David Prosser: Plan B is simply a slower Plan A
Friday 27 May 2011
Outlook One of the mantras of George Osborne in insisting on seeing through his deficit reduction plan is that it commands enormous support internationally. Well, it has not been the best 48 hours for that argument. First the President of the United States pointedly turned down the invitation to publicly endorse the Chancellor's economic experiment. Then the OECD – hardly known for its wishy-washy liberal views on borrowing – suggested Mr Osborne might have no choice but to slow down.
The Chancellor will no doubt be unrepentant: Plan A or the highway, as you might characterise it. Such is the nature of politics: any hint of a u-turn would be seized upon by Mr Osborne's political opponents. In any case, it suits him to cultivate the image of an unbending Chancellor committed to fiscal rectitude, just as it suits Ed Balls, the shadow Chancellor, to give the impression that his own programme is so much less aggressive, even though it amounts to cuts of only a few billion less each year.
The danger for Mr Osborne is that he sticks to his guns so dogmatically that even those smart enough to see through the rhetoric fall into the trap of thinking a deceleration of deficit reduction, which is likely to be forced on the Chancellor in the end, not least because of the lack of growth, represents some sort of policy upheaval. For markets, much like politicians, perception can be more important than reality.
What Messrs Osborne and Balls do not want to admit publicly is that the notorious Plan B is not a radically different prescription for the British economy, but simply Plan A with less ambitious targets. It's effectively what the OECD called for yesterday, in fact.
As he continues to paint himself into a corner, the Chancellor will find it ever harder to shift to Plan B. But if that shift is eventually forthcoming, we shouldn't let Mr Balls claim it as some sort of triumph. And nor should the markets take it as an admission of defeat.
- 1 Strictly Come Dancing 2014: Gregg Wallace joins line-up as final celebrities revealed
- 2 Notting Hill Carnival: Woman shares selfie after being ‘punched in face for telling man to stop groping her’
- 3 Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
- 4 Oil tanker with $100 million cargo goes missing off Texas coast
- 5 George Galloway left with severe bruising after attack in Notting Hill by man 'shouting about the Holocaust'
YouTube video posted by Isis militants shows 'execution of 250 Syrian soldiers'
Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
Oil tanker with $100 million cargo goes missing off Texas coast
George Galloway left with severe bruising after attack in Notting Hill by man 'shouting about the Holocaust'
Brother and sister, Christopher Buckner and Timothy Savoy, arrested for 'committing incest after watching 'The Notebook''
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
Scottish independence TV debate: Pumped-up Alex Salmond bounces back in bruising second round against Alistair Darling
What do immigrants really think of Britain? Polish immigrant's Reddit post goes viral
Do you realise just how foolish the UK looks?
Ukip Douglas Carswell defection: Tory MP jumps ship to join Nigel Farage
- < Previous
- Next >
iJobs Money & Business
£35000 per annum: Harrington Starr: Network Engineer (CCNP, CCNA, Linux, OSPF,...
£50000 per annum: Harrington Starr: DevOps Engineer (Systems Administration, L...
£60000 - £70000 per annum: Harrington Starr: A prestigious leading professiona...
£50000 per annum: Harrington Starr: Financial Technical Consultant (C++, C#, F...