Various Tory figures are strongly endorsing George Osborne’s warning in the Times this morning that too much government borrowing risks a run on the pound.
John Redwood has written on his blog that the shadow chancellor was right to do so and Michael Fallon, the senior Tory on the Treasury select committee, also agrees.
Speaking on Radio 4, the Sevenoaks MP said:
"It’s the shadow chancellor’s job to warn, and there’s a very serious issue with sterling now."
Meanwhile, Justine Greening, a member of the shadow Treasury team herself, has echoed her boss’s warnings.
"George Osborne is very much reflecting the broader concerns of the business community… The
point we are all making is that whether it’s good times Gordon Brown’s
strategy seems to be borrow and spend, whether it’s bad times, the
strategy is borrow and spend. Gordon Brown’s only strategy to this is more borrowing. Those are the concerns George Osborne is flagging up today".
3pm Alan Duncan: "George is absolutely right to say what he has. There is no convention in British politics that Labour has not already violated. I’d rather have George Osborne telling the truth than Gordon Brown charging around the world in the hope that we all forget Britain’s problems are his fault. Every sensible person knows that Gordon Brown has mortgaged the country and cannot escape the blame. Labour Governments always run out of money.”
5pm George Osborne has issued a further statement:
"What we’re seeing before our eyes is the largest fall in the pound in modern British history. The Brown devalutation of 30% in recent months is bigger than the Wilson devalutation or the Callaghan devaluation. One of the reasons is Gordon Brown’s decision to abandon fiscal responsibility and prudence as his boom turns to bust. Now behind-the-scenes spinning from the Prime Minister and his entourage in America are fuelling speculation that the government is planning to borrow recklessly for a big unfunded tax con. That will leave the British people with higher debts and higher taxes in years to come. The choice in British politics is clear. Fiscal irresponsibility and tax cons from Labour; fiscal responsibility and funded tax cuts from the Conservatives."
5.30pm Shadow Chief Secretary Philip Hammond has also been on the BBC to back Osborne:
"What George is spelling out in this interview is borrowing could precipitate a fall in the sterling. He is merely observing what is happening and what those in the markets would have told you. The public must realise there are no free lunches- Brown says to borrow more, there will be a cost to this… George Osborne has been getting on with his job and right now
his responsibility is to make aware the risks of Gordon Brown’s
borrowing, it is important we point them out."