If the election is the Tories' to lose, 'politically naive' spending U-turns could be how they do it
I am reminded this morning of Sir Francis Drake insisting on finishing his game of bowls before going to see off the Spanish armada! Promises, promises and yet more promises on government spending cuts but all of them seemingly accompanied by one message – not yet!
Well, not until well after the General Election at any rate and probably not until 2011. Given the depth and extent of UK economic problems, doing nothing or being seen to put off the inevitable is hardly going to be a recipe for success with voters that are probably a lot smarter than many of the politicians they will soon be asked to elect. Translated, that means that although it may be quite normal for government to backpedal on matters of economic policy, believing that the sole purpose of its focus now should be to play to an electoral audience hoping to win back lost votes, those that seek to unseat them must be seen to be far more credible.
Of course, after thirteen odd years quite frankly we would probably expect nothing less than a degree of deceit and dishonesty from the incumbent government. But I neither expected nor wanted to hear the Tory leader David Cameron yesterday backtracking to the extent he did on the scale and timing of cuts that a potential Tory administration might make during the current fiscal year.
I am sorry to have to say this but quite frankly the BBC1 Politics Show interview between the excellent Jon Sopel and David Cameron was one of the worst performances that I have yet witnessed from a Tory leader. It was enough to send shivers down the spine of some of those that had, until yesterday at least, really thought that the Tories were pretty serious about running a prudent economy and bringing Britain back into some sort of shape.
Last week was very much of a ‘that was the week that was’ for me. There was at least some good news – the improvement in US GDP and a bit of recovery in stock markets. Sadly though there was to be no really good news about the UK economy – note that I am not about to be taken in by anyone seeking to remind me that as we also had figures from the ONS telling us that the UK economy grew by 0.1% during the last quarter that there was just cause for cheer here at home. There isn’t.
And despite one or maybe two quarters when GDP will not be showing decline there can be no real, underlying or sustainable improvement until our so-called political leaders stop hiding their own failures by attempting to butcher our banks; they stop ridiculous and unnecessary attempts to pass over regulation of our banking and financial sectors to Brussels or other foreign based bureaucrats; they stop pretending that all that is needed is a little tweaking of the system to bring the budget into balance; and all will be well. It won’t all be well and it can’t be until we realise that at the heart of our problems is that we are living well beyond our means.
We can no longer afford the leviathan size of the welfare state that we created and we cannot continue to carry an unfair burden of global policing.
However, I will keep my powder dry until the Defence Green Paper is presented later this week. The bottom line is that the UK economy will be stuck in the mud for years. Eventual national debt totalling £1.5 trillion is unacceptable in the extreme and that there isn’t a moment to lose in reversing the years of unnecessary overspend.
If a man from Mars was to be hovering overhead Britain right now intent watching political and economic events unfold he might well be having a pretty good laugh! After all with a bit of luck he would this past weekend have been able to watch at various times on TV and radio senior spokesmen from both the government and HM opposition playing out the ridiculous spectacle of when they intend to start making deep seated spending cuts that are rightly deemed necessary if the UK books are ever to be balanced. Frankly I guess that if the Martian friend was as wise as I think and had more than a modicum of common sense he would scratch his head in both amazement and disgust and quickly head off to better climes!
Sure, given that Mr. Cameron clearly has the distinct disadvantage of not having yet seen Treasury books means that he needs to tread more carefully on some matters than Prime Minister Brown and Chancellor Darling. But that doesn’t mean that the Opposition Leader should be seen burying his head in the sand by all of a sudden changing his tune and ignoring necessity for the next government to put in place stringent measures to begin to reduce the budget deficit from day one.
Mr. Cameron may not have the real actual figures but he knows damned well that the nation is in a real mess. Yes, I know that a host of wider issues are covered in this last remark too – bank bonuses, the size of our banks and regulation – but it is the future direction of the economy and the change that is so sorely needed that is the only matter in hand today. True, the bottom line in this debate has to be that whoever is to be the next Prime Minister must indeed take great care over how and where cuts are made and how, why and who must suffer the inevitable rise in tax.
The person in charge of number 11 must ensure that government cuts and tax changes are done in a gradual form but that does not mean that either have the right to confuse the electorate. To my mind by seemingly changing his tune Mr. Cameron could, I am almost afraid to say, have done serious damage to how the electorate regards Tory economic policy. There is nothing worse than not knowing how bad the initial medicine will be or being left confused! It’s rather like stock markets hating to be surprised.
Indeed, I ask myself this – would a doctor not seek to give the worst tasting medicine first in the hope that he might at least stabilise the patient! Please don’t laugh because essentially this is about the scale of what we may be talking about.
Even so, a politically naïve attempting to do an almost complete ‘U’ turn in the manner that Mr. Cameron chose yesterday won’t win new friends. ‘What would the Tories really do?’ is the cry now being heard in the street…
Howard Wheeldon is the Senior Strategist at BGC Partners