Sunday, 22 July 2012
If the IMF is losing confidence in George Osborne why isn’t the PM?
For the second time in a year the International Monetary Fund (IMF) has warned that the UK government could fail to reach its deficit reduction targets, as a result confidence in Chancellor George Osborne is plummeting.
The IMF report warns ‘post crisis repair and rebuilding of the UK economy is likely to be more prolonged than initially envisaged’, and goes on to say that ‘looking ahead the economy is expected to grow modestly, but with current policy settings the pace will be insufficient to absorb significant slack in the economy, raising the risk of a permanent loss of productive capacity.’
Not a good position to be in, in fact our prospects look about as bleak as those of a Dodo going internet dating. Government debt is predicted to rise from 78.8% of GDP to 79.9% by 2015/16 and the credit ratings agencies are starting to get jumpy.
This is the point when a sensible chancellor might want to open the file marked Plan B, there’s a problem though; George Osborne hasn’t got one.
As shadow chancellor Ed Balls put it as he called for more to be done to stimulate the economy ‘how much more damage must be done before George Osborne does the most important u-turn of all?’
Quite a lot would be my guess. You might be for turning, so might most sensible people; but not at all curious George just keeps trundling on towards the cliff edge.
Actually you don’t need a report from the IMF to tell you that austerity isn’t working, that it is, in fact, doing serious damage to our country. All you need to do is take a bus ride through any town and look at the boarded up shops, the houses that can’t be sold and the young people aimlessly wandering the streets. All you need is a basic ability to empathise with the experience of the people around you.
Nigel Lawson, a former chancellor under Margaret Thatcher, has criticised George Osborne for retaining his role as the Tories chief strategist, but the problem isn’t one of distraction, it concerns the dilemma facing modern politicians of all parties. How to understand the experience of ordinary Britons living through hard times when you are completely insulated from them yourself?
Never before have there been so many people with first class degrees from Oxbridge in government and yet despite this we are living under the most inept government of modern times. Take George Osborne (please and as far away as possible too) his experience of life outside Westminster is minimal and yet he has pushed through economic policies that will make many people poorer than their parents and their children even poorer still and done so with a smirking self regard that grows ever more offensive.
This might not matter so much, there have, after all, been duff chancellors before, if only he was in fear of losing his own job, but he isn’t. Far from it, our esteemed Prime Minister thinks he’s doing a splendid job. Hardly surprising perhaps since they both seem to be watching the sinking of the British economy with the comfortable detachment of first class passengers who know they will be ushered to a comfy seat in the lifeboat long before their handmade shoes get wet.
Contrary to the glum mantra chanted by the government there is an alternative, cuts to public spending may be inevitable in a time of global economic uncertainty, but they should be made from a standpoint of having clear priorities; not just of doing whatever you can get away with. It is the job of the opposition to articulate the case for such an alternative; the trouble is we haven’t really got one.
Almost two years into the job and Ed Milliband still hasn’t established who he is or what he thinks the Labour Party should stand for. At the moment he seems to want to be something different every other day, a traditional socialist one day standing on the platform at the Durham Miner’s Gala; a disciple of Tony Blair the next as a result despite health poll ratings he says nothing of consequence and in the long term impresses nobody.
This, along with the self preservation instincts of the Liberal Democrats is what will keep the coalition show on the road up to and maybe beyond the next election. There is a huge constituency of floating voters who are increasingly alienated by the current government and might be persuaded to embrace an alternative if one were presented to them in a sensible form.
It is notoriously hard to predict what the electorate wants this far out from an election; but judging by the way things stand I’d say it isn’t more of the same.