The Chancellor today sounded like a old cracked record that no-one wants to hear any more. Listening to him on the Today programme, I was left wondering does he really believe what he is saying or does he think we are stupid?
He told us the UK had enjoyed economic stability for ten years, including a better record on inflation than many other countries. Has he checked the figures? If you look at the UKs record on the RPI it is worse than the EU or the USA, which is why his predecessor had to switch indices to make it look less bad. Does he think the credit boom followed by the credit bust and a run on Northern Rock is proof of stability?
Is he aware that UK interest rates have been higher than US and EU rates for most of the last decade?
Worse still was his incantation that all this stability had been created and guaranteed by an independent Bank of England. Is that the same Bank of England that Mr Brown reduced in stature so badly by amputating its control over government debt and clearing bank supervision? Is that the same Bank that has to work with the FSA under the chairmanship of the Chancellor when banking problems emerge in the markets? Is that the same Bank that gets briefed against when the Chancellors tripartite system makes a mistake? Is that the same Bank that had to keep interest rates lower than it would have liked and money looser, because the former Chancellor changed the target for inflation at a crucial time when rates would otherwise have gone up? Is that the Monetary Policy Committee whose members are appointed directly by the Chancellor, or by bank officials themselves appointed by the Chancellor? Is that the same Monetary Policy Committee where we are not allowed to know why some members were renewed by the government, and some were not?
The Chancellor should learn that he cannot spin himself out of the current economic difficulty. Some figures will pop up to reveal spin. Many clever and well informed people are watching his every action, and every movement of the economy. The Chancellor would do himself a favour if he dropped the tired old fashioned wrong headed highly spun rhetoric of the Brown years, and started to understand the true nature of the problems he faces. These include:
1. An overspending state which is not getting value for all the money it is tipping into the public sector. He should immediately impose a staff freeze on all public sector posts other than front line in essential services. He should take Conservative proposals to get people back to work seriously, and do something similar himself instead of just talking about them.
2. He should try to stop the flood of public money into Northern Rock, and impose some discipline to ensure repayments.
3. A broken regulatory regime where the Bank has been undermined. He should return government debt management and day to day banking supervision to the Bank.