Steve Richards: Call it Plan A, B or C - just give us some growth!

Osborne wants to delay popular tax cuts but even the IMF is calling for policies to promote growth

Share
Related Topics

Rigid plans for the economy are rarely formed and are never adhered to. Even in the best of times Chancellors seek to appear unyielding in their attachment to a plan, but it is the appearance that matters. In reality they cannot be as unswerving as they seem because they are never fully in control of events. In George Osborne’s case he appears to stick to Plan A without having a clue what he might wake up to tomorrow, let alone in a year’s time, and without fully explaining quite what Plan A actually is.

Currently, some senior ministers insist they stick with Plan A while pledging a much needed boost to capital spending. Nick Clegg made such a declaration in yesterday’s Financial Times. In some quarters this is portrayed as Plan B or Plan A Minus. Yet in his first autumn statement in 2010, Osborne made an important qualification to his message of misjudged austerity. He noted the previous Conservative government had made an error during the early 1990s’ recession when it cut capital spending. Osborne insisted he saw the virtues of boosting investment in infrastructure projects and would not make the same mistake. As far as there was a Plan A, it included a theoretical commitment to big capital projects from the beginning.

Sadly the attachment to this form of spending remained theoretical. As with many ministerial statements the actual policy details did not match the publicly declared intent. A substantial cut in capital investment was planned in 2010. Now Clegg promises massive investment in housing and infrastructure. He did not explain precisely how this was going to be financed, so we must await the details. It will be perceived as Plan B, but Plan A included a notional commitment to such projects.

Not that there ever was a fully formed Plan A. Myths form quickly in modern politics. Indeed they form so quickly that even the present is easily mythologised, such as that in the summer of 2010 the UK economy was as precarious as Greece, an assertion that became almost self-fulfilling. It was complete nonsense and entirely at odds with what was happening in front of our eyes. In his last act as Chancellor, Alistair Darling dashed to an emergency European summit aimed at rescuing Greece (now a near weekly gathering). Those attending did not suggest that the UK should be rescued too. But the myth persists that the UK was on the edge of the same cliff.

The myth of Plan A is even more persistent, and accepted even by Coalition ministers, who are trapped by it. As far as there was such a plan, Osborne sought to wipe out the so-called structural deficit by the end of the parliament with real-term spending cuts. In his autumn statement last year the Chancellor admitted the objective would not be met. Some of the cuts agreed in that first rushed spending review will not be met either.

The notion of a Plan A arose because senior Labour figures, in particular Ed Balls, demanded to know whether Osborne was ready to change course in the event of failure. Balls is an important figure in British politics, honoured yesterday by provoking David Cameron to describe him as a “muttering idiot” during Prime Minister’s Questions. Without Balls’ self-confident persistence over the past two years a political consensus would have formed in support of Osborne’s early policies, as it did in the build-up to Tony Blair’s support for a war in Iraq. When that proved a calamity, the Conservative opposition tried to change tack, but could not credibly do so. In contrast, Balls has been a consistent voice on the economy, often when it was deeply unfashionable to be so. It is – and was – important for democratic politics to have such a high level of idiotic muttering.

In response to calls for a Plan B in the autumn of 2010, Osborne gave his policy formal but imprecise definition on the Today programme: |“People in the Labour party keep saying: ‘Where’s your Plan B?’ I’ve got a Plan A...”

From the beginning a degree of flexibility danced with a broader inconsistency. In other areas of policy-making Osborne urged caution over moving too quickly because of the unpredictable global situation. Banking reform, for example, must await a second term on these grounds. And yet the deficit target had to be met irrespective of what happened elsewhere – even though it will not be met.

Unavoidably, the lack of growth will determine government policy rather than a rigid plan. Osborne wants to delay popular tax cuts until nearer the election when he plans to warn of Labour’s tax bombshell, echoing the 1992 election, the last time the Conservatives won an overall majority. But with even the IMF calling for policies to generate growth, government activity in some form is bound to follow soon, as Clegg has promised.

Some will call it Plan B. They will insist it is Plan A. When Mrs Thatcher declared the lady was not for turning in the early 1980s she was U-turning at the speed of a racing driver, loosening her monetarist policies. Ministers have insisted Plan A was about growth as well as spending cuts. Now they must prove it. They can call it whatever plan they want.

s.richards@independent.co.uk  <a href="http://twitter.com/steverichards14" class="twitter-follow-button">Follow @steverichards14</a>
<script src="http://platform.twitter.com/widgets.js" type="text/javascript"></script>

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

VB.Net Developer - £40k - Surrey - WANTED ASAP

£35000 - £40000 per annum + competitive: Progressive Recruitment: .Mid Level V...

Digitakl Business Analyst, Slough

£40000 - £45000 per annum + Competitive Benefits: Progressive Recruitment: Dig...

Mechanical Estimator: Nuclear Energy - Sellafield

£40000 - £50000 per annum + Car, Medical, Fuel + More!: Progressive Recruitmen...

Dynamics NAV Techno-Functional Consultant

£50000 - £60000 per annum + benefits: Progressive Recruitment: An absolutely o...

Day In a Page

Read Next
'Our media are suffering a new experience: not fear of being called anti-Semitic'  

Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk
David Cameron (pictured) can't steal back my party's vote that easily, says Nigel Farage  

Cameron’s benefits pledge is designed to lure back Ukip voters. He’ll have to try harder

Nigel Farage
Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In grandfather's footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

Martha Stewart has flying robot

The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

The dining car makes a comeback

Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

Gallery rage

How are institutions tackling the discomfort of overcrowding this summer?
Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

Eye on the prize

Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

Women's rugby

Tamara Taylor adds fuel to the ire in quest to land World Cup
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices