then fair enough.

    And I particularly liked this line Alistair, “This is a government whose actions can generally be predicted by looking
    at what they said in Opposition, and working out the opposite.”

    Simply because it’s so damned true!!

  • Anonymous

    1) The Coalition government is exactly what the electorate did vote for, and what we would get every time if we had PR.
    2) Labour left us with the biggest structural deficit in history
    3) The current mess is due to excessive public-sector spending by Labour, and the Eurozone crisis. Have you forgotten Liam Byrne who said ‘There is no money left’ and as Chief Secretary to the Treasury he should have known.

    That’s it. Win the argument, or in your case spin the argument. Do you really believe that Labour saved the World from Global depression?

  • Nick Cavell

    Part of the reason for any deficit is that, in 1997, the Tories had left the the physical and social infrastructure of the country in a disastrous state and Labour had to fix it, that costs money.

  • Mick

    More than a decade of public sector & private debt fueled growth – labour clearly have learnt nothing.  Credit cards, 100% mortgages, PFI, the “ending of boom and bust” are what caused the economic growth.  The public sector was over half the economy paid for by the private sector taxes (and what happened when the banks stopped paying bonuses and cut off that tax revenue (40% income tax, 11% employee NIC and 12.8% employer NIC (2008 rates) – so do not let me hear labour are going to “tax bankers bonuses” they are already do 63.8% to be exact and that was the gravy train lauded by Blair Brown and Balls) & I am afraid that most of the voters get that Alastair.  To think that voters are going to go for that line is IMHO delusional – OR very cheeky politics!!

  • Anna

    An American I knew once said that the problem with English public schoolboys was that they sounded so confident and assured that you assumed they were also competent, and, if you worked with them, you might find out too late that they weren’t. I’m not saying all public schoolboys are fools; but it can be difficult to detect incompetence under the superficial veneer of relaxed superiority that so many of them acquire in the privileged seats of learning. Cameron seemed to relish the role of PM and had the right manner – at the beginning. He and Osborne are looking increasingly frazzled and lost. Cameron’s short fuse in the Commons of late, and Osborne’s deranged, and possibly libellous attack on Ed Balls over the Libor scandal, reveal men getting more and more out of their  depth. Perhaps if they’d had Brummie or Cockney accents we’d have rumbled them sooner.

  • Nick

    The IMF are just confirming what any sensible intelligent person has known for some time .Severe cuts without creating growth is a toxic mix that is a race to the bottom .Poilicies such as reinstating the 50% tax rate , reducing VAT ,having a transaction tax on the City institutions.Get the housing market moving by subsidising first time buyer deposits .The knock on effect from that would be great for our construction and building materials industry .Ed and Ed should not be afraid of voicing their policies at this stage.Main reason is to nullify any attempt by PB’s 1&2 from claiming them as their own.Also it prevents the questions like “well what is the Labour party policy on getting the economy moving” .

  • Anonymous

    That labour strategy in full…

    Tax, borrow, spend – and then blame the ones who have to clean up the mess.

  • sarah dodds

    And if they can manage to get the message across that they left the  schools and hospitals in much better shape than when they found them it would be a great help too!

  • reaguns

    I had actually logged on here to praise Alastair, but this blog post is dire. He actually suffers from the same thing he accuses them of.

    Ok I’ll post the praise anyway, and deal with the blog in another one. I was just going to say that watching that Nick Buckles being interviewed, reminded me on various people we have seen in front of committees recently who have allowed themselves to be cowed like naughty schoolboys.

    Whereas Alastair has behaved well under questioning, like many of his political, and indeed banking and media colleagues. He has never looked nervous or on the hop. Similar performances have been put in by Tony Blair, Rupert Murdoch and many others.

    The question for me is, is this because deep down Alastair and co know they are in the right and so can hold their heads high, or are they simply better at riding these things out?

  • reaguns

    Ok, so the Tories are terrible because every good piece of news from the IMF they seize upon, every bad piece they ignore. Everything good that happens to the economy is down to them, everything bad was caused by external factors.

    Now I know both political parties are reliant on stupid people to elect them, but the dogs on the street are aware of the above in regard to the Tories… and they are aware that you can replace the word “Tories” with “Labour” in those sentences and still be telling the truth.

    Try an objective look Mr Campbell – as you are not capable of doing this yourself, and you cannot look to Balls or Osborne, I recommend Evan Davis – or do you only like him when he is saying the things you want to hear?

    The hypocrisy is incredible of what Alastair says above and then in the SAME post he goes on to praise Labour for its stewardship of the economy from 1997-2008, AND praises them for their response to the crisis! Sorry, but you either take responsibility or not. If the boom was anything to do with labour, then the bust was too. If the bust was nothing to do with labour, then you cannot take any credit for the boom.

    The truth is, had there been a bust 1 or 2 years after you took office, then you can blame previous governments, or external factors. But 11 years in – you carry the can. It was not a “Global Financial Crisis” some countries sailed through it, and we could have done so too.

  • reaguns

    Perfect opportunity, seeing as we are talking IMF, if anyone is interested in economics can I recommend an excellent excellent book I’ve just finished, one of the best I’ve ever read, its called Fault Lines, by Raghuram Rajan. I read it because of a column I read in city am here: http://www.cityam.com/news-and-analysis/allister-heath/fault-lines-the-heart-uk-politics

    In that column, Allister Heath seemed to imply Ed Miliband had read it, or at least was advancing a similar argument, but Heath said Miliband’s view was distorted. Having now read it, I disagree with Heath.

    Its hard to change peoples opinions, or move them politically leftwards or rightwards. This book changed mine, and moved me in one of those directions, I won’t say which but you can probably work it out when I say that it changed me from being an unenthusiastic supporter of Obama in the election this year (due to the terrible Republican candidates) who is a bit disappointed with Obama’s failure to bring universal health care, to now being an enthusiastic supporter due to Rajan’s explanation of the effect Obama’s reforms wil eventually have.

    Overall Rajan believes in the market economy, but believes inequality must, and will, be reduced using political means. He thinks long term solutions are better and he believes the key to this is education, education, education. Short term means (credit) will lead to problems, and they have. He believes US needs a stronger welfare safety net, then there will be less political demand for stupid short term policies.

    It also has to be said that Rajan has had a public battle with Paul Krugman, he disagrees with Krugmans spend spend spend approach (ie the approach of Ed Balls.)

    The reason this is all relevant is because Raghuram Rajan was formerly the Chief Economist at the IMF.

  • ronnie

    Who ‘sailed through’?

  • reaguns

    This is because the biggest constituency in Britain is the stupid vote. And we laugh at Americans for being stupid!

    Stupid people are convinced by the mannerisms of Blair and Cameron, or Bill Clinton’s hair. Hence the best argument anyone can come up with against Miliband is that he looks a bit weird.

    In reality, for the non-stupid, there is absolutely no difference in Cameron now than in 2010, or indeed in 2005. He always was, and always will be, a middle of the road, managerial, unprincipled, one nation tory of the “Wet” tradition. So no one should be surprised when he carries out Wet policies, or when we get the same results as we did when others carried them out in the 1970s.

  • Paul Thompson100

    A superb post!

  • I think that Ed Milliband has been doing very well and getting much right, but one thing that has worried me is how the Tories and Lib Dems have got away with blaming the consequences of the Global Financial Crisis on Labour.

    I wish that the three points made in this blog entry were being made by Labour party spokes people all the time.

    Maybe Ed Milliband has been biding his time, I don’t know, but the great lie put out by the Tory party and parroted by the Lib Dems that the economic problems are due to public spending is not being countered by Labour.

  • Dave Simons

    At the risk of pedantry, the Conservatives did get a lot more seats than Labour at the 2010 General Election. It is true that they didn’t get the overall majority needed to form a government, and it is true therefore that a Tory government was not elected. Nor did anyone vote for a coalition government between the Tories and the LibDems, any more than they voted for a Labour government. What we’ve had since 2010 is an effective Tory government aided and abetted by the LibDems, which is certainly not what most people voted for, but they didn’t vote for a Labour and LibDem coalition either, and I doubt if we’d be complaining if that had come about. I don’t think it’s fair therefore to be criticising the effective Tory government for being unelected. Nor do I think it’s wise to be talking about one-term governments at this early stage. I remember when Margaret Thatcher scraped into government in May 1979. Someone told me shortly afterwards that he didn’t think the Tories would survive the coming winter, but after eighteen years I think he had cause to revise that opinion! No – let’s brace ourselves for a hard struggle ahead and not get deluded into overconfidence. Thatcher was born again after the Falklands War and something like that could rescue the present government.

  • redrugbyfan

    We all know that the Tories, and their junior partners, have used the deficit purely as an excuse to promote their dogma and dismantle the state.  They don’t believe in public services and couldn’t believe their luck when finally gaining power they could begin the demolition job with impunity. 

    I find it astonishing that it is only now that members of the public are beginning to wake up to what is going on – it’s too late.  The NHS is about to disappear, schools are going to be run to create profits and the list goes on and on.  Margaret Thatcher must be very proud.

    Personally, I am filled with such despair because how are we ever to recover from this?

  • Anonymous

    They did say that in World War One, our fighting men were described as lions led by donkeys, albeit well spoken donkeys…
    http://www.youtube.com/watch?v=cHkOG7adupI

  • Anonymous

    reaguns, still think Mchael Foot could have been an excellent PM – he was a genius, knew Britain and NI inside out, but this was the early 1980’s when the establishment was up to their fun and games, via right-wing papers and mates.

    I almost bought shares then in a company that made donkey jackets, so optimistic I was for him, but then the smear campaign started, and they went bust.

  • Anonymous

    Yes, there is a danger of the 2015 GE election being a repeat of 1983’s one. The torys just need some more riots on the streets, a bizarre won war the other side of the globe with some numpty government, a huge trans-country strike of some sort (not miners, obviously – you find me a working miner in my part of the country today, and I will show you a dodo), and Ed Milliband to turn up in a fine jacket at rememberance sunday sometime, being described by Murdochs new bought/reinvented The Sun as being a working mans donkey one, with soviet spy unfounded undertones added.

    If so happens, we will be in big strife.

  • Anonymous

    The important thing to remember – from “point 3” is that the Tory policy was never to improve the economy using the fragile shoots of recovery, left, in part, by Alastair Darling et al. Their policy was to ensure that Labour were vilified such that any policy they wanted could be slipped through with a retort of “dealing with the mess….etc”

    This has allowed the potential disaster of NHS “reforms” to go through, the dismantling of some Quango’s that were doing a good job and a narrative aimed at cowing the workers in this country such that they would be just grateful for a job

    To this end, they had to kill off the recovery. They did this by in a v short time, destroying confidence, cutting public jobs and failing to even consider investment in infrastructure. Result, everyone – in danger or not, personally – cut spending, paid off debts and companies sat on money. QE is not longer a policy, and we have desperate attempts like this weeks “under writing” of projects as “a way forwards”

    I though that some 70’s Govts were poor, but blimey….

  • reaguns

    You tried to buy shares in the donkey jacket company? Why, Ehtch, you sound like one of those predatory capitalists, following the thatcherite dream of share ownership in the 1980s!

    Me, I never bought the shares but I did buy the donkey jacket, still have one actually.

  • reaguns

    “Fixing” things with a deficit?! Thats like saying “I fixed the fire in the that building by blowing it up with a bomb instead.

    You don’t fix things with deficits, its the deficits themselves that need fixing.

  • reaguns

    Singapore, China, Switzerland, Hong Kong in absolute terms. In relative terms, relative to us, just about every country in the world barring Greece, Ireland and 3rd world, socialist or totalitarian countries, but particularly Canada, Australia, Turkey, Germany. You see even though there was a “Global Financial Crisis” there was not a “Global Chanceller of the Exchequor Gordon Brown” and so countries who were not infested with that particular ailment could sail through the storm.

  • reaguns

    You left out “inflate”.

  • Dave Simons

     I don’t think that’s an accurate picture. You haven’t mentioned Spain or Portugal, and I doubt if the other countries you mention share your confidence in them having sailed through. China’s feeling the pinch now because of the reduced demand from which they’ve previously been riding high. Switzerland is a special case. Has Turkey sailed through? Other countries don’t share your jaundiced opinion of Gordon Brown – you ought to direct your criticism at George Osborne who would have had us queueing for our own cash in late 2008, after he’d promised to match Labour’s spending plans.

  • reaguns

    I’m sorry you make one good point, I was typing or thinking in a hurry and where I said Greece and Ireland, I should have included Spain, Portugal, Italy ie basically any of the eurozone southern europeans. If you want, you can give Brown and Balls some credit from keeping us out of the euro for that… but if you do, you must be intellectually consistent and point out that they mainly did that to spite blair, and that most of labour and lib dems, as well as plenty of ‘conservatives’ remain pro euro.

    Why is Switzerland a special case? What does it do that anyone else couldn’t do? There are no economic or geographic factors that prevent us doing the same thing, only politics.

    China’s growth slowed down, ie it went from 10% to 8% or something during the recession, and what has it slowed to now?!

    Turkey was barely touched by the recession and has rocketed out of it.

    Any country that is built on sound money, industry etc can ride a recession, but if you run your economy on debt, financial services, and selling stuff that people don’t need, then you have malinvestment and not only will you have a recession, you actually need a recession – the quicker and deeper the recession, the less damage you will receive. Hence when Reagan reversed the disastrous policies and he inherited, he had a sharp recession before getting tremendous growth, both gdp and job growth.

  • reaguns

    I forgot to answer the George Osborne point – are you suggesting that George Osborne would not have bailed out the banks?! Pah! Not a cheep against the bailouts did we hear from Osbo or call-me-Dave. One can’t let politics get in the way of our future jobs in the financial industry can one?

    I’d have voted for the Tories (or anyone else bar the BNP) if they’d been anti bailout – but they weren’t.

    Thats why its such a joke when this government gets called right wing, and its a joke when Labour is thought of as the anti establishment party.

    Lets look at a real political leader. It was remarked in the papers today that if Reagan were faced with the border staff strikers this friday he would sack them all. I don’t think he would, as their protest is legal, though he may change the law. But its true the air traffic controllers went on strike and he sacked them – there were no strike problems after that.

    However unlike Brown or this lot, he didn’t just hammer folks at that end – during the S&L crisis he bailed out the financial industry too – but he jailed a couple of thousand culprits too.

  • gnuneo

    hi Alastair, can i join your FB friends? Your articles on depression moved me a very great deal, ty.

    neil.
    https://www.facebook.com/neil.newman.393

  • Anonymous

    hi Alastair, could i join your FB friends? I was moved by your recent articles on depression, ty!

    neil,
    https://www.facebook.com/neil.newman.393