Saturday, December 03, 2011

The issues raised by Danny Alexander's appearance on Newsnight

Danny Alexander cannot write the Liberal Democrat manifesto for the next election, so to that extent his comments on Newsnight were misconceived.

But there are two far more important lessons to be drawn from that appearance.

The first is that, for a party that has spent so long anticipating being part of such a government, we have put remarkably little thought into the mechanics of coalition. Sooner rather than later, we were bound to come under pressure to commit ourselves to policies who life extended beyond the lifespan of our agreement with the Tories.

Of course, there are limits to which any governing party can make commitments about the future - it may not win the next election. But you can't help thinking the party's leaders should either have handled this a little more elegantly.

The second point is that all the major parties will fight the next election on programmes that imply more spending cuts.

Yes, even Labour. You would not know it from listening to any of its shadow ministers today, but the party fought the last election on a manifesto that committed it to unprecedented spending cuts. The difference between the cuts they would have made and the cuts George Osborne is making now is actually quite small.

So it was encouraging to find an article on LabourList that went beyond exhibiting a belief that government can just borrow more and more for ever and ever because it all makes sense if you read Keynes.

But even its author, Mark Ferguson, underestimates the depth of the problems we face:
Sadly though, Osborne’s mismanagement of deficit reduction means that a 2015 Labour government will still be paying down the debt for years.
I don't buy this Ed Balls line that if the government borrowed more it would not have to borrow less (and that is more or less what the shadow chancellor is arguing at the moment.

And no party is seeking to pay down the debt. The height of even George Osborne's ambition is to abolish the government's annual deficit over four years so that we stop adding to that debt even further.


Cornishjim said...

You have clearly not been studying the Guardian closely enough or you would know, paraphrasing Toynbee et al slightly, that Labour cuts would be nice cuts (& would not hurt any kittens) because they are nice people. But coalition cuts are nasty because Conservatives are nasty. QED

dreamingspire said...

The argument about merely avoiding adding to the debt is that it will be inflated away. The reason is all the money that we (and others) keep on printing.