A postcard to the Westminster village

 

Dear all,

Been away from SW1 for a few days. Missed so much - Britain getting even deeper into recession (unless, that is, the figures turn out to be wrong), George being replaced as chancellor by Vince (unless, that is, he replaces Nick as leader), Ed teaming up with Francois in Paris (unless, that is, it's on tax, since they disagree about the top rate and the financial transaction tax).

After a week watching, listening and thinking but not reporting, everything looks a little bit clearer than it did. I am struck that, once again, conventional wisdom (CW) is as wrong as it so often is.

CW now has it that Cameron is pondering whether to sack his chancellor who is "under more pressure than ever before", the Coalition is falling apart and Ed Miliband should be measuring the curtains as he prepares to move into Number 10.

The reality is that the prime minister is as likely to appoint David Beckham as chancellor as some of the candidates I've heard suggested.

George Osborne George Osborne doesn't know what pressure is...

As for the pressure George Osborne is said to be under, it would have seemed nothing to former residents of Number 11.

Callaghan battled in vain to stop devaluation; Healey tried to take on the unions and ended up making a humiliating journey to the IMF; Howe's policies produced, at first, soaring inflation, interest rates and unemployment and a call to change course by 365 economists; Lawson became locked in a battle with Margaret Thatcher over the fundamentals of economic policy; Lamont presided over the ejection of the pound from the ERM, interest rates of 15% and the defeat in the Commons of his Budget tax plans whilst Darling faced the credit crunch, bank collapses, the 10p tax debacle etc...

Crucially and surprisingly, there is no split in the Coalition on its economic strategy. Vince Cable has not called in private or in public for a new approach although if he were chancellor he would be bolder with investment plans and with the banks who are still failing to deliver credit.

Finally, I struggle to detect much momentum for an alternative economic strategy.

Yes, the IMF says the government should consider changing course but the organisation's head backs the chancellor.

Yes, the deputy head of the OECD says it's time for a new approach but his boss does a better job of advocating Coalition policy than any minister has.

Yes, business groups are growing increasingly impatient of ministerial promises of easier credit, greater investment and a new airport tomorrow but never today. Yes, the Tory right lobby for a return to the reassuring certainties of the Thatcher era - tax cuts, deregulation and new laws to restrict the unions - but there is no powerful faction in the Cabinet or on the right which looks capable of forcing a change in approach.

Ed Miliband Ed Miliband was said to be finished - not any more

Yet, despite all this, this is a moment of real political danger for the government. Something real has changed since the last long Westminster break in the run up to Christmas.

Do you remember what CW was saying then? Ed Miliband was said to be finished and unelectable and the subject of muttering, if not, plots in the Labour Party. Not any more.

It's not just that the Labour leader has successfully exploited the government's difficulties, grown in confidence and silenced the doubters. It is, quite simply, that the economy has not performed as the government predicted it would. It is the numbers, stupid - falling GDP and rising borrowing - combined with a loss of ministerial competence - all those U-turns - which have spooked the electorate.

The Coalition has now lost the benefit of the doubt on its central purpose. Voters are remembering that Gordon Brown, never mind the two Eds, warned that cutting too far and too fast might kill recovery.

Labour has re-gained the opportunity of a hearing when it spells out what it would do differently. At the same time there is the danger that any slip will be pounced on as evidence that the party is not ready to govern again.

The Conservatives and the Liberal Democrats could lose it if they look more interested in talking to themselves than talking to the country about what they're going to do.

Starting this Autumn Ed Miliband must decide whether the country simply wants reassurance that Labour can be trusted again or whether the electorate is ready to embrace real change.

The Conservatives must choose between simply seeking to regain their reputation for competence or building a prospectus - on Europe, immigration and human rights - for what they would do if allowed to govern alone.

The Lib Dems must decide whether they can differentiate themselves from the Tories whilst still making a success of the coalition.

It is all to play for. Once the summer's Games are over, the political games will begin.

PS

I am taking a summer break from regular blogging but will be back in September. Tweets will continue from time to time but the hashtag #corr allows me to tweet musings and irrelevances which do not get automatically copied onto this page/

 
Nick Robinson, Political editor Article written by Nick Robinson Nick Robinson Political editor

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  • rate this
    +5

    Comment number 45.

    "Ozy is the quiet man of the Tories, he never gets ruffled he gets on with his job"

    Yeah? Which job's that, then? (Inept, useless) part-time Chancellor, part-time Tory strategist, or full-time liner of his paymasters' pockets?

    Come out from whatever rock you're living under, Ray, and see what the Real World looks like: Osborne is an incompetent, idealogically-driven disaster for the UK.

  • rate this
    -2

    Comment number 44.

    37.
    John_from_Hendon
    More
    Evidence that China investing heavily in Africa using depreciating $US for purchase. Makes sense to dump their huge holding of falling value dollars.
    UK & Europe need major disconnect from US ideology of creating conditions for war to satisfy US Military industrial complex.

  • rate this
    -2

    Comment number 43.

    37.
    John_from_Hendon
    More
    Reason for exclusion of USA Economy based on total fiat money mortgaged into the future with no desire to change filed system.
    Rest of the world need to reset and refuse $US as preferred currency.
    Why should rest of world pay for commodities which benefit failing US economy by 8-10% in real terms. Oil to be paid for in purchasers currency, same for other commodities.

  • rate this
    -1

    Comment number 42.

    37.
    John_from_Hendon
    I agree with you but the real reason is none of them have the guts to do so because of vested interests. It will take international agreement excluding the US if necessary, to fix the debt bubble. Forensic examination of debt created out of fiat money & discount the debt to 1%. Nationalise the banks,return issue of currency to national governments , real recovery 3 to 5 years

  • rate this
    +5

    Comment number 41.

    3.
    Dan_Dover
    10 Hours ago

    Vince Cable has a degree and PhD in economics, and used to be chief economist at Shell. George Osborne used to fold towels in Selfridges.
    That's not fair on George, folding towels was way above his intelligence level. Brush and shovel with diagrams would be more appropriate and he would be well within his comfort zone.

  • rate this
    +4

    Comment number 40.

    I thought Nick had taken a break from regular blogging full stop , until September will be one of the shorter ones recently.

  • rate this
    +4

    Comment number 39.

    #37

    Yes, it will take a while to sort out this double dip. Labours downturn occuring during a global recession, the tories digging us in deeper whilst countries like the US continue to grow their way out.

    .... but 2015 will save us from the tories making it steadily worse.

  • rate this
    -5

    Comment number 38.

    Nick have nice break, while your away look at facts of life, the Edless Chicken is still clucking around the yard & never will have any sort of middle of the road policies that would appeal to middle England. Nick hes as left wing as Unite, but you cant just see it can you. Ozy is the quiet man of the Tories, he never gets ruffled he gets on with his job

  • rate this
    +2

    Comment number 37.

    10. jon112dk "Only 2015 can save us from these clowns."

    Sadly you are mistaken.

    The Depression will in all probability go on until 2030, because none of our politicians understand enough basic economics to fix the debt bubble any quicker. (It can be done but not by any of the present gang of clowns!)

  • rate this
    -5

    Comment number 36.

    The left wing press and BBC are still hung up on the altar of growth which got the country into this mess. Millipede can never escape this. Why do you swallow hook line and sinker the doggy statistics from the ONS without question whilst ignoring reality such as the creation of 200,000 new jobs in the last quarter. We expect impartiality and proper analysis from the BBC.

  • rate this
    +6

    Comment number 35.

    #22 BB
    'Osborne was worried about state of economy & said the economy has “deep-rooted issues”'

    Which is a none too subtle code for 'it was all Labour's fault', which has now become passé and has to be repackaged.

  • rate this
    +1

    Comment number 34.

    #28

    1.2% growth in Q2 2010 - purely and simply the upturn after a global recession, no skill needed by labour.

    If you want to think it was an illusion, feel free.

    But this is a very real collapse under the tories.


    Tories: taking labours mess and making it worse.

  • rate this
    0

    Comment number 33.

    #24saga
    “pledging to leave/curtail/abolish the EU/immigration/human rights won't win them a GE”

    The horse had bolted with immigration (re waiving Eastern Europe quota) & the Tories are hindering the economy (re FDI) now with nonsensical limits

    However, the ECHR is not popular with the electorate (including core Labour voters) & the EU could also become increasingly toxic!?

  • rate this
    +3

    Comment number 32.

    The Root cause of the UK’s problems is that banks & consumers are massively overleveraged. Whenever & wherever that has occurred it has taken years to correct. GO hoped to generate growth via manufactured exports but the EZ crisis has choked global demand. Halting cuts to public sector jobs will resolve nothing. The only way forward is aggressive investment in infrastructure as history proves

  • rate this
    +2

    Comment number 31.

    Crisis has brought
    - one bright, blinking RED light: Do not trust your financial sector - if & until investment banking has been split off from retail banking +
    - one bright ORANGE light: Despite overseas earnings, Britain has persistent balance of payments deficit (Country is not exporting enough).
    Britain will very soon, like is Anglo/American Cousin, US, no longer be seen as safe haven.

  • rate this
    +1

    Comment number 30.

    The IMF and OECD firmly backed Alaister Dariling's (completely different) deficit reduction plans as well .

    They also backed the economic policies of both Prime Minister Blair and Brown.

    It really means little. The IMF in particular are a political body, funded by governments, who generally stand up for the government of the day.

  • rate this
    +1

    Comment number 29.

    Why Britain should be afraid:
    1.public & commercial services work poorly
    2.average person is becoming poorer & POORER
    3.economy is poor, shapeless blob
    4.gov't is hopelessly poor (dysfunctional) &
    5.George is persistent.

  • rate this
    -5

    Comment number 28.

    jon112dk, the Tories didn't inherit growth, they inherited the illusion of growth underpinned by money ploughed in by a desperate government seeking re-election. It was never sustainable.

  • rate this
    -1

    Comment number 27.

    I find it incredible that people think there are easy answers to growth. The government could borrow loads and use this to stimulate an artificial growth. And then what? This is effectively the approach carried out for a decade. Borrow money, setup PFI, encourage people to top up their credit cards, encourage to re-mortgage. And then POP! Any fool (as GB confirmed) can create false growth.

  • rate this
    +2

    Comment number 26.

    Number of reasons thrown at canvass from an extra day’s holiday to EU crisis, but nothing seems to stick & reasoning will likely change tomorrow. Economy is leaving more & more Brits wondering "What happened to my money?" BoE may chose to provide even further stimulus (which will place country further into debt). George is sticking to his guns - no change to austerity.

 

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