The Thick of It


Monday, November 24, 2008

Pre-budget report

My first thoughts on Alistair Darling's Pre Budget Report are that it clearly presents the country with clear water between Labour and Tory.

Labour has put together a package that at the very least seeks to stimulate the ailing economy. This is set against a Tory Party that cynically states the solutions won't work. The Tory solution is minimal action because they don't believe in government as the answer to problems. The Tories have retreated to their ideological home ground of minimal government and laissez-faire economics.

It is simply not acceptable to allow banks to go to the wall or to leave the poor and low earners without any help when help is available. Labour is certainly trying. Peeling back the surface and starting to look at the details and the picture becomes a little murky. Clearly high levels of public borrowing will have to be paid for over many years. Borrowing increases to levels higher than in previous recessions. However after previous recessions, such as in the 1990s, the government of the day didn't seek to stimulate the economy like this. The economic threat globally was not as great. Darling has sought to make higher earners pay for the borrowing, in future years. This could work and is certainly fair, however is dependent on Labour winning the next election.

Brown and Darling have taken a huge political gamble. It was one worth taking because it offers a glimmer of hope at a time when the Tories have offered nothing.

1 comment:

Daniel said...

It's as if Cameron and Osborne are taking lessons in what economic policies to introduce during a recession from Herbert Hoover. There'll be Cameronvilles all over Britain.