This one of the best d’Ancona has written. It has its priorities right and knows that that unless an incoming government has the will-power, the muscle and the majority needed to tackle Brown’s mountain of debt nothing will prevail. All other issues pale into insignificance compared weith our economic survival as a major power.
We must not let our country down by allowing peripheral issues to get in the way. A time to fix the priority.
Christina
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SUNDAY TELEGRAPH 13.12.09
Gordon Brown has failed.
Now it's George Osborne's turn
Labour played politics with the pre-Budget report rather than addressing the debt crisis.
The Tories must do better, says Matthew d'Ancona.
Alistair Darling reminds me of one of those kidnapped Colombian judges in sweat-drenched polyester shirts, who are forced to record messages of support for their captors, but try desperately to signal to the camera that they are doing so under duress. With every blink, every hesitant reply, every furrowing of his brow, even his hint in yesterday's Daily Telegraph that the hugely expensive ID card scheme may be scrapped, the wretched Chancellor seems to be saying: I know, I know, I want to bring down the public debt, too. But my captor, Gordo el Furioso – he will not let me!
Last week's pre-Budget report ought to have been a detailed technical manual, an emergency route map to save Britain, last of the big G20 nations still to be sunk in recession, from debt catastrophe. This year, we are on track for a £178 billion budget deficit, even as the economy shrinks by 4.75 per cent. Credit agencies, the Bank of England, the OECD and the IMF all warn that this is not sustainable: that Britain's public sector borrowing (about 12.6 per cent of GDP this year) is eating into what remains of its credibility in the global markets like a vicious rust.
Instead of a technical document, however, the Government delivered a series of political scare slogans clumsily knitted together with a few statistics. The purpose of this PBR, pure and simple, was to sow fear about the Conservative Party's plans and the fiscal tightening that (let us hope) would follow a Tory victory. "In 1997, our public services were in crisis," Mr Darling reminded the Commons on Wednesday. "The Conservative Party seems quite incapable of realising… that we must secure long-term sustainable growth in this country," he continued – adding that Tory plans would slow down demand too quickly and wreck the recovery. In other words: Vote Tory for a Miserable, Indigent, Hopeless Life.
The Brown regime long since ceased to conduct itself as a serious government: it is now a clunking electoral machine whose sole objective is to limit the scale of the Conservative majority next May or (if you believe the bookies) March. Most of the measures announced by the Government last week will never be enacted by Labour ministers: the promise to "protect front-line services" was pure political sweetener to stir into the Labour core vote's tea, and it is a safe assumption that Brown and Darling will be long gone when the proposed one per cent increase in National Insurance falls due in April 2011.
Within hours of the PBR's publication, the Institute for Fiscal Studies had found a £36 billion black hole in its pages. How would Labour pay for that? Mr Darling would have liked to have been able to answer that question, and evidently favoured a substantial VAT rise to make his final PBR a more plausible piece of work, and one that posterity might view with favour. The Treasury mandarins were understandably desperate for a plan that would hasten deficit reduction. But the PM was having none of it. As I wrote last month, Gordon's best legacy to the Labour Party could yet be a modest defeat. And his clear objective in this PBR was not fiscal stringency, but the consolidation of the crude notion that Labour are the good guys who still spend lots of money on nice things, and the Cameron Conservatives are the wicked, greedy Etonians who will force wee children up chimneys, re-open the workhouses and shoot Santa Claus on the grouse moors.
That juvenile "dividing line" is scarcely the basis for a winning electoral coalition: but – Labour strategists calculate – it might narrow Cameron's Commons majority rather significantly. And the scale of that majority is of the utmost importance not only to the shape of the party-political landscape after the election, but the prospects of the nation as a whole, and of its economic recovery specifically. Although last week's PBR naturally shone the spotlight of scrutiny upon the hostage Mr Darling, it was a reminder that, very soon, it will be Chancellor Osborne making major budgetary announcements to the Commons. He and David Cameron, both special advisers to the Major Government, remember all too well what it was like governing with a small majority, and then with no majority at all. They know that, to stand a chance of conquering Britain's structural deficit, they need a robust electoral mandate.
Osborne also knows that this job, so to speak, will be The Job. Of course, any Chancellor of the Exchequer has a shot at becoming Prime Minister – but of the 21 occupants of No 11 since the war, only four have done so (Macmillan, Callaghan, Major and Brown). Mr Osborne may buck the trend, but to stand a chance he must first be an outstanding Chancellor. So he and his team – more than any other on the Tory side – are preparing to hit the ground running, with an emergency budget within 50 days of the election and an autumn spending statement. Fiscal rules having proved pretty worthless in the Brown years, Osborne will subject himself to the discipline of an Office for Budget Responsibility: a fiscal watchdog that should, if it is genuinely independent, and is allowed to bite as well as bark, transform the terms of trade.
Though he is often accused of being too political by temperament, and insufficiently immersed in technicalities of economic policy, it is precisely the political arts that Osborne will need to end this public debt crisis. Which colleagues does he choose to disappoint first? In what order does he fight the big battles? How does he bring public opinion with him as he cuts into the flab of the state – and when, and in what circumstances, does he accept that he must take action irrespective of public hostility?
This is why one of the Shadow Chancellor's shrewdest proposals is the introduction of a "Star Chamber" system, to involve more Cabinet colleagues in spending decisions and to give stronger institutional form to collective responsibility for fiscal policy. To be honest, he will need this, and much more. If it does half of what Cameron and Osborne say it will, the next government will be racked by controversy over spending cuts, tax increases, and our old friend, "the language of priorities".
And that's only half of it. "To really get to grips with this," one senior Cameroon told me yesterday, "we have to reinvent the relationship between the citizen and the state." That's exactly right. If the Cameron-Osborne revolution is to be real, it must be about more than the politics of cuts; it must be about weaning an entire country off the malfunctioning, bloated post-war state. That is as big a change in the way we live as was achieved in the Thatcher era. Last week's PBR was the last gasp of the old. It is time now to see just how dramatically different the new truly is.
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