Wednesday 3 February 2010

Osborne's 8 pledges

At last one of the UK political parties has come out with a strategic direction for the economy. I note that the other two parties have massively laid into this; also the FT is against them as setting the bar too low. With this kind of agression, they must be a good idea.

Reaction to these pledges set out yesterdayday:

1)    Ensure macroeconomic stability
·         We will safeguard Britain’s credit rating with a credible plan to eliminate a large part of the structural deficit over a Parliament. Our fiscal policy will seek to help keep interest rates lower for longer.
·         The independent Bank of England will continue to target 2 per cent CPI inflation and will use its new role in prudential supervision to preserve financial stability.
2)    Create a more balanced economy
·         We will create the conditions for higher exports, business investment and saving as a share of GDP.
3)    Get Britain working
·         We will reduce youth unemployment and reduce the number of children in workless households as a key part of our strategy for tackling poverty and inequality.
4)    Make Britain open for business
·         We will improve Britain’s international rankings for tax competitiveness and business regulation.
5)    Ensure the whole country shares in rising prosperity
·         We will raise the private sector’s share of the economy in all regions of the country, especially outside London and the South East.
6)    Reform public services to deliver better value for money
·         We will raise productivity growth in the public sector in order to deliver better schools and a better NHS despite a tight spending environment.
7)    Create a safer banking system that serves the needs of the economy
·         We will reform the regulation and structure of the banking system to ensure lower levels of leverage, less dependence on unstable wholesale funding and greater availability of credit for small and medium sized businesses.
8)    Build a greener economy
·         We will reduce UK greenhouse gas emissions and increase our share of global markets for low carbon technologies.

So what do we think, ideologically they are quite sound - reduce the public sector, run a sound fiscal policy. It is a good start. No doubt he busted flush that is Labour will decry them - but they don't even have a strategy, let alone a policy!


Simon Fawthrop said...

Looks a bit like motherhood and apple pie. Can anyone be seriously against ay of them? Does anyone want economic instability? A less balanced economy? Increasing youth unemployment? etc

There's no wonder the other parties have laid in to it, they're probably pissed off they didn't write them first.

Mark Wadsworth said...

As TGS says, it's all MH and AP. He clearly doesn't have a clue HOW to achieve any of these, or to even be aware that a lot of them are no business of the government meddling anyway.

Sebastian Weetabix said...

I wonder which they are going to dump IF they get in? The green rhetoric with the carbon trading and energy taxes or the commitment to a business friendly environment.

Cameron & Osborne look like a pair of unprincipled f***ing chancers to me. As for 1.5 billion cuts, give me strength. 300 billion would be more like it.

Richard Manns said...

Whilst a lot of it is MH and AP, perhaps you ought to look at what's hidden in it as if it were MH and AP:

Improving Britain's international rankings for tax competitiveness and business regulation.

Translation: "Reduce corporation tax, etc, and reduce regulation."

We will raise the private sector’s share of the economy.

"The public sector will stop growing anywhere near as fast, if not shrink."

We will create the conditions for higher exports, business investment and saving as a share of GDP.

"We will set up policies to reduce the trade deficit and divert jobs away from the unproductive public sector to the private sector."

The whole point is that people look at the headlines and think "ooh, that's good" and then the accompanying paragraph tells them the actual Tory intention.

It's actually a masterpiece, because you haven't even noticed the "to get apple pie, the only way is Tory economic plans" subliminal message. And 31 years ago, Thatcher's manifesto was full of intentions like these, without the methods spelt out. Why hand your tactics to the enemy ahead of the battle?

CityUnslicker said...

Don't disagree with much of teh criticism - however we are going to get a Labour or Tory Government and at least the Tories have a direction here.

Putting in place a strategy is the first step.

SW - Don't disagree the cuts need to be bigger and all our politicians are avoiding this. Which is why I often say the IMF will have to do it.

CityUnslicker said...

Good points Richard - this is a strategy, not a policy statement.

James Higham said...

Of course, no specifics in the pipedreams - just an Obamaesque yes we can or building a better world.

There'll be some taken in. Interesting that you mention the otehr two parties. What, there are only three parties in the UK? I was under the apparently false impression that there were others too.

roym said...


but surely the electorate need to know just how:

1) they intend to reduce the deficit

2) to increase exports

3) what business regulations are going to be scrapped

4) to raise productivity growth in the public sector

before deciding to put that cross in the box?
far from a masterpiece, this is just a list of platitudes that may well be forgotten by the end of the month let alone polling day

Nick Drew said...

raise the private sector’s share of the economy in all regions of the country, especially outside London and the South East

absolutely essential, the degree of state-dependence in North/Scotland/N.Ireland is soviet union-style

but how ?? hate to split hairs but this is no strategy it's an aspiration at best

we could add: reducing numbers on incapacity benefit - everyone wants to, no-one has a clue how

I have no problem with Tories keeping their powder dry before the election so long as they remember: implementation is all, we have had enough of NuLab-style 'announcements' and faked tractor-stats

Pogo said...

Lots of "what", toss-all "how". :-(

James said...

You're never going to get any 'How' before an election, because they're all Blairesque chancers, why would they spell out policies which will of course lose them votes.

Much easier to just waffle, hand wave and watch as election after election the number of voters decreases.

hovis said...

I'm afarod I', with City Am's Allister Heath on this one. These proposals are simply overwhelmingly cr*p.

Partly in agreement with TGS that there is the tint of motherhood and apple pie, but more more worryingly this is simply re-heated big state spending tweaked. Cameroons are the new Edward Heath, wet ineffective not willing to question the concensus and destined to fail.

PS: the city am points out - why keep CPI? It fuelled the boom and was disasterous - even at the time many saw it as bad move and politically not economically inspired, (to be in line with the EU btw)

Marchamont Needham said...

Strategy - "A plan of action resulting from strategy or intended to accomplish a specific goal"

These are the goals, WTF is the strategy to achive them?

CityUnslicker said...

Labour have no policies at all. If the Tories announce any they will be derided and then stolen 2 weeks later.

better to show the general marhc of direction with some big picture goals.

Also, I think we should consider that the Tories genuinely fear what they will find in the Treasury books - until they see these any specifics are hostages to fortune.

Simon Fawthrop said...

CU, I think that last point is a good one. We haven't seen Alistair for a long time, I suspect he's being kept out of the limelight so he doesn't have to answer any difficult questions.

I argued along time ago on Jackart's blog that the Tories couldn't really have an economics/financial policy because things were getting dire and they wouldn't be able to go now in to detail. We are too close to an election for them to start getting shy and they need to start saying more, even if it means that when they get in to office they throw their arms up and say we didn't realise it was this bad, which they will do anyway whatever the state of the nations' books.

Mark Wadsworth said...

@ Richard Mann, Georgie wouldn't know HOW to cut corporation tax - all he has offered is reducing the rate but disallowing a deduction for interest costs and reducing capital allowances. In any event, he is a twat, The Worst And Most Damaging Tax is VAT, that's a simple and absolute and immutable fact.

@ ND and others, re reducing 'state dependence' in poorer regions, sorting that out is dead simple.

That's the "how", question is, do these chancers have the will?