This focusses attention rightly on what really matters. Too much
wrath has been stirred up on bogus accusations such as moats, and
duck houses (which were never paid for by the public anyway) instead
of on the real criminal - and near criminal - acts such as bogus
mortgages and unjustified 'flipping' for profit and evasion of
capital gains tax .
The fact that the irresponsible way the Telegraph chucked mud around
indiscriminately caused much of the shift of focus in the first
place does not make this top leading article any the less
important. The country is still borrowing as if there were no
tomorrow which for the borrowers may be true. But, we, who have to
repay the debts for a decade or more, should be glad that attention
is being directed once again to where it matters!
xxxxxxxxxxxxxx cs
=================================
After the political tumults of recent weeks, both in Parliament and
in the Government, it was well judged of George Osborne yesterday to
return the focus of debate to the issue that should worry us most:
the state of the economy. The shadow chancellor, in a speech to the
Association of British Insurers, proposed to establish what he called
"the new British economic model", to replace the version broken by
the financial crisis. Mr Osborne wants to redirect the economy away
from a rush for short-term gains and towards the pursuit of long-term
returns. This is a laudable aim, though it is one Gordon Brown also
set for himself when he took over as chancellor in 1997, with a
repudiation of "short-termism". What matters most for a Conservative
administration (something that looks more likely by the day) is to
create the conditions in which entrepreneurs can thrive, public
spending is rigorously controlled, taxes are not punitive, people are
encouraged to work and save, rather than live on welfare, and the
financial sector lends prudently to wise borrowers. Perhaps this can
be called a new model, but it is really the revival of an old one.
The distractions of the past month have also drawn our attention away
from the appalling levels of public indebtedness, of which Mr Osborne
correctly reminded us. Unless there is a return to sound finances,
there will be no recovery. The spend-it-and-hope approach of the
Treasury is not good enough. Britain is already on probation, in
terms of its credit rating, and could be downgraded this year, making
it impossible to fund the Government's staggering levels of
borrowing, and guaranteeing a visit from the IMF. Mr Osborne said
that tackling this debt crisis would be the priority for the next
Tory government, although the consequences of this have yet to be
spelled out, as they must be.
There are some promising economic signs, but they are not yet strong
enough even to warrant the description "green shoots". Good news,
such as a possible levelling out of house prices, is balanced by bad,
such as the announcement yesterday that the high-street branches of
the Cheltenham & Gloucester are to close, with the loss of 1,600
jobs. This will become a familiar pattern: even when the recession is
technically at an end, unemployment will carry on rising. Also, if
any upturn is to be sustained, the banks must free up lending to
companies for refinancing. The great danger is a "double-dip"
recession, brought about when a failure to tackle the debt crisis and
the continued siphoning off of national wealth into unproductive
public spending [which is exactly what Brown is doing right now with
redoubled energy -cs] kills off a nascent recovery. This might be
the baleful legacy left to Mr Osborne by his Labour predecessor
Posts
