Saturday, March 13, 2010

Lib Dems will not back early cuts, says Nick Clegg.

David Cameron and George Osborne's repeated promises to make as early a start as possible in cutting back the deficit faces a problem should the election result in a hung parliament; as Nick Clegg is making it perfectly clear that the Lib Dems would not support such a move.

The Lib Dems would not support a government which tried to make major spending cuts in the next financial year, leader Nick Clegg has said.

Slashing spending so early in the recovery would be "economic masochism", Mr Clegg told BBC Radio 4's Today.
It's yet another example of how isolated the Tories are with the position they currently hold.

We have already seen that the International Monetary Fund backs Labours position on this and explicitly condemns what Cameron and Osborne are proposing.
In a rebuff to David Cameron's avowed intention to start repairing the public finances as soon as this spring's election is over, the Washington-based IMF said the fragility of the global economy meant stimulus packages should be left in place well into 2010.
And now we have the Lib Dems telling us that they will have nothing to do with the "economic masochism" which lies at the heart of the Tory economic plans.

And that's before we even get to the fact that the city have expressed concerns that George Osborne would not be a credible Chancellor.

Few wanted to go on the record with their criticisms of Osborne, but the views of David Buik, senior analyst at the City brokers BGC Partners, are typical of what I was told. "I find it quite extraordinary, however delightful he may be, that his only experience, in terms of business, industry or commerce, has been as a speechwriter at Tory Central Office and that he should be the chosen person to be the next chancellor of the exchequer. I know he's a quick learner, but it's frightening. And I say this as an obsessed Conservative . . . I haven't got a bad word to say about him [as a person]. But you have got to have some experience of life."

Stephen Greenhalgh, the Tory leader of Hammersmith and Fulham Council, in west London, and an influential figure in the property world, said as much on 26 November. He let slip that most of the shadow cabinet "haven't run a piss-up in a brewery", and singled out the man who is due to be "running the finances of the nation".

George Osborne has never held a proper job in his life. His first job was to to provide "data entry services" to the National Health Service to record the names of people who had died in London. After that he worked briefly for Selfridges. Since then he has always worked for the Conservative party.

And yet, David Cameron is now proposing that this man be put in charge of Britain's finances, despite the fact that almost no-one agrees with what he is currently proposing to do with the deficit.
"From what he says, I think he's got a relatively poor understanding of the macro [economic picture]," one banker who has regular contact with the shadow chancellor's office told me. Osborne certainly failed to offer a convincing argument about what he would have done with Northern Rock in 2007 (he opposed nationalisation) or how he would have saved the Royal Bank of Scotland and Lloyds a year ago. Critics say he was slow to grasp the severity of the spending crisis after the bank bailouts.
Indeed, he has only ever been asked to make one difficult call - what to do with Northern Rock amid the impending economic crisis - and he got that call utterly wrong. And he got it wrong because he did not understand the severity of the crisis in the world's economic system.

At least, the chance of a hung parliament, and Clegg's promise to oppose Tory plans, means that he might be prevented from doing too much harm.

But it is astonishing that Cameron is continuing to insist that his old Etonian friend will be our next Chancellor, despite the fact that many people worry that he simply doesn't know enough about economics to carry this off.

Click here for full article.

No comments: