The FT today reports a shift towards greater interventionism from the Conservative frontbench. It notes George Osborne’s support for restrictions on pay and bonuses within any banks that receive recapitalisation from the taxpayer. Mr Osborne made the interventionist noises yesterday, during his response to Alistair Darling’s emergency statement to the Commons.
Conservative economic strategy will be developed further today by an emergency economic committee that Tory leader David Cameron has established.
Up until now the Conservatives have not offered a radical alternative to Labour’s approach to handling the economic crisis. Mr Osborne and Mr Cameron have preferred to emphasise bipartisanship.
The Liberal Democrats, in contrast, are urging much more radical action to prevent the financial crisis from developing into a serious economy-wide recession. Vince Cable, LibDem Treasury spokesman, told the Commons that "radical cuts in interest rates" were necessary to "safeguard millions of jobs and homes":
"I have been a very strong advocate of the independence of the Bank of England; I made my maiden speech about it in this House 10 years ago. Does the Chancellor not think it appropriate, in emergency conditions, to make it absolutely clear that the mandate of the Bank of England must include responsibility for averting a meltdown in the financial and economic system? Those members of the Monetary Policy Committee who are going around saying that the problems go no further than the financial system need a line of communication back to planet earth. We do need to be thinking about radical cuts in interest rates. I know that the Chancellor has said that my comments on this subject are dangerous, and I recognise the dangers. These are very dangerous times, and decisive decisions are going to have to be taken over the next few days and weeks to safeguard millions of jobs and homes. I hope that the Chancellor will give us the leadership that we need on those issues."
Over on CentreRight, Andrew Lilico reviews ten economic policies that he hopes the Tories (and Government) might pursue. His menu includes a £30bn tax cut.