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.
New UK station Russia Today gives a very bizarre view of Britain
Top Gear presenter is no stranger to foot-in-mouth controversy
New essay by JK Rowling went live on Pottermore site this morning
Charlie Sheen could be set to revive his role as a hedonistic womaniser
Review: Mike Leigh's biopic is a rambling, rich character study
- 1 'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
- 2 Canadian actor punched in face after 'Islamophobia' experiment goes wrong in wake of Ottawa shooting
- 3 Topshop at centre of row over body image as 'shocking' skinny mannequin photo goes viral
- 4 If you think Russell Brand’s new book is confused, you should read what his critics have to say about it
- 5 Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
Canadian actor punched in face after 'Islamophobia' experiment goes wrong in wake of Ottawa shooting
Halloween 2014: From the Screaming Man of Pluckley to the 'White Lady' of the Tower of London - Britain's 20 most haunted places
Russian politician says Apple CEO Tim Cook should be 'banned' from country after coming out as gay
Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
Pope Francis declares evolution and Big Bang theory are real and God is not 'a magician with a magic wand'
Huge surge in Ukip support after EU funding row, according to new poll
Ukip ‘exploiting grooming scandal’ to secure party’s first police chief
Nigel Farage: 'There’s nothing wrong with white people blacking up'
Maureen Lipman says 'she can't vote Labour while Ed Miliband is leader'
Muslims, immigration and teenage pregnancy: British people are ignorant about almost everything
iJobs Money & Business
£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...
£20000 - £23250 Per Annum pro rata: Clearwater People Solutions Ltd: Pro rata ...
£40 - 48k + Benefits: Guru Careers: We are seeking a Marketing Manager to join...