David Cameron today addressed the Conservative Party Conference for the first time as Prime Minister; the first occasion a Tory leader has done so as leader of this country for fourteen years.
His overriding message was, there are tough economic times ahead, but stick with us and we will get through it.
Really Mr Cameron?
Anyone from my generation who remembers 18 years of Conservative rule before 1997, can see history repeating itself.
The Prime Minister made much in his speech of the mess that Labour have left the country in after thirteen years of their misrule.
But those of us old enough have seen it all before, if not in the the thirties and fifties, but certainly the eighties: A long period of Labour in government, creating a huge budget deficit by spending money the country doesn't have. The Tories then come in and insist that the only way to clean up the country's finances is getting the budget deficit down very very quickly.
History has shown very clearly that reducing the deficit too fast by cutting public spending will actually take us back into recession, not further into recovery. That is exactly what happened in 1980-81 as a result of Thatcher's policy of reducing expenditure. I remember it like it was yesterday.
David Cameron is living in the clouds if he doesn't know that taking money out of the economy will only do a lot of damage.
The announcement by the Chancellor, of cuts to Child Benefit during the Tory Conference has not been received at all well by Party activists. They may have liked the Prime Minister's keynote speech, but many are very unhappy about the introduction of a policy that not only will hit many of them very hard but does not take combined household income into account.
I am reminded of how unpopular the Poll Tax was in the 1990s.
David Cameron knows, as do the rest of his party, that the Child Benefit changes are just a taste of things to come.
Everyone is holding their breath to see what will happen on October 20.
"A long period of Labour in government, creating a huge budget deficit by spending money the country doesn't have. The Tories then come in and insist that the only way to clean up the country's finances is getting the budget deficit down very very quickly."
ReplyDeleteThat's the most astute thing you've written. At least you acknowledge that Labour spend money the country doesn't have.
As to paying it back too quickly - it is simple economics - anyone who campaigned for the cancellation of Third World Debt in the 1980s knows the continued devastation to an economy that is caused if a country doesn't tackle its debts and if it ends up paying interest on the interest. A short sharp shock (and there is no denying that this has brutal impact in the short term) is still the lesser of all evils considering the alternatives.
We will no doubt go back into recession as a result of such draconian measures, like we did in 1980-1 following Thatcher's huge spending cuts in 1979. The 'short, sharp, shock' as you call it will cause huge unemployment and stall the economy. Rather nurture the fragile economy as it continues its slow recovery as opposed to starving it of the oxygen it needs to grow again.
ReplyDeleteI can't believe how badly the govt have handled the child benefit fiasco. I loved watching Jeremy Paxman making Theresa May squirm! Priceless! Talk about policy on the hoof!