by Peter Watt
This week saw yet another u-turn by the chancellor. This time over the imminent rise in fuel duty now delayed until Christmas at least. It was all great fun as George Osborne further dented his reputation and future leadership prospects. Rightly Ed Balls had a ball pointing out the increasingly lengthy list of u-turns since the budget. But there was another piece of economic news this week that was much more significant.
Mervyn King, Governor of the Bank of England, was appearing at the Treasury Select Committee on Tuesday and his conclusions were pretty grim:
“When this crisis began in 2007, most people did not believe we would still be here. I don’t think we’re yet half way through this. I’ve always said that and I’m still saying it. My estimate of how long it will take to recover is expanding all the time. We have to regard this as a long-term project to get back to where we were, but we’re nowhere near starting that yet. We’re in a deep crisis with enormous challenges.”
So however bad we think it is at the moment, we ain’t seen nothing yet. There are years of tough times to come whoever is in government. Years of cuts and years of tough decisions. We already know that the majority of the proposed cuts to public spending, the level of which we have accepted, are still to come.
But it feels at the moment that many in Labour have comforted themselves with the notion that (1) George Osborne is useless and (2) all we need are some pro-growth policies.
Then as growth returns and tax receipts rise we can avoid tough decisions. But setting aside that delivering growth is easier to say than to deliver; even if the economy began growing Labour would not be able to avoid those tough decisions should we form the government post 2015.
