Tuesday, 8 June 2010


The papers are full of talk of cuts, be they 'progressive' or 'radical' but somehow I'm not convinced by the rhetoric.

There is no doubt that we are in a bind. There is no question that severe savings are going to be needed. There is also no question that the commentators are more excited than they ought to be by the amazing return of 'politics', that poor relation to celebrity in the modern world but an old friend that many of us welcome back with warm affection. However, my problem is that we have heard all this before.

Pick a Prime Minister - (almost) any Prime Minister - and I would put a significant bet on the fact that they have said when arriving in office that things are going to be tough. If they had any sense they will then have done all the really lousy stuff when they first arrived before rolling in the pork barrel as the next election looms.

The exception to this is of course Tony Blair who benefited from a strong economy in 1997 thanks in large part to Ken Clarke, everyone's favourite Tory. This was fortunate because his chancellor for ten years turns out to have been economically illiterate and to have done much to contribute to the depth of our current malaise by not thinking ahead, even if he didn't directly cause it.

'We have abolished boom and bust' shall surely be Gordon Brown's epitaph as much as 'Iraq' will be Blair's.

So here's the deal: yes there will be cuts; yes, they will be painful but I am not persuaded that things are as bad as they are being made out. I am of the view that we have been here before and that a lot of this is plain, old fashioned spin on the part of the shiny new coalition. Will all the cuts be necessary? Time for a pregnant pause.

If the coalition lasts for two years we should start to hit the upswing in time for the next election. New spending will begin, Dave's grin will return, the Tories will start to pull the duvet back onto their side and all bets will be off. As for the Lib Dems, I wouldn't want to be Nickers for all the vuvuzelas in Soccer City when the disengagement comes.


  1. Clearly Cameron & Clegg need to prepare the ground for reductions in public spending at this stage. They would be stupid not to.

    However the scale of cuts being talked about, whilst large compared to the past few years of spend, spend, spend, will be far from devastating.

    The majority of people have had it pretty good for the last few years and belts will have be tightened a bit, but that's no worse than happens to people on an individual level routinely, if you change job, give up work to have kids etc.

    My judgement is that the vat majority of people understand that we have been living on the never, never and that it is time to start paying some of it back.

  2. You are seemingly both an optimist and a pessimist at exactly the same time. Both facets are ,I suggest, out of sync with reality.
    Firstly, on the cockeyed optimist front, there is not going to be an upswing in 2 years. Not a hope in that proverbial hot place. If you believe otherwise please list the sectors of the economy that you believe will be upswinging in that time frame or frankly any other in the near term.
    Which leads automatically to the political pessimism part. Cameron 'wants' the 'new politics' to be a permanent feature of the landscape. He has more in common with the non-loony type of LibDems than he has for instance with his own 'right'. He is not interested in getting rid of you just to be a prisoner to his own enemies.

    All the Party has to do is perform over the next 5 years(and it will take at least 5 years to even think about any economic up-tick), and it will be fine.

  3. Okay...

    Car production. New cars are coming on stream which are electric or just greener. More people have bought new cars recently and they will trade up, releasing their slightly older cars onto the market. There are financial incentives for this so it will happen.

    Energy production. We are moving towards new energy production both for green reasons and because our existing energy resources are starting to run out - power stations getting too old to use. There's a huge area for investment which must be made soon.

    Roads. Tories love roads so expect investment in new roads. I don't agree with this but I expect it to happen.

    The Olympics. We can reasonably expect a tourism boost to our economy. Tourism is the Cinderella sector of the economy but it brings in billions every year. The government can look forward to this with confidence as it is a fixed point in time. If it has any sense it will put in place a tourism minister to make sure that this sector gets as much investment as it needs. (This is an area of particular interest to me.)

    There are four reasonable-sized sectors for you. Will that do?

    BTW, I am an optimist and a pessimist but mostly I'm an optimist. The fundamentals of our economy remain sound and the whole thrust of my post is that we don't need to despair, just to be sensible about what lies ahead, as Liberal Neil says above. I think we are being spun a disaster so than when it turns out not to be the government can tell us how well it did to avoid said disaster.

    As for Cameron's plan, I agree but I think the battle with the Tory right remains in the wings and when it comes, our politics will revert to type and Cameron will be out. I'd say the fun task for Tory 'Kremlinologists' over the next five years will be to spot the next Tory leader.

    I am sure that the next election will be fought on the same political lines as the last one, with the LDs against the Tories and Old Labour banging on about irrelevances.