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Cameron's Nixon moment

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Stephanie Flanders | 08:18 UK time, Monday, 1 February 2010

Nixon famously denied he was a crook. At the weekend David Cameron denied he was a recovery-wrecker, confronting directly the argument that faster deficit reduction would jeopardise growth. Intriguingly, he also talked about "co-operating with the Bank of England" to achieve that end.

I'll say more on the Bank in a minute: I'm not sure Mervyn King would be happy to hear the process described in such terms.

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But first a recap of the fiscal side. In his interview the Conservative leader said there wouldn't be "swingeing cuts" in public spending in 2010 (George Osborne never said there would be). But yes, he would "make a start" on cutting the deficit:

"And to those who say you're taking money out of the economy, I would say, if you don't do this, even more money could be taken out of the economy in two ways. One, because interest rates could go up as they have done in Greece. Secondly, money gets taken out of the economy because there isn't the confidence there and it's confidence we need so badly. "

He then claimed that if the UK was paying a Greek-style risk premium on its government debt, the average British mortgage would go up several hundred pounds a month. That's what I mean by a more "punter-friendly" explanation (later this week I'll say something about the comparison with Greece.)

For months, I've been wondering why Messrs Cameron and Osborne hadn't made more effort to dispel the idea that they would put deficit reduction before economic growth.

Rightly or wrongly, both men believe that cutting the deficit quicker and deeper than Labour plans - starting in 2010 - could actually help the recovery, by preventing a costly run on government debt, and sharply higher long-term interest rates as a result. By and large, they've struggled to get this highly respectable - but deeply counter-intuitive - idea across to the British people. But yesterday, Mr Cameron had a bloomin' good try.

This may be read as a "softening" of the Tory rhetoric around cuts. In some ways it is. But I don't think the substance of the Conservatives' post-election Budget plans has changed much in the last six months. What has changed is that they have finally decided to confront the "risking the recovery" argument head-on.

For months, I've been asking Tory strategists why Osborne or Cameron didn't assert more clearly that they wouldn't do anything to put the recovery at risk.

In their response they have often adopted the slightly patronising tone of the professional political operative talking to a naif. That would sound hopelessly defensive, they would explain - and risked giving the opposing argument more weight. Like Nixon saying "I am not a crook".

Yesterday, those concerns went out the window:

"Return to strong, sustainable global growth is still some way off. I can reassure you that we are not about to jeopardise Britain's economic future by suddenly pulling the rug from under the recovery."
Put it another way: "I am not a recovery-basher." Defensive, maybe. Necessary - quite probably. Tory high command now realise that if they don't make the growth argument crystal clear, there will be too many voters worrying whether the Tories will pay any economic price to get spending and borrowing down.

Now, one of the big reasons why Cameron et al think the economy could withstand some fiscal tightening is that they believe monetary policy could counteract any effect on growth - if not by cutting interest rates (a bit tricky just now), then by holding off rate rises for longer.

In the interests of the new clarity, the Tory leader tried to incorporate this thought into his comments yesterday as well. But in so doing he started walking on some very thin ice. Here's what he said:

"The fact that we need to make a start is absolutely clear - must, must happen. The scale of what can be done should be done in co-operation with the Bank of England, with the monetary policy authorities... because of course one of the aims of what's being done... is to keep those low interest rates."
As of May 1997, our central bank is supposed to be independent of the hopes or needs of any government. Arguably, the Bank's quantitative easing policy has already blurred that independence at the edges, because all those public and private bond purchases since last March have been underwritten by the HM Treasury. Everyone accepts, this is an exceptional arrangement for exceptional times. But as we are now seeing, the times will continue to be exceptional after the election. Whichever party wins.

There are already regular consultations taking place between George Osborne and senior Bank officials (including Mervyn King) to help each side know what they can expect from the other if and when that Osborne emergency Budget in the summer ever gets delivered.

But, arguably, that falls into the category of appropriate consultation. For Cameron to say bluntly that the scale of any 2010-11 tightening would be set in "co-operation with the Bank of England" takes both sides onto dicier ground.

Independence means the MPC sets interest rates by a monthly vote, independent of what any minister might have wanted - or been promised.

Many have thought that QE posed the greatest challenge to the Bank's independence since 1997. As it turns out, QE could be just the start.

Comments

Page 1 of 3

  • Comment number 1.

    Now there's a turn-up for the books. Yesterday's tough talk is tomorrow's whimpish withdrawl. Things never change when the Conservative's are announcing policy.

    Contrary to Stephanie's assertion they did announce that they wuld cut deeper and faster than Labour.

    So what are we left with? Not a lot of choice if you ask me!!!!

  • Comment number 2.

    What we are seeing is yet again proof that both main parties are in fact the same. I was quite confident that we would hear this kind of statement as it has become traditional in British politics that in order not to disturb the City both parties pledge that they will continue with the policies of the incumbent party after an election. Labour did it in 1997 and now, as I was expecting the Tories are doing the same now. It is really rather pathetic.

    In reality this cosy consensus is one of the causes of our economic malaise. We need radical change to disrupt the cosy City of London (synonym for bankers and financiers). We have to change. Change is critically necessary. Continuing with the same old ways in the City is simply not an option. However neither party has the courage to do that which economic imperatives propel us towards.

    Both Tories and Labour have pursued that same policies since 1978 and this is cause of exactly the society-less, increased economic disparity and finance-only Nation that we live in today. We need change not more of the same! (Or simply, DC is as wrong as GB!)

  • Comment number 3.

    Labour's election strategy is to frighten voters into thinking that the Tories will cause a double dip recesion.
    The 'Politics of Fear' is in New Labour's DNA, whether it's terrorism, bird/swine flu, Iran, Iraq, climate change, etc
    Keep the electorate in fear of something, and make sure that it is known that only New Labour that can save you.

    So whatever the Tories say on the recovery it will be twisted by Labour into a fear factor.
    So the Tories should say not a lot on the recovery, but spell out in clear and constant terms that it was, in large part, Gordon Brown's policies that got us in such a state. And do want more of the same ? That is the question that should make people scared.

  • Comment number 4.

    "they have often adopted the slightly patronising tone of the professional political operative talking to a naif" - lovely phrase, sadly sums up about 99.9% of all politicians waffle.

    At least most people who post here accept that over the course of the next parliament whoever is in power will need to cut somewhere around £100 billion off public spending. The difference between me and most politicians is that when I talk about cuts I mean real cuts from the current budget whereas when politicians talk about cuts they mean reducing the rate of increase.

    What I believe, which I know most labour and liberals will not, is that over the last decade Lab has let public spending get completely out of control with the result that much of the "growth" in the economy over the last 5 years is a complete mirage. By 2008 (the peak of the boom) public spending was something like £60-75 billion higher than it should have been. This is due to the obsession that "govt must do somthing" and a belief that the right response to any problem is to throw money at it and if that does not work throw more money at it (and keep repeating until problem solved or media bored)

  • Comment number 5.

    The risk to recovery is not just from concrete monetary effects AFTER the tories get in to power.

    The UK economy has changed. The old privately owned industries have gone. Services are a big wealth creator. Many of those services are provided by government and the numbers employed in public sector services is huge. The NHS alone is the worlds second largest employer.

    All these people carried on working as normal and carried on buying as the private sector failed - limiting the depth of the recession. But what about these people's confidence today?

    Listening to tory gloating about spending cuts will any nurse, teacher, road mender, university lecturer, hospital receptionist, builder who builds schools/hospitals etc etc go out and buy a new car this week?

    Is this damge to confidence why the US economy is blossoming and ours is still stagnant?

    The tories need to wake up and understand. Their intentions are already holding back the recovery. (....and do they realy think the millions of people they are promising redundancies are going to vote for them??? Turkeys voting for Christmas?)

  • Comment number 6.

    Politicians are seldom open or truthful because when they are the voters dont like it, opposition scarmongering takes off, and support drifts away.

    There lies the problem of scaring voters with talks of cuts even when its blindingly obvious they are needed.

    So like labour there will be soothing words of continued investment and stability when the reality will be something very different when whoever gets in.

    I credit the Tories with at least trying for a time to tell the truth, if even only to find that (potential) voters are just as untruthful to themselves by not accepting reality.

  • Comment number 7.

    I'm trying to recall when the Tories said they would make 'swingeing cuts'.

    As far as I remember, it has only been Labour and Libs who have said the Tories cuts would be 'swingeing'.

    The Tories have consistently said they would make cuts deeper and sooner that Labour in order to reduce the deficit quicker. All Cameron said yesterday was that Tory cuts would not jeopardise the recovery.

    Why are the media so easily choreographed by Labour spin?

  • Comment number 8.

    Neither party seems willing to meet the problem head on and take a big knife to the number of people employed at all levels of government. The idea that this would increase the benefits handout is true, but it will cost the taxpayer and business billions of pounds less to pay for it than paying the overblown salaries of unnecessary civil service and government agency jobs. If the average salary is around 20k, then there are not many people on the dole earning this amount. The idea of government being the largest or only employer is what got the country into the state it's in, or we would have been out of recession as soon as every country in Europe except our fellow traveller Greece.

  • Comment number 9.

    The Myth of the Black Swan.

    I like the implication that just as there is no way to draw the line between 'exceptional' and 'normal', then how can we draw the line between polity and economy.

    Cameron may be choking on is breakfast at the syllogism ' not crook then crook', therefore not wrecker then wrecker !

  • Comment number 10.

    " Of course the pace of fiscal tightening has to be determined in co-ordination with the independent Bank of England and monetary policy." George Osbourne 6th October 2009

    I am no advocate for the Tories but why do you use the phrase " in the interest of the new clarity" when they were saying this last October? As far as independence of the bank is concerned, the chinese wall has been paper-thin since the emergency loans were sunk into the banks with taxpayer's money, the Treasury indemnified the Bank's special operations and central bank funds started buying government debt. I suppose if the conflict of interest achieves an objective you support, you tolerate it and cheer it on, and vice versa.....

  • Comment number 11.

    I'm so pleased that in Scotland we have the SNP to vote for as well.

  • Comment number 12.

    Don't trust David Cameron - his eyes are too close together.

  • Comment number 13.

    Right so he should stick to what he said rather than do what's best for the country?
    This is the problem with Labour politics:- politicians are so bothered about maintaining their own face and public perception that they will follow what they said - to the letter, even if this means they're doing the wrong thing just to avoid being called indecisive or "u-turning".
    It's ridiculous - if, for the good of the country, David Cameron has to change his mind and do something slightly different to what he was planning to do before, then he should be able to do so without being labelled incompetent.
    Don't forget, it's easy for Brown to decide what to do (that doesn't mean that he will decide, of course): he has the figures sat in front of him. Cameron - what's he got to base his prospective economic policies on? The information that we, the public have available to us, and nothing more.

  • Comment number 14.

    5. jon112uk wrote:

    "Listening to tory gloating about spending cuts will any nurse, teacher, road mender, university lecturer, hospital receptionist, builder who builds schools/hospitals etc etc go out and buy a new car this week?"

    Perhaps not, but it isn't these people who need to be worried, it's grossly overpaid overpaid civil servants, layers of unnecessarily duplicated bureaucracy at all levels of public service, and the 'five a day coordinators', 'Smoking cessation officers' and ' Diversity monitors' that plague our councils who need to be worried.

    As 8, kaybraes points out, these jobs cost more to society that they contribute. It would cost the economy less if they were on the dole. People might argue that they 'spend their earnings in the economy'. This might increase the velocity of money (a good thing of course), but they're not creating wealth.

  • Comment number 15.

    I completely disagree with what was written there. For example, its worth a note that Labour at first, around July 2009, said they wouldn't be making any cuts,now they say they are...
    This country has been through the mill with the Labour party in Government- or dragged through the mill by them, and its quite clearly time for a change ofGovernment, fresh ideas, in order to get out of the Labour rut that we are stuck in.

  • Comment number 16.

    Although I have always known that the growth of the public sector has got out of hand, especially in the North-East, I didn't realise its as bad as reported yesterday:

    http://business.timesonline.co.uk/tol/business/economics/article7009695.ece

    Across the country as a whole, it says 57% of new jobs created during the period 1997-2007 were state or “para-state” — dependent on government spending.

    In the West Midlands these jobs accounted for all of the rise in employment, with no new private sector jobs generated overall.


    When you realise that this isn't labour spending to get out of a recession, but the result of 10 years in power, up until 2007, BEFORE the current crisis, it hits home how bad it is.

    The Universities are complaining how bad things will be because they have a few hundred million cut from their budget... and we are borrowing closer to £180 billion a year more than we earn, meaning that that this level of cuts will be rounding errors compared to what is needed to bring our finances back into order.

    So I have some sympathy with Cameron, trying to get elected yet knowing that honesty will kill off his chances, as most people prefer to live in ignorance than face up to drastic change.

  • Comment number 17.

    At last, the policy is emerging. The Tories are salivating at the prospect of getting
    their sticky fingers on the Bank of England, they hate the thought of anything out
    side their control. I do urge people to remember what happened last time with
    their panic stricken attempts to support the pound, anyone for interest rates at
    15%? The other thing that came out of Davos was a commitment to support the
    recovery by creating jobs, this is anathema to the Tories, they only want 'real' jobs,
    so when they talk about the bonfire of the quangoes they mean the jobs that go
    with them as well.

  • Comment number 18.

    Nixon maybe a grabbing headlines however you lose all credibility with such silly comparisons and appear to be a Labour mole. Steph please stick to the economic facts.

  • Comment number 19.

    Stephanie

    The real problem is Brown's (Labour's?) current 'scorched earth' policy (to get re-elected - how selfish can one get?) on the current UK economy which is providing little platform for the Tories (neatly summed up by saintleo #3 above).

    The double dip is coming whatever the Tories say or do - Labour are scaremongering (whilst cleverly accusing the Tories of scaremongering).

    Tories just have to tread a fine line between tough (and correct) rhetoric balanced with political savviness that much of the electorate aren't going to vote in a 'NIMBY' way even if they acknowledge it, i.e. they're between a rock and a hard place.

    Fact is over half the electorate do not have a clue when it comes to understanding the impact of current government economic policy.

    Interesting piece buried in the Sunday Times yesterday on research done by Manchester University showing that 60% of employment since 1997 has been created by the public sector and para-public sector. Implications......

    Stephanie it would be good if you could provide evidence to back-up the claim that cutting debt levels sooner (through public sector cuts for example) is actually detrimental to the economy over say next 2 years, 3 years 5 years and ten years.

    Because this government assertion has actually, as far as I can see, not been proved...........

    There's part of me that would like to see G Brown being voted back in to laud over the catastrophe unveiling and take all of the opprobrium this would eventually generate.

    But I'm not selfish enough to just be seen as right because I care about the country far more.

    Whatever the Tories say/do I'll go with it being better than the crazy alternative a third of the electorate are voting for at the moment (and obviously for themselves selfishly)........A hung parliament is no better for the country either......

  • Comment number 20.

    Soros and Roubini two of the most respected economist both say the biggest threat of the feared double dip resession is goverments overtighting/cutting to early before the economy can stand it. My vote will go to Cammeron.

  • Comment number 21.

    Alan, I echo your thoughts. Stick to the economic facts. And to RWW Cardiff, take a look at the state of the economy...and whos in government....and the large government deficit....and then you will realise that a Tory Government is the way forward...the only way forward. When Margaret Thatcher was in charge...she spent most of her time clearing up the mess the last Labour government left...i think it will be the same this time.

  • Comment number 22.

    'Cameron's Nixon moment' - wow! No chance of the beeb being on the fence, eh? Tomorrow; 'Cameron's Hitler moment'. ROFL; you think you are journalists? You are an utter joke and I am tired of paying your salary.

  • Comment number 23.

    Three thoughts.

    First, something will have to be done to reduce the public spending deficit. As I underastand it, this year and the next we will be borrowing roughly £178 billion out of a total government spending of just under £600 billion. you can't go on borrowing a third of your "income" to cover current expenditure.

    Second, the idea is that "the economy" will recover at some point and the renewed growth will result in enough income to cover the deficit and repay the borrowings. This means that there is an expectation of economic growth delivering increased tax revenues - and so the point at which economic recovery is strong enough to "carry" the withdrawal of the stimulus will become visible as and when tax revenues start to increase.

    Finally, it is clear that this point may be some way off. Indeed, one has to consider the possibility that it comes too late to offset the increasing cost of the cumulative debt. If asked to bet on the more likely "exit strategy" from this debt I would put my money on inflation coming to the rescue before economic growth kicks in.

  • Comment number 24.

    There's nothing revalationary about Cameron's comments over working in colaboration with the BOE when determining fiscal and monetary policy. You cannot determine one without an effect on the other and thus you cannot have independent strategies and as such independent authorities deciding on these strategies. The BOE was never independent and never will be, it is one of Gordon's follies. The BOE are the biggest quango there is but they are still ultimately governed by the incumbent governement. You cannot salami slice macro economic policy between differing departments, you need a single entity devising strategy using an holistic approach. The ultimate responsibility lies with the elected government, now whether politicians are suitably qualified to take on this role is a debate for another time.

  • Comment number 25.

    I'm no great lover of DC but I agree broadly with what he is saying... if we don't get our deficit/debt under control markets will loose trust in the UK economy, we'll looses our AAA status (if we haven't already) and the cost of servicing our debt in the future will negate any potential benefits we see now from continued economic life support.

    Furthermore, if the UK economy doesn't maintain (regain?!) the trust of the markets how will we ever attract the inward investment we need so desperately to sustain a recovery?

    These arguments probably only sound 'deeply counter-intuitive' to the Sun readers that the Tories are trying to woe and I suspect that explains the delay in airing them - I prefer the description 'highly respectable'.

    In any case, if we don’t reduce our deficit soon it will be irrelevant who wins the next election - it'll be the IMF who is writing our budget!

  • Comment number 26.

    If Cameron is a recovery-wrecker what's so wrong with that?

    If there is a recovery it will be based on the loosest of foundations: the patient has had a cardiac arrest but the defibrillator has made him jump up off the operating table.

    We need to get this recession over with once and for all. Debts must be discharged; losses on bad investments realised.

    This is not something the current lot of career-politicians will ever do: they are happy to defer the problem as they are desperate not to have economic armageddon on their CV. They are all guilty of looking at the short-term, when what we need is strategic leadership.

    Just look at history:

    central bank as lender of last resort;
    deposit protection schemes;
    removal of gold standard;
    bailouts.

    All measures to prop up a system doomed to collapse. Its just deferring the problem.

  • Comment number 27.

    Mervyn King has been saying for ages that monetary policy and fiscal policy have to be co-ordinated and all David Cameron is doing is at last agreeing with that. The 2 main problems the Conservatives have on presentation of economic policy are : (1) Ken Clarke, who for all his undoubted debating skills is an 80's dinosaur - and (2) George Osborne, who consistently comes across as an arrogant, hectoring school prefect and seems to turn off anyone who can be bothered these days to start listening to him. Caledonian Comment

  • Comment number 28.

    Labour have shifted from a position of denying any cuts, to one of admitting the need for significant cuts.

    That, is muddle.

  • Comment number 29.

    Hi Stephanie
    This is a change of presentation of policy by David Cmaron isn't it? I suppose he deserves some credit for reacting to events as opposed to Gordon Brown's "clunking fist" which only appears to change policy when it is forced to.International investors will surely take note of this.Having read notayesmanseconomic updates I feel that Quantitative Easing is a much bigger challenge and problem than you seem to think.Just look at Japan and its problems

  • Comment number 30.

    Stephanie, you are supposed to be working for the BBC, to represent matters in an impartial manner, what are we to make of an article beginning "Nixon famously denied he was a crook. At the weekend David Cameron denied he was a recovery-wrecker", you may as well pin on the rosette and go on the campaign trail. This is a partisan piece and it is obvious where your colours lie. My vote is not 'bought and paid for' at the next election and I would like a clear representation of the facts, not campaigning on behalf of your chosen political party, it is confusing enough as all of the parties are giving out mixed messages, without you being so obviously biased in your commentary. Either you present articles in an impartial manner, or stop presenting them on the BBC, this really is not what I would expect, you are discredited by this sort of tripe.

  • Comment number 31.

    #16 jonearle

    Glad to somebody else noticed the said report...

    #17 RWWCardiff

    Sadly you appear to be one of the half I mentioned in #19

    #22 jules_

    Right-on.

    In fact could Stephanie actually state that she is not in anyway related to Polly Toynbee - just for the record.......

    To the moderators:
    Could you please take this as an official complaint about the biased reporting by S Flanders on this blog. It insults my intelligence....

  • Comment number 32.

    I think Cameron is dancing to a tune we should call the Cutters' Quadrille. It has to be played on a violin rather than a fiddle but the other instruments, a big drum and a trumpet are only hauled out when the opinion polls are good. It is pathetic!

    Sadly, it is clear that the Tories are terrified of being labelled the Nasty Party all over again. However, we actually do need a Nasty Party to sort out the horrendous public deficit because making hard choices, as Mr. Brown puts it, requires that sacred cows are slaughtered and vested interests be upset.

    It seems that the public deficit has become the elephant in the room as far as the political class is concerned. Why are they all terrified of speaking the truth? Do they think the electorate are that stupid? I know they keep trying to bribe us with our own money but since that money ran out they still seem to think that they have to dress up as Santa Claus for some reason.

    The economic ignorance and fiscal incompetence of the current government is obvious for all to see. Their economic policies have presented an open goal since 1997. The list of failure is endless: the destruction of the pensions industry, selling gold at the bottom of the market and telling everyone about it first, the tripartite regulation of the City in which nobody was responsible, the deliberate movement of the fiscal goalposts, a grossly unfair tax system that penalised the poor, regulatory failure and worst of all the deliberate expansion of the public deficit even before the economy imploded. The Tories have consistently failed to put the ball in the net since day one for the simple reason, like New Labour, they were mesmerised by the supposed genius of Gordon Brown. Who believes that now?

    What this country needs now most of all is someone to stand up and tell us exactly how it is, the cost of the current failure and provide a vision as to how we can move on. There have to be cuts so let there be cuts with a surgical scalpel in a timely fashion, so we will have a choice in what is cut and by how much. If we don't cut early then the when the cuts are finally forced on us by the IMF or the gilt markets it will be too late and the cuts will be done by an axe.

    Are we getting anything like that? No: just another variation on the Cutters' Quadrille.

    Lastly, it is pointless talking about The Recovery as that will never be anything more than anaemic until the spending cuts are well in hand. Recovery needs cash to trigger it, so why is it that with loads of cheap money sloshing around in the economy that we don't have recovery yet? Simple: nobody will take the risk because of the fiscal deficit.

  • Comment number 33.

    foredeckdave wrote:
    "Now there's a turn-up for the books. Yesterday's tough talk is tomorrow's whimpish withdrawl. Things never change when the Conservative's are announcing policy.

    Contrary to Stephanie's assertion they did announce that they wuld cut deeper and faster than Labour.

    So what are we left with? Not a lot of choice if you ask me!!!!
    ""

    Not a lot of choice from the foredeck of your herring trawler, dave, but just remember who got us into this crisis and who was denying that cuts needed to be made until January 2010.

  • Comment number 34.

    At 12:09pm on 01 Feb 2010, stanilic wrote:
    "I think Cameron is dancing to a tune we should call the Cutters' Quadrille. It has to be played on a violin rather than a fiddle but the other instruments, a big drum and a trumpet are only hauled out when the opinion polls are good. It is pathetic!

    Sadly, it is clear that the Tories are terrified of being labelled the Nasty Party all over again. However, we actually do need a Nasty Party to sort out the horrendous public deficit because making hard choices, as Mr. Brown puts it, requires that sacred cows are slaughtered and vested interests be upset.

    It seems that the public deficit has become the elephant in the room as far as the political class is concerned. Why are they all terrified of speaking the truth? Do they think the electorate are that stupid? I know they keep trying to bribe us with our own money but since that money ran out they still seem to think that they have to dress up as Santa Claus for some reason."

    Sadly the electorate IS, collectively, that stupid!


  • Comment number 35.

    So.

    Just to confirm,

    In a so called 'democracy' you have to be popular with key voters in a very limited number of seats.

    And you will not get elected if you do not placate those few voters.

    Those relatively few voters therefore dicate the entire countries economic policy.

    So why bother with all these MPs and Parliament, just leave it up to a few steets to decide whats what.

    It is difficult to fail to understand that the majority of voters are consumers of public services and a fair number are involved in providing such services.

    I thnk I pointed out the conflict in the position some considerable time ago.

    Do you think the situation is health is the question. How do you think gross imbalance on an input to a process will result in balance.

    Also please advise what you think is going to happen when decisions are taken out of politicans hands by a sheer lack of tax income and the money markets baulk - or raise the cost of finance to high levels.

    One minute Greece is reported as a pan European problem due to major debt problems, the next the general process that got a nation into that state is reported without much concern it would seem.

    Perhaps the seat of democracy is warning us of something. Things have to get worse and impact on a few buffered people before much can happen. Personally I find the possible drift towards the prospect of being a Helot - with a status between a freeman and a slave - is not attractive.

  • Comment number 36.

    Sadly Cameron has little alternative than to say things in worlds of one syllable as a sizeable minority seem to believe Government spending is somehow not their spending (in many cases probably true as on benefits etc).
    So he needs to be careful with his language now, but lets hope if elected he takes the radical action that is so desperately required

  • Comment number 37.

    Its amazing isn't it? The first sign of a dip in the opinion polls and David Cameron is all over the telly telling us that the Conservatives won't be cutting public spending early like they told us they would, they now just hope they might, if its possible. In fact the very idea that they might be making a serious start on tackling the deficit this year has been kicked so far into the long grass it might as well have been Johnny Wilkinson on the Andrew Marr show on Sunday. Anyone would think that Cameron was nothing more that an ex PR person who just says what he thinks people want to hear on any particular day of the week depending on which way the wind is blowing, and that can't be true....can it? The truth is that no politician is going to be making the decisions about spending cuts, tax rises or anything else, those plans will be being drawn up as we speak by the civil servants. It makes no differance who is standing at the dispatch box reading out the list. That is the reason you can't get any of them to spell out who is going to cut what, its because if they did we would see that they are all the same.

  • Comment number 38.

    "For months, I've been wondering why Messrs Cameron and Osborne hadn't made more effort to dispel the idea that they would put deficit reduction before economic growth"

    The bottom line is that they are an extremely poor opposition who are drifting toward a limp election victory rather than grasping the entire argument and running with it. If they had denounced Labour's laughable distortions from the start (they have never argued for swingeing cuts in 2010) then they wouldn't now be in a position where jounalists can distort their position, which hasn't changed, by claiming that it has changed.

    I find it absolutely bizarre that the Tories have actually allowed Labour to paint the Tories as the Party which is confused! Over the past six months the government position has gone from investment vs cuts, 'wise' cuts vs 'ideological' cuts, Tories spending too much (!), the largest spending cuts for 20 years, and now we are back to 'locking in the recovery' while announcing billions of pounds of cuts from higher education (presumably Labour is satisfied that we can rely on government and consumer spending for growth over the next decades).

    If this was a Party with properly organised press operations and a real desire to form the next government then they would be out of sight.

  • Comment number 39.

    32. At 12:09pm on 01 Feb 2010, stanilic wrote:
    'What this country needs now most of all is someone to stand up and tell us exactly how it is'

    Fair enough well this is how it is:

    Government spending in the next tax year is projected to be £200 billion higher than tax receipts.

    They can;

    1) Severely cut public expenditure = public sector job losses
    Cancel infrastructure and other projects = private sector job losses
    Cut benefits and pensions, = poorer sections of society get hit
    But all this would need to have started some time ago, and it’s only starting now.

    2) Try and borrow it by issuing gilts, but evidence suggests there isn’t the demand for £200 billion worth of them, and even if there was, the UK would end up in a compound debt trap.

    3) Substantially increase taxation, but then most would spend less in the private sector to compensate for it and the UK would fall into a compound tax spiral with more private sector job losses.

    4) Get The BOE to print another £200 billion to fund the shortfall like last year, but then sterling’s value will fall further, and facing the problem is only delayed another year in any event.


    Now providing Mr King doesn’t mind losing what’s left of his credibility as a central banker, I reckon they’ll go for printing more money.

    Which means sterling will fall further, and the pain will get spread all around.

    And it doesn’t matter one jot who gets in power, or even if it’s a hung parliament.

    Because debt knows no politics or mercy.




  • Comment number 40.

    A reminder of the impact of the blunder and plunder of the banks. The political discussion of cuts or no cuts needs to be more defined. What cuts, where, what programs? Everybody has their own set of priorities so it would be more honest to put something on the table and move beyond a discussion about theory and philosophy. So far the promise is to pull a rabbit out of a hat. Watching the deflation in Japan, this may end up being the path to follow, adjusting to real values and not those caused by the banking created bubble.

  • Comment number 41.

    Good analysis Stephanie. I thought overall it was quite balanced, except...

    Don't you think there is something extremely unbalanced in likening ANYONE to Richard Nixon in the title of an article? That's almost libellous, isn't it?

  • Comment number 42.

    At least with the Tories they can start with a clean sheet after 12+years of "New Labour" making and breaking promises left,right and Centre.Crime up,pensions destroyed,people not safe in their homes,the rise of ASB on sink estates,uncontrolled immigration,a bloated public sector,a failed banking system to name but a few.General Election? Bring it on!.

  • Comment number 43.

    39. At 12:52pm on 01 Feb 2010, Dempster wrote:
    now providing Mr King doesn’t mind losing what’s left of his credibility as a central banker, I reckon they’ll go for printing more money.

    Which means sterling will fall further, and the pain will get spread all around.

    Get your facts right... in the last year of QE pound has increased by 10% against dollar in the last year!
    http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/currency/11/12/twelve_month.stm

  • Comment number 44.

    Stephanie,

    It is bizarre to compare Cameron's comment to Nixon. To be honest, could say more for your biases perhaps than anything about Cameron or just the need for a catchy headline!?

    Otherwise agree with a lot here (although perhaps not the tone here and there).There is some distinction between the Tories and Labour - it is still clear the Tories are targetting a deficit cut quicker than Labour because they believe it is overall better for the economy and the recovery. If people were reasonable this automatically implies they don't want to go for cuts that would damage the recovery, but ofcourse they are not - this is politics! So Cameron decides to make this a bit more explicit. Its interesting how comments by Labour that Tories want to do swingeing cuts - something Tories have never said - can suddenly get reported as if the Tories said that is what they want to do- almost ficitionalising politics although that is pretty common to be honest!Labour haven't exactly been critised for being the ones to compromise the independence of the BoE through the quatative easing - although that is obviously what has happened and ofcourse Cameron can't ignore what is now the position.

  • Comment number 45.

    @42

    "Crime up,pensions destroyed,people not safe in their homes,the rise of ASB on sink estates,uncontrolled immigration,a bloated public sector,a failed banking system to name but a few.General Election? Bring it on!."

    Are you a Daily Mail columnist by any chance? Crime is down. Immigration is controlled by a points system. The failed banking system was a worldwide problem caused by a failure of international regulation and the bankers being at it.

    Anyway back on topic.

    I am glad the rhetoric appears to be around the timing of the inevitable cuts. A recovery will do more for the deficit that cutting expenditure early. Credit rating agencies (2 of 3 interviewed on Newsnight) have no intention of withdrawing the UKs AAA rating. The key is to cut when the recovery is strong to control unemployment and sustain demand. Do it too early and there will be a double dip as you take some of the power to consume out of the economy.


  • Comment number 46.

    Even the Tories on here must agree since the BOE became independent on interest rates, rates have been on average half when the Tories were in office.
    I seem to remember every time an election came along the Tories would reduce rates for political gain.
    Someone should ask Osbourne how much 12%+ interest rates would add to the man in the streets £100k mortgage. Beware 12% on 100k £1000 a month and that's just the interest.

  • Comment number 47.

    Several comments have been along the lines of "they can't tell the truth" and "are people really that stupid".

    After ploughing multiplied billions extra into education over the last 12 years over 50% of 16 year olds don't have a pass at Maths and English. Who knows what the level of education is of the average adult. So yes, you can be sure that if you wandered down the average street and asked people if they thought the budget deficit was a problem you would get very baffled looks.

  • Comment number 48.

    Steph or Polly or is it Gordon???? I would ask you to apologise for your stupid comments about David Cameron, not true, offensive and very childish, if this is the level of economic debate we are going to get, the BBC should this be Biased BC, then the next few months will be very dull.

    I agree with Steve that it is about time that Steph and the BBC started to quiz Gordon and hold him to account for getting us into this mess. And the Conservatives should raise the level of debate and stick with the economic facts. Gordon is still spining the lie that he is investing and not making cuts. ha ha

  • Comment number 49.

    Is the BBBC standing in the GE?
    Why Labour needs spin doctors when it has the BBBC in its pocket is a mystery.
    They could save money, I hear they are kind of skint at the moment.
    And this Business Sec .etc , when did he run a business ?

  • Comment number 50.

    The electorate IS as some of you correctly say stupid - don't pretend that the man in the street is as well informed as this geeky little blog. Cameron has to change his tune to make sure he gets in, sad but true. I hope when/if he gets in he can change his tune back and deal with the issues - popular or not!

  • Comment number 51.

    @49

    When did Dave and Gideon have real jobs?

  • Comment number 52.

    46. telw wrote:
    "Even the Tories on here must agree since the BOE became independent on interest rates, rates have been on average half when the Tories were in office."

    ...and you can see the results of that policy around you: run away asset inflation and the biggest boom and bust in history.

  • Comment number 53.

    51. At 1:31pm on 01 Feb 2010, peterward2008 wrote:
    @49

    When did Dave and Gideon have real jobs?

    Do you not remember Dave Camedroneon was economic adviser
    to Norman Lamentable on black wednesday.

  • Comment number 54.

    If the Tories are not doing a very good job of explaining their policies, perhaps that's because they don't really want to win the election.

    Let's face it, whoever wins the election is going to have an absolutely dreadful time trying to get us all out of the mess we're currently in, and it will probably make them deeply unpopular. Perhaps the Tories are playing the long game, and expect that after another term of a Labour government, Labour will be completely unelectable for a generation.

  • Comment number 55.

    This is frightening. Is David Cameron going to be more Ted Heath (at the mercy of events) or Lady Thatcher (master of them)?

    The UK needs swingeing public spending cuts, and it needs them now to restore internatinal confidence: reduce the size of the civil service to 1997 levels, cut public sector pay by 5% (as in Ireland), end all state-backed final salary pension schemes for local and national Government workers (at least for new entrants), cut the NHS by forcing big reductions in the number of middle-managers and ensuring that free treatment (except for emergencies) is not offered to non-EU nationals, big defence cuts (after the end of the Cold War what is Trident really there for?). The only time this can be done politicaly is at the beginning of a new Parliament, and it looks as if smiling Cameron will blow his chance ot balance the books and restore our long term prosperity

    Reality seems to have been suspended in the UK - welcome to fairyland

  • Comment number 56.

    52. At 1:35pm on 01 Feb 2010, the_fatcat wrote:
    46. telw wrote:
    "Even the Tories on here must agree since the BOE became independent on interest rates, rates have been on average half when the Tories were in office."

    ...and you can see the results of that policy around you: run away asset inflation and the biggest boom and bust in history.

    Rather than 80s and 90s look after yourself, unemployment, riots, run-down services, massive inflation.

  • Comment number 57.

    @52

    Gideon and Dave both see low interest rates as being key to exiting recession and the justification for spending cuts. So following your reasoning, the Tories policy of wanting low interest rates would eventually spark yet another asset bubble and a similar boom and bust?

  • Comment number 58.

    45 Peterward Do you still believe in Santa as well ?

  • Comment number 59.

    Stephanie

    There are interesting contradictions in the messages coming from the Conservative Party on the economy and the budget deficit. David Cameron and George Osborne have been repeatedly calling for immediate public spending cuts. They have failed to provide many details on where and how these cuts will take place. Cameron's latest statement is that these cuts will not be swingeing. He must think that people are completely deluded of the spending implications for the UK fiscal position; ignorant of the overall fiscal position and will not consider it at the polling booth; or relying on the "trust me I am Dave" reassurance. Voters have a right to know whether he will cut back public spending savagely, raise taxes and interest rates heavily too.

    Much is being made of comparisons with the pre-1979 election run up, with even Margaret Thatcher's campaign diet being made public recently. The Conservative Party had made no election pledges about the 1981 budget content, or resulting 3m unemployment that followed. This did not stop the Howe budget of 1981.

    Conservative Government's under Mrs Thatcher had created a reputation, rightly or wrongly for tax cuts, the same was expected after the 1992 election. I am sure that Labour Party policy wonks will be able to advise on how many tax rises were then implemented under the Major administration between 1992-7. 22 is a number that comes to mind, but this should be confirmed.

    Conservative Party advisors and parts of the media have been putting pressure on the Cameron leadership to adopt a tax-cutting mantra,like Mrs Thatcher. Apart from the policy think tanks, the former Thatcher minister Lord Forsyth has suggested £75bn spending cuts are required each year. Osborne has suggested £45bn will be enough. Phillip Hammond Shadow Chief Secretary to the Treasury has suggested only £1bn pa will suffice. Lord Forsyth undertook a policy review for Cameron, when he was elected Leader. Lord Lawson; the Tory Peer appeared on BBC's Question Time last Thursday, advocating a 1981 Howe style budget. Lawson was heavily involved as Chief Secretary to the Treasury at the time. Michael Fallon, the Conservative's senior spokesperson of the Treasury Select Committee has called for the manifesto to set out the tax increases and spending cuts.

    Amongst the contradictions in Cameron and his party's position are the following: "immediate spending cuts" and an "emergency", or "crisis" budget within 50 days, but no specifics on the nature of those spending cuts; combined with suggestions yesterday that the Labour Party is working on 5 months or 5 minutes planning. He has criticised the government for a lack of a plan to address the fiscal position, but has not provided one himself, including providing any reliable information on the extent of annual public spending cuts he would introduce. Cameron has talked about the need for immediate cuts, but at the same time made reassurances about guaranteeing major spending departments, e.g. NHS on his recent, much publicised national poster campaign. He has also committed to overseas development aid. Only Working Families Tax Credits and Child Trust Fund have been mentioned on the fiscal credit side, as spending cuts. He has also made further commitments on the fiscal debit side on married couples tax and inheritance tax.

    These major contradictions raise fundamental questions about the realism, coherence, honesty, integrity and also economic capability of an in-coming Conservative government. "Trust" is a word that Cameron has been very fond of using.

    - So, are the budget cuts to be of the order of £1bn, £45bn, or £75bn pa?
    - If only £1bn of annual spending cuts are planned, where will tax rises be made and of what order?
    - Where and when will the public spending axe fall?
    - How will Cameron provide reassurance about the credibility of the tax and spend plans to the voters?
    - Will Cameron advocate an interest rate rise of the proportions to say 15% on Black Wednesday; recalling his earlier experience in economic crisis management?

    In view of Cameron's involvement in Black Wednesday, the electorate should ask for better than "trust me I'm Dave".

  • Comment number 60.

    52. At 1:35pm on 01 Feb 2010, the_fatcat wrote:
    46. telw wrote:
    ...and you can see the results of that policy around you: run away asset inflation and the biggest boom and bust in history.

    Question, what would have happened if American banks/funds had not rolled up their sub-prime mortgages and sold them on to our greedy bankers. What would our debt be if that had not happened.

    Anyway we're always told low interest rates were the the inheritance from the Tories, typical Coservatives something goes right take the credit, something goes wrong not me guv.

  • Comment number 61.

    @58

    Kaybraes do you actually know who Keynes is?

    Its evident your pals callme Dave and Gideon do not.

  • Comment number 62.

    I look from the Pigs (New Labour) to the Men (Tories) and see no difference.
    Let's face facts neither of them credible.
    Labour deserve to lose as the have messed up and as the Tories weren't calling for effective Financial Regulation (actually less effective) then there is no way they deserve to win this or any other General Election for that matter.
    The 2 parties cosied up to each other and voted for an illegal war which undone 8 decades of good will and cost tens of thousands of lives!
    Neither party can deal with this crisis - it will take 3 decades to sort out and we will all have to consume less.
    The party is over, the nation is asleep and in the morning we are going to have the almightiest of hangovers with not an ibuprofen in sight.

  • Comment number 63.

    Truth is the victim here! No politician can be trusted with over 300 MPs, unable to properly manage their own finances. They think they can run the country? Jokers!

    If they were honest the answer of what to do is clear, if unpalatable:

    + 2.5% increase in VAT with immediate effect
    + 3yr pay freeze for all civile servants (local and central government)
    + compulsary redundancy for 15%+ of all public servants earning over £40,000 at minimum levels or redundancy payment.
    + Immediate increase in pensionable age of all Civil Servants to 65
    + 10% reduction in MPs/Ministers salaries frozen for the life of the parliament.An end to the resettlement bonus for MPs leaving parliament fixed at £50k max.
    + Increase base income tax theshhold to £10k/person
    + End Tax credits for those earning over £30k/year
    + End Personal Pension contribution credits at the higher 40% tax rates
    + Impose Doctors/Hospital visiting fees of £5/visit - £25 for a missed
    appointment
    + End Trident and aircraft carrier investments - expensive luxuries
    + Revision of all corporate Tax loopsholes to ensure that companies pay a minimum of 30% of declared profit
    + Freedom to impose local income/sales taxes at a Parish/Country Council level
    + Minimum Alcohol duty levels to be imposed and escalated at double inflation
    + Increase in fixed penalty moving traffic fines from £60 to £250
    + Apply VAT on all Private school fees with and review other currently exempted areas
    + Increase base pay of any army fighting force to £20k/yr
    + End family allowance for 3rd and subsequent children
    + Place ceiling on benefits payment of max £4000/month

    Only by addressing the above is any party going to get the deficit down and be able to embark on getting UK working and paying its own way.

  • Comment number 64.

    Stephanie - it would be helpful to have your take on exactly where the two (possibly even 3) main parties differ on this. Given that politicians use words as loosely as their claims on expenses, it's virtually impossible for an ordinary voter to tell one from another. I realise that a delicate balance is going to have to be drawn between making the necessary cuts and not jeopardising recovery (always remembering that one person's virtuous cut in public expenditure is often another person's job). But at the moment my vote is going to go who tells me clearly and honestly what they are planning to do. (And actually it doesn't matter if there is a consensus: but let's not pretend there isn't just for political advantage. The crisis is too serious for that.)

  • Comment number 65.

    43. At 1:03pm on 01 Feb 2010, telw wrote:
    'Get your facts right... in the last year of QE pound has increased by 10% against dollar in the last year!'

    Very good point, but then the markets new QE was coming at least six months before it was announced.

    Perhaps sterling should be compared against something more tangible than another currency.

    In any event if the BOE creates money faster than private debt money is being written off, inflation is very likely to follow.

    What never ceases to surprise me though, is why 'economists' and for that matter those that report on the 'economy', have consistently reported that QE is about helping the economy, as opposed to keeping Government in funds.

  • Comment number 66.

    "Nixon famously denied he was a crook. At the weekend David Cameron denied he was a recovery-wrecker, confronting directly the argument that faster deficit reduction would jeopardise growth."


    I am truly shocked at that comparison.

    I know you will argue that a 'blog' is personal, but the fact is that this appears on the front page of the BBC website by a respected BBC correspondent.

    I used to respect Stephanie. Now I'm not so sure.

    Truly shocking.

  • Comment number 67.

    As someone who has always defended the licence fee I do unfortunately feel like other bloggers that the BBC seems to have lost some of it's impartiality and there does appear to be a leftward tilt in headlines & the content of 'articles'. I also agree with the fact that many modern interviewers seem to have little interest in what guests have to say & no ability to listen, consider & respond with appropriate questions but prefer to read from a list in an aggressive manner.

    That said my concern is that with all the focus & debate on the 'differences' in economic policy between the main parties all other issues are being ignored. Personally I do not think that whoever is elected will have much control over the economy for years to come, we are just going to have to spend less than we earn, whether it's personal finances or government finances. What is of more interest to me is Europe - personally I'm very pro European but I know amongst friends from across my social spectrum (Uni, rugby, business colleagues, staff, family & ex-colleagues) are all, on the whole, very anti-Europe. What might the impact of changing our status with respect to Europe be? Would one of the parties giving the country a chance to decide this win or lose votes? Thoughts?

  • Comment number 68.

    No PAIN No GAIN

    The banks built a growth graph skyscraper with fictional money.
    When it fell down the govt rebuilt it with borrowed money.

    But we live at ground level so we need to get from the top of the skyscraper to the ground.

    No party can explain that to an electorate and get elected.

    So the next 4 months will see lots of waffle around the subject from the two main parties who might get elected and some more direct home truths from Lib Dems and Others who won't get elected.

    Unfortunately whichever party gets in and whatever course of action is followed it is ultimately going to involve us all taking some pretty nasty medicine (medicine we should have been taking for 18 months in my opinion).

    No PAIN No GAIN.

  • Comment number 69.

    67. At 2:02pm on 01 Feb 2010, DaleyintoEurope wrote:
    As someone who has always defended the licence fee I do unfortunately feel like other bloggers that the BBC seems to have lost some of it's impartiality and there does appear to be a leftward tilt in headlines & the content of 'articles'. I also agree with the fact that many modern interviewers seem to have little interest in what guests have to say & no ability to listen, consider & respond with appropriate questions but prefer to read from a list in an aggressive manner.

    Don't agree BBC is biased, but anything that balances Murdoch's media and other right wing papers is welcome, some of the commentators on Sky are downright rude when referring to Labour officials.

  • Comment number 70.

    Regardless of the ins and outs and rights and wrongs of the economic stances of the political parties, it is astonishing that the BBC's economics editor feels it to be appropriate to describe the Tory leader as a 'recovery wrecker'- and there is no other way to interpret her juxtaposition of David Cameroon and Richard Nixon. I don't know her, and she may be a very nice women, but this total misjudgement is a 'credibility wrecker', and in an election year has to bring her suitability for such an important and sensitive media post into serious question.

  • Comment number 71.

    I agree with *66 and feel that Steph should explain the purpose, other than a grabbing headline, of making such an odious comparison. If this is her view then she should come out and state it and declare her support for the Labour Party. In which case she should resign from the BBC and sign up for labour. Or perhaps she has already!!!!

    Shame on you Steph, belive me this will not go away and has already destroyed your credibility. BBC take note, if you are at all interested in balance.

  • Comment number 72.

    68. At 2:11pm on 01 Feb 2010, GRIMUPNORTH77 wrote:
    No PAIN No GAIN

    Yes, but why is it always the lower classes who pay with pain, for the upper classes to get the gain.
    Recessions only affect the poorer in society.

  • Comment number 73.

    #69 Telw - Totally agree with your comments on Mr Murdoch - ironically he backed labour in the last few elections, but has switched again. Never read his papers & watch very little of his news channel. Unfortunately I think the BBCs reporting standards have dropped towards his rather than Sky having upped their game. We'll have to disagree on the beeb (who I still think are worth the money btw - bar Rossy & he's off).

  • Comment number 74.

    14. At 10:48am on 01 Feb 2010, the_fatcat

    The day all the bureacrats running (example) a hospital or a university cut the number of bureaucrats (themselves) rather than front line staff I'll eat my hat.

    Under the last tory government they brought in 5% year on year 'efficiency savings' for front line wards in hospitals but also brought in the 'NHS internal market' - resulting in a tripling of administrators.

    Here's a piece of information - in schools, universities and hospitals people are ALREADY planning the cuts in front line staff. The only hope that front line staff have is that it will be acheived by natural wastage not compulsory redundancies. No one in the public sector is stupid enough to think it will be the bureaucrats who will shoulder this. (...and no one is buying a new car)

  • Comment number 75.

    I note that the BBC has just put up comments from Peter Mandelson. May I suggest Steph that you encourage your colleagues to put up the comments made today by George Osborne stating that Labour is in chaos on cuts. Again seriously investigate the contradiction between what Gordon Brown states and what Alistair Darling is actually doing. This is where the real row is going on.
    As I recall David has always stated there would have to be cuts, Gordon always stated that he would and will continue to invest. Who was and is telling the truth!!!

  • Comment number 76.

    #66. hotairmail

    I think the whole lot of them are liars. I don't know why the media get so worked up everytime they expose a lie.

    Look elsewhere on this site to see Blair, Brown etc accused of lying.

    Check back on this blog to see a different lying politician exposed next week.

  • Comment number 77.

    Cuts, of course we need them. We have far too many public service jobs in this country anyway. One easy one is the closing of public sector final salary pension schemes to new joiners in April (including new MP's elected in May...) and then move from "final salary" definition for pension levels to "average career salary" for those already in these schemes. Would save billions on the UK plc balance sheet, believe me.

    Why not raise basic rate income tax for a fixed term, say five years, to help out too? It is straightforward, even-handed and a powerful message to our creditors that we will put our house in order.

  • Comment number 78.

    un believable Cameron has changed his mind again how many more different accounts of his policies will we get before the election
    hios in experience is showing at every policy turn one minute he and his jeeves osbourne expound the virtues of thatcherism and say' it would bedishonest to say there would not be cuts now he says there will not be immediate cuts,having uturned on the referendum tax cuts for the to we believe his latest spoutings or those of a couple of weeks back tax cuts for thewealthiest 2% remain his only firm policy his supporters nor his detractors knows where he stands on anything he can't carry on like that
    as more pointers show emergance from recession how misguided it would be to put those who advocate the failed monetarism of the 80s bact incharge at this junctureobama's new statesman quote about Cameron being lightweight is proved more correct every time he opens his mouth
    a cameron government would be an own goalour nation can't afford!

  • Comment number 79.

    I fail to see why this is such a story and why it has been given such a lefty spin here.
    Cameron has only said the Tory cuts will not damage the recovery. They've been saying there will be cuts for ages; long before Labour acknowledged it.

    Following the extremely low, fragile growth figures, it makes sense to to be clear that any cuts will be made in such a manner as will not damage that recovery. Labour, on the other hand, made a no cuts/cuts U-turn.

    Now, I know the BBC is left of centre (which is what you would expect from a cooperation that advertises its vacancies mainly in the Guardian) but I expect better from Stephanie than this biased spin.

  • Comment number 80.

    "As of May 1997, our central bank is supposed to be independent of the hopes or needs of any government."

    And what people have, in the main, forgotten about this is that this is what the City wanted. Less interference in the business of business. The "business-friendly" Labour Blair/Brown gave the City what it wanted. Look where that got us a decade later. Brown gave the City enough rope to hang itself and, it then hanged all of us!

  • Comment number 81.

    "I do unfortunately feel like other bloggers that the BBC seems to have lost some of it's impartiality and there does appear to be a leftward tilt in headlines & the content of 'articles'."

    I don't think it is as simple as that. It's more like a U.S./Obama tilt. After all, Dave's stance appeared previously to have shifted away from the transatlantic stance on both investment and Q.E.

  • Comment number 82.

    What is the deal here? Who cares what Labour or Tories say - their policies are the same, they are both walking with the living dead. They just use different words.

    The economy is on stimulus life support, pull the stimulus plug and the economy crashes. Therefore no one is going to pull the plug. They will wait for a sterling crisis and then blame the foreign man.

    What do you all think the deal is with selling weapons to Taiwan and surrounding Iran with high tech killing stuff.

    Richard Nixon - who was he? Remember "If Adolf Hitler flew into today they´d send a limousine anyway" - Check it out, as the world spirals out of control.

  • Comment number 83.

    43. At 1:03pm on 01 Feb 2010, telw wrote:
    ... in the last year of QE pound has increased by 10% against dollar in the last year!
    --------------------------
    Whatever happened to the comparison of the exchange rate of the pound to a "basket of currencies" that was often used in the BBC financial reporting some years ago. To the interested layman is this not more indicative than only comparison to the dollar at a time when the dollar's future worth is in doubt?
    Please note I am not asking for the pound to be compared to a basket currency, well not yet and hopefully not at all.

  • Comment number 84.

    Cameron's greatest strength is here being portrayed as his greatest weakness ......
    He is not so bound by dogma that he cannot stop and think for a moment about what is right for Britain ......
    Even if he then agrees with his opponents.
    And I am saying this a someone who has never voted Tory and never will.

    Remember the expression ...It's the Economy stupid?
    WELL HE REALISES THAT THE BEST STRATEGY FOR PUBLIC FINANCES IS LONG TERM GROWTH AND THAT MEANS WE HAVE TO HELP THIS RECESSION END ....

    AND I THINK YOU'LL FIND THAT UK GILTS WILL BE FINE WHOEVER IS IN POWER.

    There is absolutely no need for this Beeb Gilt hysteria.

    Never thought I would be defending the Tories, but there you are!

    SO GORDON TAKE NOTE :
    YOU CAN CHANGE DIRECTION SOMETIMES,
    AND ALTHOUGH THE MEDIA PILLORY YOU FOR IT,
    .......THE RIGHT THING TO DO IS THE RIGHT THING TO DO.

    And that means:
    Joining the Euro,
    Getting out of Iraq,
    And Afghanistan,
    Remaining friends with USA but not as a lapdog,
    And showing a bit of humility and regret, when you take the stand at Chilcot Inquiry.
    WE ALL KNOW IT WAS A TERRIBLE IDEA TO GET INTO THIS MESS,
    WE JUST NEED TO ADMIT IT AND GET OUT OF IT.

  • Comment number 85.

    On David camerons second point, the lack of consumer confidence is being fuelled by his and his party's constant talking down of our economy and nation in general. We need consensus on economic policy not division or point scoring.

  • Comment number 86.

    66. At 2:00pm on 01 Feb 2010, hotairmail wrote:
    "Nixon famously denied he was a crook. At the weekend David Cameron denied he was a recovery-wrecker, confronting directly the argument that faster deficit reduction would jeopardise growth."
    'I am truly shocked at that comparison'

    I'm not shocked, but I think that it was poorly done, poorly done indeed Ms Flanders.
    It’s a tenuous link at best, and lacks even a modicum of reasonableness.

  • Comment number 87.

    To all bias claimers,

    This is not bias, it is a quote used in a specific context which is made clear within the piece. A touch obscure and requiring of some background knowledge so perhaps not the best choice for blog boards but I find it rather nice to have a journalist treat their readers as if they were intelligent people rather than simpletons. The original interviewer was far more obviously slanting one direction, Sopel is getting rather poor these days.

    The apposite lines from the piece are:

    "For months, I've been wondering why Messrs Cameron and Osborne hadn't made more effort to dispel the idea that they would put deficit reduction before economic growth."

    "In their[conservative strategists] response they have often adopted the slightly patronising tone of the professional political operative talking to a naif. That would sound hopelessly defensive, they would explain - and risked giving the opposing argument more weight. Like Nixon saying "I am not a crook"."

    Nixon made the famous quote at the time when he was beginning to be directly related to the Watergate cover-up but pointedly only claimed not to be a financial crook, basically - it ends "I earned everything I have". I.e. he denied a charge which had not actually been levelled at him (but were the end of his first VP Spiro Agnew)and ignored those that had been.
    It left a clear inference for those who beleived he was a wrong'un - if he isn't a financial crook then he must be guilty of the other stuff because he didn't deny that.

    The quote is not an exemplar for a politician lying - that is the silly simplistic reading and I am sure no one made that mistake.

    It is clear that DC and GO have been happy to give the impression of being prepared to cut hard and cut early because that had a certain resonance not least with core Tory support and some general sentiment. Now it becomes clearer that such a course of action would be potentially disasterous they have to break the association that has built that this was their plan even if they had never said it was, which as Stepahnie points out they never had (they have said remarkably little).

    So the allusion is very clear at least to me:

    Having denied being "swingeing cutters" what sort of cutters are they?
    The piece points the way - the clear blue water they seemed to want to project is actually far narrower and not blue at all. Pragmatic not ideologues which is a better position in my view than their previous position.
    The Dark Lord has a plan and so far Osborne and Cameron seem to be following it. They really need to do better.

  • Comment number 88.

    With reference to my comments #19 and #31 which contained official complaint at bias of this blog.

    Not had phone call or e-mail yet. So as a contributor to what's left the UK economy here's an official 'putting my money where my mouth is'.

    BBC - please take note my TV license quarterly direct debit is due shortly. I've just cancelled it.

    Sort it out. I've complained re BBC bias on more than one occasion. You've taken no action so I'm taking direct action. Is that clear?

    I hope that it's crystal. (And I shall continue to contribute to these blogs).

    But don't think of sending your 'thugs' round. Remember reasonable force can be used....

    Anybody else had enough?

  • Comment number 89.

    Steph,
    Do Labour tell the BBC what they can and cannot report now?

    In recent months the BBC has tried to put a positive spin on anything to do with house price figures. Today the B of E announced that mortgage approvals fell in December for the first time in 13 months. I cannot find this article on the BBC website and haven't heard it on the BBC news.

    Have the BBC been instructed "Good news only before the election"?

  • Comment number 90.

    #85 epochery

    Stop talking b******s. Another one who follows Mandelson's comments hook line and sinker. And another who is the half as mentioned in #19...

    Very sad.

  • Comment number 91.

    The headline says it all really .... what's the point in taking the views/opinion expressed in the article seriously when there is such a strong political sub-text ?

  • Comment number 92.

    I don't think we are quite out of the myre yet. The economy hasn't recovered substatially by any means though any hope is welcome right now certainly Gordon has tried to bring about recovery and has done well.

    Jobs are still difficult to find though. I think whoever gets into power will have a hard job in the coming days, to get things right.
    I dont think David is being unrealistic either, the deficit will need to go down, and i am sure that he has the accumen to make the correct plan to sort out the Economy.
    The fact is whatever people say about the economy we are still in very bad shape. This is the longest i have personally been unemployed, since i graduated.
    There is going to be changes whoever gets in we are not out of the woods yet anyone who thinks so is silly. You can see this by the responses you get when applying for jobs, taking to the agencies and by looking at the real suffering out there.

    I will say this the sooner the Election is out of the way we will have to get behind those in power to get things moving.

    The Economy needs to recover and it needs to be a sustained recovery.

  • Comment number 93.

    #87 Whistling Neil

    I see why you chose 'Whistling' in your pseudonym.......

    Your defence brings 'preposterous' to mind. You should google 'Nixon and preposterous'.

    The referenced article linked seems to have quite a resounding 'leader' parallel with a certain Gordon Brown. Pity Steph couldn't find this 'obscure reference' as well since it has more resonance than the rubbish written as the leader on this blog......

  • Comment number 94.

    I wish everyone would stop being so silly by having a go at Stephanie's article. Admittedly the Nixon comparison is a tad naughty, but the article itself is almost Pro-Cameron.
    And why on earth does everyone seem to think cutting public sector pay is a good idea. I worked for the DWP for several years and the average wage for my colleagues and myself was £16k! For some unknown reason people seem to assume that civil servants are paid vast sums of money: Sorry, that's simply not true.

  • Comment number 95.

    This is the 1980s all over again. The Tory promise THEN was that they would NOT 'double VAT' as rumour had it, nor put up other taxes. Instead they 'only' increased VAT from 8% to 15% (so only up 88% - not doubled) and they put up beer duty by over 30% whilst cutting NIC benefits for the poorest.
    The consequence was soaring unemployment, record government deficits as entitlement payments rocketed upwards and a six percent drop in national income as businesses went bankrupt at a time when North sea oil was just beginning to pay vast sums into HM Treasury. Interest rates soared to 17% as money supply ran out-of-control and hundreds of thousands of homes were repossessed.
    Cameron knows about those calculated inexactitudes because he was an Eton school-boy and later Oxford student during those nightmare years. Eventually he became an advisor (!) to Chancellor Norman Lamont who claimed that unemployment was a price worth paying. Many many millions paid that unnecessary price in the Tory eighties, but he didn't.
    So we've been warned. Taxes on low income families will rise whatever he dissembles and so will unemployment, bankruptcies, debts and repossessions. They don't learn but we do!

  • Comment number 96.

    Selective amnesia seems to have taken hold. The Conservatives were talking about the need to reduce Government debt when Gordon Brown was bashing on about 'Labour investment versus Tory cuts.' Moreover the Conservatives gave some indications at their Party conference where curtailment might be expected. The electorate knows that whoever wins the election expenditure cuts and tax rises are on the way. As for Bank of England independence on interest rates this is not written in tablets of stone. They will be busy with additional regulatory supervision after May 6.

  • Comment number 97.

    #3 Saitleo - Your memory is quite short on the politics of fear. The Tories played on voters' fears of nuclear war during the cold war in the 1980's, asylum seekers throughout the 2000's, they even tentatively made noises in the media in support of MMR opponents' claims about risks of autism, when first published. They failed to warn adequately, or react to voter's concerns caused by BSE infected beef, Mrs Thatcher even allowed exports of infected material, after domestic controls were introduced. Why have you forgotten the Tories' "Demon Eyes" election poster of Tony Blair?

    #19 rugbyprof (as well as the above #3 & #21). The 1979 election poster of a dole queue with a "Labour's Not Working" slogan played on the electorate's fears of losing their jobs. The result under the following Tory administration was the largest recession since the 1930's, with the highest ever recorded number of unemployed (+3m for first time ever) and endless schemes designed to reduce the recorded numbers of unemployed. Coal, iron, steel, ship-building and manufacturing industry were decimated. You are right to question the increase in reliance on public sector employment, but you should question the causes of the manufacturing decline, which long pre-dates 1997. It is that decline that has forced this employment transfer to the public sector. Source of the causes of what is recklessly termed "Broken Britain" today, anybody?

    Professor, if your knowledge of rugby is as good as economics, history and politics, you are also advising the reinstatement of Ron Waldron as Wales coach, are you?

    #7 TheWalrus999 - questions the source of suggestions about "Swingeing cuts". Try the ConservativeIntelligence's Tory conference in Westminster on 19th January 2010, Lord Forsyth, who earlier undertook a review of tax policy for Cameron said "On the crisis, overall it seems to me that we need to be able to reduce the overall level of public expenditure over a parliament by about £75bn." This was later confirmed as an annual total.

    George Osborne, has said that the Tories would start cutting the fiscal deficit sooner than Labour, though refused figures. He thinks the split between tax increases and public spending cuts should be around 20/80. According to analysts this means spending cuts of at least £46bn annually within 3 years. Whilst Osborne has not named this figure, it is not unreasonable to do the maths for him, if he cannot or refuses to.

    #17- #22 - Torypartycampaigners. The suggestion from Stephanie's article above is that Tory Party strategists have advised "Trust me, I'm Dave" to avoid saying "I am not a recovery wrecker" or anything along those lines, for fear of the opposite truism becoming the story. The implication of the line about Nixon is that this comparison came from the people at Tory HQ, with whom Stephanie had been in touch to ensure that allegations of bias could not be made successfully and that their view be accurately represented.

    As regards political balance, there has been plenty of challenge and criticism of the government/Labour Party proposals in the PBR elsewhere on these pages at the time when they have been in the news. Stephanie can hardly be called a Labour supporter. Does anybody remember the Gordax Index on Newsnight? That came across as far more personally and politically challenging and critical of Gordon Brown personally and to the government than any of the above comments about the Tory Party could ever be. The Gordax Index was amusing.

    These comments are just more paranoia and Tory Party activist obsessed fixation with alleged BBC political bias.

    The job of journalists is to challenge and question politicians of all political persuasions, especially when they relate to economics. Those policy prescriptions will be a crucial part of any future government's major priorities and potentially affect all of us after a General Election this year. Mr Cameron is prepared to offer detailed policy on prison numbers; the introduction of prison ships, or use of force for have a go home owners. There is every reason for him to be challenged to offer the same detail about major policy areas, especially when as important as the economy; tax, spending and interest rates. If journalists from other new outlets fail to do this then they are in dereliction of duty and of their own broadcasting impartiality obligations.

  • Comment number 98.

    I no longer trust the BBC. The initials might as well stand for the Blair Brown Broadcasting Corporation as far as I'm concerned. If I want to know about the real state of the British Economy I will read The Times newspaper. Of course you will not print this as I am an unemployed ex-working class, white man from Stoke-on-Trent. Being a second-class citizen from north of Watford means I don't count doesn't it?
    Why don't you get out of your fake multi-cultural paradise of London and check out the reality of Britain?
    I also notice the takeover by women of news presentation etc. Gender bias? Now apparently, the highest earners and the "real" breadwinners in 20% of families are women. Doing what jobs exactly? Public Sector, Cosy Office Jobs, Finance perhaps? Of course. Nasty, dirty industry - not a chance! I see more divorce and unrest ahead and not just in the economic sense. Still, nothing for you to worry about Stephanie, you can always have a cosy chat with Sophie or Fiona in the studio.

  • Comment number 99.

    People, try to understand; The bias of the BBC is altogether more insidious than you seem to realise.

    The BBC couldn´t care less whether the next government is formed by Labour or Tories or by a combination. They could care a great deal that the population sits at home with a metophorical bucket on its head.

    The Prime Minister of the UK has deployed anti terror legislation against Iceland effectively accusing its government of being a terrorist organisation. The leader of the Opposition is not exactly vocal in his opinion as to whether Iceland is a terrorist state - and what kind of terrorist activities it may have engaged in.

    This is the kind of stuff that the BBC is desperate to avoid from becoming "newsworthy" - because if it did people may start to question the sanity of the political classes.

    Oooh - who has a nicer smile Brown or Cameron? Look at their smiles, but don´t ever look at Lloyd Blankfein making off with a mere $100 million bonus payment. Think about it: What kind of person can possibly need or deserve $100 million for 12 months work?

    As long as you keep the bucket on your head the BBC will continue unimpeded with writing about nonsense subjects. It is as much your fault as the fault of the BBC - it reflects your own delusions.

  • Comment number 100.

    Making a comparison with Nixon - a proven liar - is nothing short of tabloid journalism.

    If you counted up the number of lies Gordon Brown has delivered over the past 13 years, Nixon would have all the innocence of a newborn in comparison.

 

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