Wednesday, 21 July 2010

Do we really really really trust George?

It's remarkable how things change in politics. Two months ago George Osborne was a surly, spoiled-little-rich-boy dabbler in economics, a lightweight, needing the gravitas of Vince Cable (rememeber him?) to shore him up and convince the markets that the coalition had some "bottom". Today Georgey Boy is the Chancellor of The Exchequer, with the fate of the UK economy in his grasp. Vince, meanwhile, has been despatched to the department for counting paper clips and plastic rulers, the true domain of Lib Dems in a Tory government.

But what of George's plans for our economy? Labour's cuts were too little and too late for him, so he doubled and trebled them and brought them forward by a year. But wait. A report by the National Audit Office reveals that even Labour's planned cuts of £35 billion are not being achieved. The mechanisms do not exist within Whitehall and departments are struggling to make the cuts in the volume and time allowed. Now children, if these cuts are difficult to achieve, what are the chances that we are we going to get the Conservatives' £99 billions of cuts made even more quickly?

Not likely, is the honest reply. But when George Osborne was asked in the Commons last week what fallback plans he had in the event of failure to implement the cuts he said he had none..."confidence in the UK economy", was the bold George's plan B. In the past Mr Osborne has used the credit agencies as a frightener to whip opposition to his plans into line: "if the cuts are not draconian the agencies will downgrade our rating, and then where will we be?" I wonder what the credit agencies think of the situation where there is no plan B but, according to the NAO, plan A is unlikley to work.

A few days ago, despite savage and early cuts, the ratings agencies downgraded the Irish economy .......

Could it be , even with George Osborne's savage plans, plans which were conceived to placate these same  ratings agencies, that the UK be next in line?

1 comment:

  1. The ratings agencies' pronunciations are meaningless