In response to BULS….

The former Chair of BULS and my great personal friend John Ritchie, has published a post entitled ‘Lies, damned lies and Tory Rhetoric’. In a nut shell the post savages what he percieves as the Tory ‘rhetoric’ surrounding Labours handling of the economy. Therefore I believe it is time to set the record straight on the Tory view of New Labours economic record.

We are all aware that the seeds of change in the Labour party were sown in the early 1990’s. In all intents and purposes traditional Labour was terminally ill and Labour leaders made it their mission to rid themselves of their percieved economic incompetence. Therefore John Smith, Tony Blair and Gordon Brown embarked on their “prawn cocktail offensive” in the City with the intention of expunging Labour’s richly deserved reputation for fiscal ineptitude.

How did they do it? They ditched socialism forever and embraced Thatcherism, at least in economic terms. It is true by doing this the electorate were presented with a fresh and viable alternative to the unpopular Tories. The only strength the Tories were percieved to have at the time was in their economic reputation which itself was slowly crumbling away and by proposing to follow Conservative spending plans and adopt Conservative economic principles Labour had encroached on the last refuge of a desperate Tory: the economy.

Blair attributed Major’s humiliation in 1997 not to a failure of policy, but to the natural ending of a political cycle, to a leadership which had degenerated into sleaze and indiscipline rather than economic incompetence. It is to the great credit of the New Labour leadership that they had the strength of character to refuse to bow to the rank and file of their party who wanted to roll back the frontiers of the Thatcher revolution. They shrewedly recognised that Thatchers neo-liberal economic revolution could not, and more importantly, should not be undone because it had provided unprecedented economic strength and stability. The provided the condition for the economic growth under the Conservatives to continue. Therein lies their economic competence.

This is how Labour built its legacy as economically competent. They extended the Thatcher reforms in to areas that even she had dared not go. They had seemingly ditched forever the slap dash, tax and spend policies that had characterised all previous Labour governments and embraced the key tenants of Thatcherism. Private ownership became preferrable to state, profits were a good thing and the union legislation enforced by Thatcher would not be reversed, despite recieving almost all their funding from unions (gratitude for you!)

Despite all the rhetoric from Labour rank and file of inheriting a mess from the Conservatives, New Labour actually inherited a very strong economy with inflation and rates dropping steadily since the early 1990s. Yet despite this health and all indications that this was set to continue for a long time to come, 10 years later we now find ourselves in a very serious financial situation with every taxpayer now owning (whether we like it or not) a bank and billions in national debts on top of the normal national debt.

The facts are indisputable. Despite the current rumblings, the UK’s period of continuous economic growth, which started under the Conservatives in 1994, means that by 2009 we will have enjoyed 15 years of continuous, unbroken growth, the longest period since records began. Yet despite this prolonged economic growth by 2009, by the governments own estimates, we will also have a national debt amounting, to some £550 billion pounds. This tells us all we need to know about Labours economic competence, despite the presence of a Conservative led boom Labour still can’t balance their books.

If they can’t balance the books when the money is growing on trees then they’re never going to be able to do it. Gordon Brown and New Labour have lived off the Conservative economic legacy. Their ‘achievements’ have only been made possible by sticking to and advancing Conservative spending plans. In times of economic strength war chests should be made for the inevitable bust that follows, the same bust that Brown naievely pledged to have eliminiated. Iron Chancellor Brown failed to provide a war chest. 

Now we, and he, face the consequences of his woeful inadequacies as Chancellor. Despite all their promises they taxed, they spent. Once Labour always Labour. Now I’m not saying Labour didn’t use that money to make good changes and investment in certain areas, they did. However I fail to see how this makes them economically competent when we now hit a bump in the road ansd there is almost nothing left to spend.

The pound in your pocket makes and breaks governments. In times of economic stability it is fair to say that incumbent governments are likely to be re-elected, however if the pound in your pocket feels that bit lighter a government is on very shakey ground. That is what is happening now and that is why Labour will lose the next election. Labour have been economically competent (at least by traditional Labour standards) in having the common sense to adopt Thatcherite economics. The problem is they don’t quite understand Thatcherite economics. Instead of saving they have squandered. Despite their pledge to have elimated the boom and bust cycle forever we are now heading for a bust and Labour will find itself out in the cold with the reputation it so richly deserves: economically incompetent.

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25 thoughts on “In response to BULS….

  1. There’s little of merit re Labour’s handling of the economy. Compared to most countries we’ve been going backwards since Labour got in. Falling (and derisory) disposable incomes and personal debt of £1.4 trillion – just as we enter hard times. For all their right-wing rhetoric on the economy, their left-wing implementation has failed us and will result in a terribly hard landing.

  2. However, even if the government had accumulated more during years of growth, it wouldn’t be much use to us now. Inflation prevents the government from spending its way out of recession. Any injection of public spending to stimulate the economy would contradict the efforts of the Bank of England to keep inflation down.

  3. Also, in the interest of balance, some of the economic factors are not the government’s fault. They were left with little option over Northern Rock, although the sale could have been handled better.

  4. First let me say that it’s curious that you have decided to attack Mr Ritchie’s post here and not on the BULS blog. I am however more than happy to chat about these issues here as anywhere else.

    After flannelling around in the first couple of paragraphs with vague generalisations you bemoan a national debt that may stand at £550 bn. You ignore the fact that the last Tory government increased the national debt in pure numerical terms and that the debt/GDP ratio is what matters. According to these predictions we will be looking at a GDP debt ratio that is much the same as it was in 1997. To put it simply, it doesn’t matter if your overdraft grows provided that your income has grown as well. In percentage terms, things were worse in 1997 than 1979 despite your flimsy rehtoric to contrary.

    You then claim that brown failed to provide a war chest, but in fact Brown paid off more debt in one year than the Tories paid off in 18 years of government. And as has been explained on the BULS blog the deficit now is around 3% of GDP: in 1993 it was more like 8%.

    Not content with these myths you go further and suggest that a strong economy leads to the government being re-elected. The economy was much stronger in 1997 than it was in 1992 and these elections debunk this myth. Infact since the war the only governments to go into an election with a budget surplus were labour governments. One had its majority cut to almost nothing, the other was voted out on a massive swing. (1950 and 1970).

    You talk of the need to produce surplusses in good times but ignore the fact that the Tories didn’t even plan for surpluses during the Lawson boom and it was left to Norman Lamont to raise taxes in order to clear up the Thatcherite wreakage.

    PT, personnal debt doubled between 1980 and 1988. The key difference here is that people are not paying interest rates of 15% while facing redundency on a cataclismic scale.

    Dan, you say that Labour does not understand Thatcherite economics but it appears that you don’t understand Thatcherite economics in the slightest. Truth be told, you don’t understand economics at all.

  5. First off Im going to deal with thsi: ‘The economy was much stronger in 1997 than it was in 1992’ yes but there were a plethora of other reasons to oust the Tories in 1997 Jack as well as reasons to reluctantly keep them in in 1992. As a general rule it is the economy which is a deciding factor in elections although of course other factors have to be taken in to consideration.

    In regards to the economy im not going to go through the conservatives economic record over the past 60 years because as far as I am concerned the facts speak for themselves. The policies we advocated in the 1980’s are now accepted as the norm and as a general rule we are seen as the party that has delivered economic growth, not Labour.

    What I will say however is that almost all academics and economists confirm that the Conservatives more than any other set the economy free despite initial difficulties.
    Under Thatcher the sale of council houses, the encouragement of privatisation, the shift from manufacturing to services, the slashing of taxes and public spending, the increased flexibility in the labour markets, the restrictions on power of trade unions, the tougher approach to welfare claimants all helped foster a strong and stable economy which Labour have lived off.

    In regards to my understanding of economics, you are right to a degree. No I’m not a economic boffin, I do not spend my life in books getting aroused over Norman Lamonts economic policies however like most people I judge the economy on the pound in the pocket. I think you’ll find that for most people, “the economy” is a pretty nebulous and vague concept.

    Most people care about their own prosperity, and that of their families. The economies of countries such as India are doing rather well on paper, yet a large number of Indian citizens are living lives that would have appalled Dickens over a century ago. So whos right? The papers that say India is booming? or the peasants who beg for their evening meal? Facts and statistics say what the authors want them to say. For every statistic you produce saying the economy was doing badly under the Conservatives I could produce another that contradicts you.

    The fact is people have no confidence in New Labours economic record because in real terms this is the first economic test they have had and they are making a hash of it. Even if you are right about the Conservative economic legacy, which you aren’t, but say you are… does that make it okay for Labour to be making the same mistakes?

    Labour are fooling themselves if they think the Tory’s past economic failures are going to save them, theyve made enough mistakes of their own to be judged on. The Conservative analysis is that this over-controlling New Labour government is not only disastrously unpopular, its nanny state controlling approach is also one of the key reasons why, despite all its spending, Labour has failed to achieve its goals. Endless supervision has been an expensive distraction, and has sapped energy and morale out of public life.

    The Conservatives seem to be doing to Labour what they did to us in 1997. ‘Taking our clothes’. We have committed ourselves to following Labour’s spending plans for the first two years, and even after that taxes will shrink slightly, but only as the economy grows. The consequence of this shift is that Labour are fooling themselves even further if they believe that on their traditional, touchstone issues, they can still market themselves as the sole occupants of the moral and economic high ground. Their own patchy record on rising inequality and social immobility – not to mention 10p tax – means that they’ve lost their automatic claim to be the party that delivers better lives for the poor.

    Throw as many statistics as you like at us Jack, bury your head in as many books but at the next general election people will be judging Labours economic record not the Conservatives. The belief is that Labour has failed to deliver in economic terms and the pound in peoples pockets are getting lighter and times are getting tougher. As PT states this is only the beginning of the economic hardships that have arisen out of Labours economic incompetence and as things do get worse the Tories majority increases.

  6. “As a general rule it is the economy which is a deciding factor in elections…”

    Well it’s not just 1992 and 1997 that contradict you, 1970, 1983 and 1951 also buck the trend. Infact there is no trend. You’re just regergitating hopeless cliches.

    “In regards to the economy im not going to go through the conservatives economic record over the past 60 years because as far as I am concerned the facts speak for themselves.”

    Dan, you don’t know the facts and you don’t want to go over the record because you can’t.

    The policies that you advocated in the 1980s included the farce of monetarism and ideas that were thrown out of the window at the lastelection; infact even Milton friedman has backed down on a number of his claims.

    “…“the economy” is a pretty nebulous and vague concept.” I thought you said it was the main factor in general elections.

    “Most people care about their own prosperity, and that of their families.”

    That’s why economic growth, unemployment, inflation and taxation are important issues. Issues that you have very little understanding of.

    Your comment on India is very strange. They have a much lower GDP per capita than we do and no one has claimed otherwise.

    Dan I don’t get aroused by Lamont’s policies but I do try to understand these issues. Lets not talk about what gets either of us aroused but instead discuss the facts ok?

    Your most serious mistake reveals your complete ignorance of these issues. the tories did not slash taxes and they did not slash spending. That’s a fact acknowledged by anyone with the slightest understanding of this. The IFS agrees, the IMF and Nigel Lawson.

    Labour is not making the mistakes the tories made despite you wanting to repeat those mistakes.

    “What I will say however is that almost all academics and economists confirm that the Conservatives more than any other set the economy free ”

    What does that mean exactly? You accuse me of talking about vague concepts and then come out with vacuos phrases like that.

    “I could produce another that contradicts you.” -But you can’t, and you don’t and you haven’t.

    “this is the first economic test they have had” No we had a world economic slow down job losses in Germany and America and Japan was heading for debt at 90% (!)of GDP in 2005. We also saw a more than 100% rise in oil prices and 50% rise in industrial material prices between 1997 and 2005. Under any other government, this would have lead to a surge in inflation or a recession. But under GB we remained strong.

    Times are getting tougher across the world. the question remains: what can the Tories offer? Nothing apparently.

  7. Interesting that Dan fails to defend half your original claims and instead moves on to something else.

  8. In 1979 a large number of senior politicians had come to believe that the best any government could hope for was the orderly management of national decline. Thatcher reversed this.

    Economist Irwin Stelzer did an excellent survey of the conservative legacy under Thatcher in the Spring 1992 issue of The Public Interest. He went to pains to explain what pre-Thatcher Britain was like. For only by knowing the historical, political, and economic circumstances of the time can we really appreciate the changes Mrs. Thatcher wrought.

    WWII had a devastating impact on us. The post war consensus and the establishment of a welfare state had a cripling effect on British competetiveness and productivity. During the 1950s and 1960s, we had settled in to the idea that the country was in decline and that nothing could be done about it. The principal job of Britain’s leaders, both under the Conservatives and Labour, was to manage the decline so that it was not too disruptive. This often involved caving-in to labor-union demands to preserve uneconomic jobs in obsolete industries at pay levels far above those justified by productivity.

    To keep the system operating required huge government subsidies, paid for with budget deficits that were monetized by the central bank. This led to high inflation, and inflation exacerbated problems with the tax system by pushing almost everyone into tax brackets once reserved for the wealthy. When Thatcher took over in 1979 the basic tax rate was 33 percent and the top rate went as high as 98 percent — 83 percent on wages and an additional 15 percent surcharge on so-called unearned income

    On May 4, 1979 she quickly set about implementing her monetarist reform agenda. Just one month later, the basic rate of taxation was cut from 33 percent to 30 percent and the top rate on wages went down from 83 percent to 60 percent. In subsequent years, the basic rate was reduced to 25 percent and the top rate lowered to 40 percent. These arent opinions but economic fact support by economists such as Friedman and Stelzer.

    Under Thatcher and the Conservatives Britain’s unproductive nationalized industries were sold off to the general public, making many of them shareholders for the first time. The nation’s extensive council housing was sold to tenants, making many of them homeowners for the first time. After a series of bitter encounters, the unions were finally tamed. The result was a rejuvenation of the economy, the restoration of an enterprise culture, and the end of talk about British decline.

    “Thatcherism” (whatever, precisely, that may mean) has triumphed to such an extent that the paradigms of the economic debate have changed, you as an économics boffin’ should be aware of this. Even Labour now make ready concessions to the merits of a market economy and of wealth-creation. Whereas a few years ago 364 professional economist put their names to a haughty declaration that Mrs. Thatcher’s policies could never achieve sustained economic growth: they have been proved spectacularly wrong. Brown was one of Thatchers fiercest opponents… but when in government he reversed nothing that she did and inf fact encouraged and advanced it!

    Were it not for Thatcher and the reforms implemented by the Conservative party Britain would still be in decline and I defy you to find an economist that would contradict this. (If you are going to refute it I want links, statistics and proof not mere unsubstansiated speculation) But as I am trying to get at it is not our economic legacy that will be judged at the next election it is yours! In the cold light of day the Labour spendsholic, northern rock buying, tax hiking Brown will not be all that popular.

  9. It’s interesting how much you lean on the ideas of others but can’t defend these views yourself.

    “On May 4, 1979 she quickly set about implementing her monetarist reform agenda. Just one month later, the basic rate of taxation was cut from 33 percent to 30 percent and the top rate on wages went down from 83 percent to 60 percent. In subsequent years, the basic rate was reduced to 25 percent and the top rate lowered to 40 percent. These arent opinions but economic fact support by economists such as Friedman and Stelzer.”

    That has nothing to do with monetarism. Do you even know what monetarism is? John Major has said that he did not feel that monetarism had been followed while he was in office and when’s the last time George Osborne was brave enough to talk about M0 and M4? I also think it’s quite sweet that you think to quote the name of an economist to support the news that a specific tax cut was implemented. What will it be next? “The battle of Hastings was in 1066! (Schama, 2002, page 148)” Measuring the overall tax burden (which can be a bit meaningless) does require the work of economists and both the IMF and IFS agree that it rose under Thatcher.

    “The result was a rejuvenation of the economy, the restoration of an enterprise culture, and the end of talk about British decline.” -She left Britain with the worst recession since the 1930s a budget deficit that grew to the highest level in decades, a welfare state that was much bigger than she inherited, national debt up and mass unemployment. She made important structural changes and I don’t deny that. But in assesing Labour’s economic performance we must consider the record of previous governments and the world economic conditions. By both measures Our performance has been very strong. And before you suggest that it is irrelevant, there are no other ways of measuring perofrmance, not just in economics but in any other area of life.
    “Whereas a few years ago 364 professional economist put their names to a haughty declaration that Mrs. Thatcher’s policies could never achieve sustained economic growth: they have been proved spectacularly wrong.”- Of course it didn’t. We had the recession of the early nineties and a neo-keynsian approach from Clarke and Lamont.

    “To keep the system operating required huge government subsidies, paid for with budget deficits that were monetized by the central bank” So could you please explain why in 1993 they reached an all time high with debt in 1997 higher as a percentage of GDP than in 1979?

    “the establishment of a welfare state had a cripling effect on British competetiveness and productivity.” A welfare state that grew under Thatcher leaving us with a bigger dependency culture than ever.

    I thought the Tories supported the buying of Northern Rock. Or have you changed your mind again? As for tax hiking, your own PT has just said the Tories will raise taxes. Will that go in your manifesto?

    Your blog was an attack on Mr Ritchie’s savaging of Tory rehtoric on the economy. It’s interesting that by now you have said absolutly nothing substantial about Labour’s performance on the economy. No one denies that some things were done right in the 1980s but this does nothing to change the emptiness of tory views on today’s economy.

    “But as I am trying to get at it is not our economic legacy that will be judged at the next election it is yours!”

    Fine. So lets talk about it. Now that you’ve given up on your hysterical claims about government borrowing and debt we are left with nothing in your initial article. Infact anyone reading this might want to read his original article and see how nothing in that article that reffers to Labour’s performance remains standing.

  10. Eventually, Labour always wreck the economy.

    The £25billion deficit racked up in the first quarter of this year is the widest since records began in 1946. That’s absolutely horrific and taking the position that all is well in the fiscal realm is astonishingly blinkered.

  11. Okay Ill deal with Labour. Ever since it came to office the government has boasted of bringing an end to “boom and bust” implying that it has succeeded in abolishing the business cycle. The current situation has exposed this as bull.

    The state of the public finances has also called into question the government’s reputation for “prudence”. After 16 years of uninterrupted GDP growth, the economy is entering a potentially marked downturn with no room for fiscal manoeuvre. If fiscal stabilisers are allowed to operate, as they almost certainly will be, the budget deficit, which is already dangerously close to the Maastricht limit of 3% of GDP, will rise further. Raising taxes to curb such a deterioration would be dangerously pro-cyclical, and would in any case make little sense politically given voters’ reluctance to stomach further increases in a tax burden that has already risen sharply over the past decade.

    The economy is weakening as are public finances as such Labour’s economic record in office is now being revised. Up until recently most believed that Labour was relatively economically sound… by Labours standards. This is no longer the case. Now people are asking just how and where public money has been spent. The answer is becoming increasingly clear: to fund a spiralling public-sector wage bill that has failed to deliver significant improvements to key public services.

    Labour came to office in 1997 promising not to return to the old Labour rhetoric of “tax and spend”. Yet this is exactly what it seems to have done. Public money has been thrown at an increasingly bloated and dysfunctional state in the hope that improvements in public services would follow. Some welcome progress has been recorded in important areas such as health and education, but this has not been proportionate to the investment. This is not good economic management this is economic frivolity that has yielded little result.

    I would also point you to the folowing links for bedtime reading:

    http://www.ifs.org.uk/budgets/gb2005/05chap6.pdf

    http://news.bbc.co.uk/2/hi/uk_news/politics/1933457.stm

    http://www.newstatesman.com/society/2007/10/child-poverty-labour-2010-tax

    http://news.bbc.co.uk/vote2001/hi/english/newsid_1321000/1321483.stm

    http://www.birminghampost.net/comment/birmingham-columnists/agenda/2008/03/31/uk-families-buckle-under-labour-s-economic-policy-65233-20697503/

    Theres plenty more.

  12. PT, I have already addressed your point about the £25bn defcicit and pointed out that it’s actually quite small.

    “Ever since it came to office the government has boasted of bringing an end to “boom and bust””

    There’s still no bust and we continue to out-perform our competitors.

    And PT you say ‘labour always wrecks the economy’ and the editor talks about ‘Labour’s standards’. Only one government since the war has left office with a budget surplus and it was a labour one.

    This is just getting boring. We see the same cliches from the Tories time and time again. The editor talks about a bloated state when the welfare state expanded massively under Thatcher.

    The editor’s post seemed a little thin on the ground:- very little in terms of stats. Does he have any economic policies?

  13. The £25 billion deficit in the first quarter of this year is ‘actually quite small’. In absolute AND percentage terms it’s record-breaking and not in a good way. None so blind as those who cannot see.

  14. I have already explained to you that government borrowing is not spread evenly over the year. That’s a very simple fact. Calculating annual government borrowing by taking a quartrly deficit and multiplying by four is like taking a day’s rain and multiplying by 365 to estimate annual rainfall. And no even if we do accept your ridiculous calculation it’s still far from unprecidented.

    Further, at the same time these figures were released, the European Commission confirmed that the deficit would total 3.3% of GDP (it was 7.8% in 1993) with the deficit reaching 5% in the US.

  15. Your point isn’t a point. Focusing on government borrowing for one quarter is pretty meaningless, particularly when you consider that comparisons are practically impossible due changes in the revenue system. I do find it interesting that 95% of the garbage in the original article has been quietly dropped.

  16. For a start jack the first 3-4 paragraphs aren’t opinon they are fact. So youre ‘95%’ critique is a bit off. The article was intended to criticise John Ritchie for saying that Conservatives are incompetent when it comes to economic matters because the growth that labour has presided over has only come about by following conservative economic policy not traditional labour policy which encouraged nationalisation and other left wing rubbish. In addition if you look at traditional voter perception and historical record the Conservative party is generally seen as the most economically competent. Although this has changed somewhat after New Labour adopted much of Conservative party policy.

    What I was getting at was that New Labour have attempted to adopt Conservative economic policy but in many ways they have failed because under them taxes are higher than they have ever been, far more so than under the Conservatives and they have spent disproportionate amounts which have produced little results. You refuse to accept this despite a plethora of economists and other commentators (not just tory) who acknowledge this is true. Incidently you accused me of suggesting that the economy is the bee all and end all when it comes to elections which is false.

    When actually I said that in times of economic stability ‘it is fair to say’ that incumbent governments are ‘likely’ to be re-elected, however if the pound in your pocket feels that bit lighter ‘a government is on very shakey ground’ This is not saying when the economy is good you are automatically elected it is saying there is a greater chance just as when it is in a bad way you are more likely to lose.

    I did not abandon my origional article I gave up trying to defend it to you when you were nit picking and throwing figures around which contradict the ones I have seen and the ones I directed you to on the web. I attempted to use economists to legitimise my view… you dismissed them also. So I got to the point when i thought whats the point? As prague tory says ‘none so blind as those who cannot see’. As Labour you are automatically programmed not to see.

    Economics admittedly is not my strong point and to a large degree I do rely on trained professionals to better inform my understanding, after all you arent just born with knowledge you have to acquire it. From what I have understood and the general feeling in the country at the minute, Labours economic record has been grossly exaggerated and glorified. Labour have taxed more than any government before it just in more underhand and devious ways, they have had few real economic tests and your reference to germany and japan is hollow. However now they are really being tested they are making a hash of it. Yes Northern Rock wasnt neccessarily the governments fault but as daniel states the sale could have been handled better.

    To make matters worse Darlings mixed messages on stamp duty are only exaccerbating the problems within the housing market at the minute. This is not economic competence Jack. Ultimately in regards to the economy Thatcher and the Conservatives did nothing by deception, they inherited much tougher conditions and left a far greater economic legacy… Labour by contrast do everything by deception, inherited very strong economic conditions and have sat back, thrown money willy nilly and done nothing to prepare for the bust that they so arrogantly predicted would never come.

  17. Jack is quite right. Concentrating on one quarter in isolation can give a distorted view as movements over short periods can be volatile. The PSBR is unlikely to come in at £100bn. The Capital Economics prediction of about £57bn (if that) is more realistic.

    It must also be considered that public debt as a percentage of GDP is about 38.3% (end of June) only 1% higher than 12 months ago. This is not record-breaking at all. It is in fact better than the debt peak of 43.8% in 1997. Again Jack is quite right to point how much the public debt was reduced between 1997/’98 and 2002/’03.

    However, it is true that the government will probably exceed its own fiscal rules. The irony is that the golden rule, which was the basis of the government’s economic competence, is now a major political obstacle.

  18. “We are all aware that the seeds of change in the Labour party were sown in the early 1990’s.”

    No the seeds of change were sown in the policy review of the late 1980s. The modernising agenda actually slowed down in the early 90s under John Smith before accelerating again in the mid 90s under Tony Blair.

    “I did not abandon my original article I gave up trying to defend it to you when you were nit picking and throwing figures around which contradict the ones I have seen and the ones I directed you to on the web.” -Well you ran away from the issue of debt pretty quickly and you seem to be very quiet on monetarism. Have you found out what it is yet? The few figures you have quoted were usually meaningless. I suspect quite a few people are amused by your “£550 billion pounds” comment. I have already explained to you the pure stupidity of that remark.

    “they have had few real economic tests and your reference to Germany and Japan is hollow.”- 100% rise in oil prices and 50% rise in raw material prices. In 2001, the US economy slowed and many feared recession including Ken Clark, but it was avoided by making the right investments.

    “When actually I said that in times of economic stability ‘it is fair to say’ that incumbent governments are ‘likely’ to be re-elected…” There is almost no correlation at all between economic strength and the re-election of governments. In fact recession has helped some governments in the past. Take 1992 as a prime example.

    “your reference to germany and japan is hollow” – I like these little out bursts that have no substance whatsoever. Dan you seem to be suffering from Thatcherite Tourette’s syndrome. I think it’s fair to make international comparisons. It is one of the ways we can evaluate the government’s performance. It’s certainly more relevant than what you describe as ‘the general feeling at the moment’. You must be one of the few people in politics who gets his ideas from a cab driver.

    “The article was intended to criticise John Ritchie for saying that Conservatives are incompetent when it comes to economic matters…” –We have seen a spectacular demonstration of Tory economic incompetence over the last few days. You made claims on borrowing that were meaningless, PT charged around talking about Britain needing tax cuts: then said the Tories wouldn’t cut taxes, and when all this failed you sought refuge in so-called ‘popular perception’ revealing to all where the Tories real priorities are: packaging instead of substance. You and your party allies know that over the next 18 months you will have to hide behind the glossy wrapping paper because you know that any close inspection reveals your gift to the British people as the economic equivilant of a woolly jumper: out –dated, unwanted and ultimately consigned to the dustbin.

    Perhaps one of your earlier comments is the most revealing piece of whooly thinking behind the packaging:

    “…the establishment of a welfare state had a cripling effect on British competetiveness and productivity.”

    I think the majority of Tories see that as beyond Thatcherite, and instead a throw-back to the 19th century; revealing your ideas to be one of the last dribbles of far-right extremism down the leg of British economic policy.

  19. Jack, opposition does allow the conservatives to hide behind glossy wrapping paper. In fact the Cameron team’s approach is quite strategic. While they have developed a general direction, they are not tied to precise policies.

    This said, it would help if other tories avoided preempting policy.

  20. ‘It would help if other tories avoided preempting policy’

    To an extent. Free and wide-ranging debate is a key difference between us and the Labour Party and one that, personally, I cherish.

  21. “This said, it would help if other tories avoided preempting policy.”

    Daniel I undestand what you are saying but Osborne and others can’t keep their mouths shut. I also suspect that ‘a general direction’ is all some people are capable of, because as soon as they consider how to put it into action, they realise how hopeless their situation is.

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