The Thick of It

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Tuesday, February 02, 2010

George Osborne: it was acceptable in the 80s

George Osbourne's speech today outlining the Tory economic plans should they win power suggests they are looking to reprise many of the economic policies of the 1980s. 


Specifically, the Tory plans to raise the private sector's share of the economy in all regions means only one thing: less government spending. Less government spending means fewer public services. While all parties agree that public borrowing (and spending) needs to be reigned in, it should not be ignored that public spending has helped reduce the impact of the recession. Cutting it severely and quickly could put the recovery back. 


The Conservative Party are recycling the rhetoric of the 1980s. Yet even then, a Thatcher government that regularly espoused a desire to cut public spending, failed to do so. David Blanchflower, Former member of the Bank of England's Monetary Policy Committee recently asked: "how exactly are the policies of the 1970s and 1980s relevant this time round...these are one-size-fits-all economic policies, and are out of place and out of time." Blanchflower later quotes Nobel Prize winning economists Paul Krugman and Joseph Stiglitz, neither of whom think public spending should be cut now. 


If the Tories really are serious about being a serious government, they will need some serious and credible policies. Osbourne's speech today failed to deliver. Perhaps that is why the Tory poll lead has come down to seven points, pointing at a hung parliament? Many voters may have fallen out of love with Labour, but they are far from convinced by the Tories and their lack of ideas. 

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