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By Paul Goodman
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Beveridge had five giants, the Prime Minister has five threats – and they are:

  • "First, instability in the eurozone – and the uncertainty and risk of contagion that brings."
  • "Second, debt and the muddle-headed thinking that over-indebted governments can spend their way out of the crisis."
  • "Third, the failure to deliver the measures actually needed for sustainable growth: namely monetary activism in the short term and structural reform to deliver competitiveness in the long term."
  • "Fourth, the risk that faced with growing tensions in the global economy, instead of progressively reforming the imbalances in the world economy, governments will put up protectionist barriers, just like in the 1930s."
  • "Fifth, the failure to follow through with the long-term reforms – particularly banking reforms and sensible financial regulation pioneered by the G20 which leaves us exposed to a repeat of the 2008 crisis all over again."


There is obviously a severe questionmark over whether half of Mr Cameron's solution to his third threat – quantitative easing – will work as he hopes, and whether the other half – structural reform – is really being advanced in Britain.  Tim Montgomerie ticks off various economic Plan Bs (or variations on Plan A) in the Times (£) this morning: Keynesian higher-borrowing-plus-tax cuts; radical supply-side deregulation (presumably with Beecroft in full); infrastructure spending on airports, roads and the power grid, funded on the back of the risk that interest rates would rise.

It is also doubtful whether the Prime Minister and the Chancellor really believe in the solution that they promote for the Eurozone – fiscal union.  Half of me thinks that they don't believe it, and wish simply to avoid being blamed abroad for the impending break-up of the currency by advocating it.  The other half of me thinks that they do believe it, and are simply scared witless by the possible consequences of the end of the Euro.  I don't blame them, though the best rejoinder to their fears can be found in a superlative column by Boris Johnson in the Telegraph this morning.

But let's close by putting all this in perspective.  I don't want to be discourteous to the Prime Minister, but we are minor players in this international drama.  Just as the England football team isn't really the focus of Euro 2012, so Mr Cameron isn't really the star of the G20.  Though this scarcely matters: summits come and go, but crises remain.

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