Listening to the Chancellor tonight on Channel 4 I wondered which economy he was talking about. It couldn’t have been the UK one which the Labour government has done so much to damage.
He told us they had “made the right judgement calls”. Does that include the decision to tax pension funds, or to sell gold at a low price, or to allow a huge build up of debt and credit, or to encourage banks to overexpand by failing to regulate cash and capital, or driving banks into grave difficulties by suddenly shifting to ultra tight money, or expanding public borrowing way beyond an affordable amount or to putting loads of borrowing off balance sheet in the public sector, or to waste so much public money or to fight two wars in the Middle east or to set up so much extra bureaucracy and quangocracy?
He did not seem to grasp the difference between debt and the deficit. The deficit is too large and that is the amount by which the debt is growing. He said he had a choice on how much of the savings in spending he had recently found he could use “to pay down debt”. He is years away from paying down debt. All his forecasts assume colossal increases in debt for years to come.
He conceded that he did not want a death tax to pay for elderly care after all, having spent weeks defending that option.
He said size did not matter on banks, seemingly unaware of the dangers created at RBS and Lloyds by the mega mergers the government allowed or encouraged.
He claimed Northern Rock had enough capital in 2007, apparently unaware that the Banking regulator in the last two years has required all banks to raise much more capital, implying they allowed Northern Rock to trade with too little.
Mr Darling’s positions either revealed a worrying ignorance of banking and the public accounts, or were constrained by the need to do as Mr Brown wishes. No wonder we are in such a mess.