On Coffee House yesterday Fraser Nelson was marvelling at the size of Barack’s. Much bigger than Gordon’s. Even Angela Merkel now has one. So, too, does Stephen Harper. Almost every politician of left and right is keen to show off the size of their fiscal stimulus.
Standing aside from the herd is Britain’s Conservative Party. I think bravely and correctly.
The stance is producing charges of being the do-nothing party from Labour. The do-nothing attack is clearly ridiculous. David Cameron and George Osborne supported the biggest bank bailout in British history. They have endorsed reductions in interest rates to levels never seen before in this country. They are advocating £50bn of guarantees for bank lending. There is nothing passive about the Tory economic policy but, crucially, the party hasn’t thrown away all sense of prudence in the rush to do something… the rush to do anything.
In five years’ time – perhaps sooner – economists and others will be examining the fiscal measures now being rushed into effect by Washington, London and Berlin. My prediction is that we will be reflecting on an orgy of wasteful spending. We’ll be reflecting on job creation programmes that created no lasting employment and infrastructure spending that produced bridges to nowhere. Japan is littered with infrastructural white elephants from its failed 1990s fiscal stimulus. The white elephants of this decade’s fiscal stimuli are more likely to have a sickly green hue. Fiscal stimuli cannot be fast AND effective. Well planned spending programmes won’t impact the economy for some time. Immediately impactful spending programmes cannot be well planned.
The Conservatives, of course, need a message now. Brown is trying to frame the political choice before the British people as the choice between the do-what-it-takes Labour Party and the do-nothing Conservatives. That’s not a fair choice. The real choice is between a Labour Party careless with the British people’s money – think Millennium Dome, NHS supercomputer, tax credits fiasco, gold mis-selling and a pointless £12bn VAT cut – and a government that will treat every taxpayer pound with great respect. This choice needs to be communicated with some anger. The scale of Labour waste is breathtaking.
Just as David Cameron gives too many speeches, The Sunday Times’ David Smith is right to point out that George Osborne sends out too many press releases. Rather than commenting on every economic development the Tories need one big economic message and I think that David Cameron and George Osborne are almost there (and they’ve been right to take their time). ‘We will spend your money wisely’ isn’t just an election-winning position. It’s the beginning of a great work; the restoration of sanity to the public finances.