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Economic Responsibility the David Cameron Way
Without hesitation, deviation and little if any repetition David Cameron tore ten years of New Labour economic policy apart limb by limb. It was an excellent performance by the Tory Party leader who had Shadow Chancellor, George Osborne sitting by his side to hold his hand. In the event Cameron hardly needed Osborne at all save to put some meat on the odd question that later arose. Before I go any further and ignoring the justified criticism of failed Brown policies let me just remind of the main points of the Cameron speech in regard to future Tory policy:
1. Creation of the ‘Office of Budget Responsibility which would be independent of government acting to ensure full government transparency and holding ministers to account. It would have significantly more power than Commons Select Committees and presumably also the National Audit Office as well.
2. Tough regulation of the banking and financial sector, tighter controls over bank lending, link pay plans to overall bank risk and to make mortgage lenders and rating agencies take greater responsibility for their actions and called for changes in the insolvency laws to protect sound but struggling businesses.
Explaining some of these plans in slightly more detail than before it is clear that while Cameron would intend to give both the Bank of England and the FSA greater powers if he won the next election he is intent to place a far greater level of dependence on his proposed ‘Office of Government Responsibility’ to ensure that when it comes to the government role in this it will be steered by what this new independent body decides. While calling for a big shift in banking and financial market regulation Cameron implied that what we need is better and wider regulation as opposed to more of it. While the centre of his attack was reserved for how in his view the Brown government had fundamentally failed for the past ten years building an economy based on home building, financial services and government spending his implied criticism of the regulatory authorities and particularly of the rating agencies was easily observed. Interestingly, whilst there were clear signals of strengthening the Bank of England and FSA hands Cameron did not say however that the Tripartite Agreement would be finally laid down to rest.
Whilst a good part of the speech this morning was reserved for what the Conservative Party would do if it gained office the majority was reserved as an out and out attack on ten years of failed New Labour economics. Embracing free market economics without understanding how it worked and that led to inevitable and irresponsible capitalism Cameron said the that Mr. Brown had spent and borrowed without constraint and, without actually saying it, that had encouraged the public to do the same. Brown had believed in Cameron’s view that he had ended the boom and bust cycle and that the good times would last forever. In summary whilst accepting that this crisis had its roots in similarly failed policies in the US Cameron’s view was essentially a total condemnation of the complete and utter failure of Labour’s economic record. We had failed to regulate public and private debt. Accepting that it would take years to remedy this one must assume there is a strong hint in this that the Conservatives would be in no position to cut taxation until the balance of public spending and public borrowing is under control.
Comment:
Rightly, Cameron made no apology for supporting the Brown measures to resolve difficulties in the capital market system and bank re-capitalisation. But quite clearly this attack on Brown, however justified, can only be seen as an attempt to steal back the initiative that Brown gained this past week since the UK and European bail out plans were announced. Cameron certainly came out fighting and whilst some of his specific ideas lack meat they lack no merit. But are they achievable? Ultimately they are but maybe not in a single parliamentary term of five years. Somehow Cameron must put over to the electorate that there is no quick fix. Economic Responsibility is a fine aim but one can easily argue that achieving it in government is never as easy as stating the obvious when in opposition. Calls for improved regulation are of course to be welcomed and they do appear to along the right lines but we need to remember that the Conservative Party was the first to call for deregulation. Rightly, Cameron appears intent to leave certain of the changes that Brown imposed back in 1997 - such as giving the Bank of England responsibility over interest rate policy – alone but as yet he has said little as to how he would stimulate the economy. His new Office of Budget Responsibility could prove to be a hindrance in this but hopefully not. Overall this was though an excellent display of political intention and leadership and it fully deserves to win the day.
Without hesitation, deviation and little if any repetition David Cameron tore ten years of New Labour economic policy apart limb by limb. It was an excellent performance by the Tory Party leader who had Shadow Chancellor, George Osborne sitting by his side to hold his hand. In the event Cameron hardly needed Osborne at all save to put some meat on the odd question that later arose. Before I go any further and ignoring the justified criticism of failed Brown policies let me just remind of the main points of the Cameron speech in regard to future Tory policy:
1. Creation of the ‘Office of Budget Responsibility which would be independent of government acting to ensure full government transparency and holding ministers to account. It would have significantly more power than Commons Select Committees and presumably also the National Audit Office as well.
2. Tough regulation of the banking and financial sector, tighter controls over bank lending, link pay plans to overall bank risk and to make mortgage lenders and rating agencies take greater responsibility for their actions and called for changes in the insolvency laws to protect sound but struggling businesses.
Explaining some of these plans in slightly more detail than before it is clear that while Cameron would intend to give both the Bank of England and the FSA greater powers if he won the next election he is intent to place a far greater level of dependence on his proposed ‘Office of Government Responsibility’ to ensure that when it comes to the government role in this it will be steered by what this new independent body decides. While calling for a big shift in banking and financial market regulation Cameron implied that what we need is better and wider regulation as opposed to more of it. While the centre of his attack was reserved for how in his view the Brown government had fundamentally failed for the past ten years building an economy based on home building, financial services and government spending his implied criticism of the regulatory authorities and particularly of the rating agencies was easily observed. Interestingly, whilst there were clear signals of strengthening the Bank of England and FSA hands Cameron did not say however that the Tripartite Agreement would be finally laid down to rest.
Whilst a good part of the speech this morning was reserved for what the Conservative Party would do if it gained office the majority was reserved as an out and out attack on ten years of failed New Labour economics. Embracing free market economics without understanding how it worked and that led to inevitable and irresponsible capitalism Cameron said the that Mr. Brown had spent and borrowed without constraint and, without actually saying it, that had encouraged the public to do the same. Brown had believed in Cameron’s view that he had ended the boom and bust cycle and that the good times would last forever. In summary whilst accepting that this crisis had its roots in similarly failed policies in the US Cameron’s view was essentially a total condemnation of the complete and utter failure of Labour’s economic record. We had failed to regulate public and private debt. Accepting that it would take years to remedy this one must assume there is a strong hint in this that the Conservatives would be in no position to cut taxation until the balance of public spending and public borrowing is under control.
Comment:
Rightly, Cameron made no apology for supporting the Brown measures to resolve difficulties in the capital market system and bank re-capitalisation. But quite clearly this attack on Brown, however justified, can only be seen as an attempt to steal back the initiative that Brown gained this past week since the UK and European bail out plans were announced. Cameron certainly came out fighting and whilst some of his specific ideas lack meat they lack no merit. But are they achievable? Ultimately they are but maybe not in a single parliamentary term of five years. Somehow Cameron must put over to the electorate that there is no quick fix. Economic Responsibility is a fine aim but one can easily argue that achieving it in government is never as easy as stating the obvious when in opposition. Calls for improved regulation are of course to be welcomed and they do appear to along the right lines but we need to remember that the Conservative Party was the first to call for deregulation. Rightly, Cameron appears intent to leave certain of the changes that Brown imposed back in 1997 - such as giving the Bank of England responsibility over interest rate policy – alone but as yet he has said little as to how he would stimulate the economy. His new Office of Budget Responsibility could prove to be a hindrance in this but hopefully not. Overall this was though an excellent display of political intention and leadership and it fully deserves to win the day.
- NEVER.......
