Originally published @ 11:44 am, Mon 25th Oct 2010
George Osborne made a very bold statement in the Comprehensive Spending Review –
“we will make sure that the financial catastrophe that happened under the previous Government never, ever happens again”
Yes, he promised to end bust.
I'm not sure people have twigged yet.
Maybe they were thrown by an earlier exchange when David Cameron ridiculed Labour for having said "no more boom and bust". (Little matter that what we meant was an end to cyclical exploitation of public spending levels geared around election years rather than the stability of the economy.)
People should twig. Because it's the clearest possible statement that they believe the banking collapse was home grown. In this, they are wrong. And when the analysis is wrong, the solution will be wrong.
Surely, no-one should be ruling out the ability of the global economy to generate another bubble.
As for the presentation of the Comprehensive Spending review, many of noted that Conservative MPs cheered the performance by George Osborne and it does warrant a further look. For in each departmental spending cut announced, he quickly moved to explaining how some money had been allocated for specific purposes to do certain good things. A clear sign taht they know that they don't command the centre ground on the value of public expenditure.
Because we know that the ConDems have come to the view that the state is too large. Despite his hand-wringing, Nick Clegg would not say, and the others would not say, that they'd like to see public spending returned to the level achieved before the crash.
Indeed, we now know from the BBC documentary on the change of government that Nick Clegg ran during the General Election on an economic policy he no longer believed in. Remember that for the next time he runs in a General Election.
George Osborne got particular cheers for saying he'd cut the average cut in departmental spending to below Labour's demand. I'm not sure anyone listening would be inclined to follow the notion that the ConDems were in fact being kinder than Labour planned. It was a silly point. And easy to rebut. The ConDems had moved from their July statement of 25% cuts by increasing the cuts planned for welfare by £7,000 million.
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