Sunday, 10 January 2016
The luck of George Osborne
Luck plays a big part in politics.
Harold Wilson was unlucky in that, a few days before the 1970 election, international trade figures were published with showed a large (for those days) deficit. The reason was that we'd just paid the bill for a Jumbo Jet bought from the US but that part of the news was successfully smothered by the Tory PR machine and Labour lost the election.
Then, when Labour returned to office in 1974, poor Denis Healey, as Chancellor of the Exchequer, inherited both the inflationary consequences of the Tories' Barber Boom and the massive hike in oil prices as the result of the formation of OPEC. He was forced to borrow from the IMF and, although all the money was paid back before the subsequent election in 1979, that news too somehow didn't percolate down to the electorate, Mrs Thatcher won, the post war consensus was abandoned, neoliberal economics flourished, and our society has become more and more divided ever since.
No such ill luck for George Osborne: indeed rather the reverse.
With Osborne's back to the wall over tax credits last Autumn, revised figures for anticipated tax receipts enabled him to abandon the cuts which had been so absolutely vital only a few weeks before.
A few days before Christmas it was announced that government borrowing, which he is pledged to reduce come what may, had already almost reached the limit for the year, even thought here were still four months to go. Then the following day it was revealed that the growth rate for the July - September quarter had been only 0.4% rather than the projected 0.5% and the rate achieved the previous quarter had been revised downwards from 0.7% to 0.5%.
Happily for Mr Osborne the nation was already in Christmas party mood (indeed most were already on holiday)and few gave the news much attention.
Clearly Mr Osborne has given it some attention because, although according to his speech last Autumn the economy was heading for the sunlit uplands as a result of his "long term economic plan" he now tells us that there is a "dangerous cocktail" of new threats which are likely to impede our progress. These "threats" are, of course, all from external sources (the slow down in China, slow growth in the Eurozone, the fall in the price of oil - though I should have thought that last one would be to our advantage) and nothing to do with him, his unnecessary policy of austerity, "expansionary contraction" and ludicrous aim of a permanent budget surplus.
For more details see Bill Keegan's article in today's Observer.
By a combination of luck and clever presentation the Tories over the decades have managed to convince the electorate that they are economically competent. The notion is risible.