George Osborne appeared to soften his hardline language about tackling the deficit in the public finances amid growing fears about Britain's fragile recovery. The Chancellor insisted again yesterday that there was no need for the "Plan B" demanded by the Labour Opposition and some economists. But, significantly, he said his strategy would ensure "flexibility" as well as his usual mantra of "stability and confidence".
His use of this F-word provoked a flurry of speculation at Westminster. The Treasury and Downing Street argued that he was merely stating the obvious: that borrowing might have to increase temporarily if unemployment was higher and government receipts lower because of sluggish growth. Officials insisted this would not affect the Chancellor's goal of eliminating the structural deficit – the part not due to such ups and downs in the economy – by 2015-16. They said he already has some flexibility built into his plans, which show his target being hit a year early.
Yet Mr Osborne chooses his words carefully and perhaps he was trying to send a signal to the voters that his approach was not so rigid that he would stick to it at all costs to avoid anything that could be portrayed as a U-turn.
The Chancellor has told fellow ministers that any talk of a Plan B would be self-defeating. The inevitable wobble in the markets would force a rise in interest rates, thereby putting a dampener on growth.
So Mr Osborne is adamant that there really is no alternative to the Government holding its nerve for the next couple of years. "We are coming out of a severe recession and the banks are still recovering," one ally said yesterday. "There isn't a magic wand any one can wave. It's going to be a long haul." Labour argues that the economy is flatlining precisely because the Coalition's spending cuts go too far, too fast. But the Tories claim that Labour's policy of halving the deficit over four years is not really very different to their own, and that Labour lacks the courage to spell out the only real alternative – higher spending and higher taxes. Not true, counters Labour, which has said some of the cuts it would carry out could be delayed until towards the end of the four-year period, so they would not strangle the recovery at birth.
There is another reason why Mr Osborne does not want to admit to a Plan B and would never call it that, even if he were forced to change tack: it would hand Labour a potent weapon for the 2015 general election.
Despite the fears about the economy, the Tories appear to have the upper hand over Labour. According to YouGov, more people (41 per cent) blame Labour for the cuts than the Coalition (26 per cent). Those figures would be transformed if the Chancellor were judged to have reached for Plan B.