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

Recruitment Genius: Web Developer - Junior / Middleweight

Negotiable: Recruitment Genius: One of the South East's fastest growing full s...

Guru Careers: Marketing Manager / Marketing Communications Manager

£35-40k (DOE) + Benefits: Guru Careers: We are seeking a Marketing Communicati...

Recruitment Genius: Commercial Engineer

£30000 - £32000 per annum: Recruitment Genius: Estimating, preparation of tech...

Recruitment Genius: IT Support Technician

£14000 - £17000 per annum: Recruitment Genius: You will work as part of a smal...

Day In a Page

Read Next
David Cameron has reiterated his pre-election promise to radically improve the NHS  

How can we save the NHS? Rediscover the stiff upper lip

Jeremy Laurance
 

Thanks to Harriet Harman, Labour is holding its own against the Tory legislative assault

Isabel Hardman
Fifa corruption: The 161-page dossier that exposes the organisation's dark heart

The 161-page dossier that exposes Fifa's dark heart

How did a group of corrupt officials turn football’s governing body into what was, in essence, a criminal enterprise? Chris Green and David Connett reveal all
Mediterranean migrant crisis: 'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves,' says Tripoli PM

Exclusive interview with Tripoli PM Khalifa al-Ghweil

'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves'
Raymond Chandler's Los Angeles: How the author foretold the Californian water crisis

Raymond Chandler's Los Angeles

How the author foretold the Californian water crisis
Chinese artist who posted funny image of President Xi Jinping facing five years in prison as authorities crackdown on dissent in the arts

Art attack

Chinese artist who posted funny image of President Xi Jinping facing five years in prison
Marc Jacobs is putting Cher in the limelight as the face of his latest campaign

Cher is the new face of Marc Jacobs

Alexander Fury explains why designers are turning to august stars to front their lines
Parents of six-year-old who beat leukaemia plan to climb Ben Nevis for cancer charity

'I'm climbing Ben Nevis for my daughter'

Karen Attwood's young daughter Yasmin beat cancer. Now her family is about to take on a new challenge - scaling Ben Nevis to help other children
10 best wedding gift ideas

It's that time of year again... 10 best wedding gift ideas

Forget that fancy toaster, we've gone off-list to find memorable gifts that will last a lifetime
Paul Scholes column: With the Premier League over for another year, here are my end of season awards

Paul Scholes column

With the Premier League over for another year, here are my end of season awards
Heysel disaster 30th anniversary: Liverpool have seen too much tragedy to forget fateful day in Belgium

Liverpool have seen too much tragedy to forget Heysel

Thirty years ago, 39 fans waiting to watch a European Cup final died as a result of a fatal cocktail of circumstances. Ian Herbert looks at how a club dealt with this tragedy
Amir Khan vs Chris Algieri: Khan’s audition for Floyd Mayweather may turn into a no-win situation, says Frank Warren

Khan’s audition for Mayweather may turn into a no-win situation

The Bolton fighter could be damned if he dazzles and damned if he doesn’t against Algieri, the man last seen being decked six times by Pacquiao, says Frank Warren
Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

Blundering Blair quits as Middle East peace envoy – only Israel will miss him

For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
Fifa corruption arrests: All hail the Feds for riding to football's rescue

Fifa corruption arrests

All hail the Feds for riding to football's rescue, says Ian Herbert
Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

The Kurdish enclave still resisting the tyranny of Assad and Isis

In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

How I survived Cambodia's Killing Fields

Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

How Stephen Mangan got his range

Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor