George Osborne has to go, but probably won’t.
Vince Cable said to much media response this week that he thinks he’d make a good Chancellor, in a blatant hint to the Prime Minister that he thinks Chancellor George Osborne needs to go. I’m skeptical about how great Cable would really be – after being elevated to the position of “politician who might actually be a decent bloke” before the election, since the origin of the coalition he’s been habitually disappointing, favouring dark, egotistical murmurings about how much control he really, secretly has over the government over actually doing anything about the deluge of crap his party has been complicit in.
At the same time, I think Osborne’s position is beginning to look rather uncomfortable. The Tories have been celebrating the announcement by self-important, American bank sponsored, credit-rating agency Standard and Poors that our prized (don’t worry, any regular readers, I’m not going to start talking about Freud again) AAA credit rating is safe (for now).
But Osborne and his OBR (no, it’s not ‘independent’) were promising us growth at this stage – steady growth at 3%, in fact. Actually, what we have are squabbles between economists over whether the official data (which suggests that we’re actually still in recession) is quite accurate or not – either way, there’s no dispute that we’re stagnating, and that nothing is getting better.
All the discourse from Osborne is that of the trenches – we will not be swayed, we will hold fast to the course, and grind it out – when what we’re all waiting to hear is a plan, something different, a novel map for how we’re going to generate growth.
At the same time, stunningly, we here speculation over how much time Osborne actually spends on his job – a job which is one of the most important in the nation. Surely he should spend every waking hour trying to come up with a way to generate growth?!
Small wonder that in a very interesting article by Will Hutton (seriously, read it), he suggests that Osborne is the worst Chancellor of recent times;
His problem is that he is intellectually wrong, very unlucky and far too political for his own good. His eight predecessors certainly made mistakes: all were too complicit in financial deregulation, none interested themselves enough in creating structures to drive investment and innovation, and the Tory group was too indifferent to unemployment. Yet all would have been more careful to preserve the fabric of the country even as they tackled today’s deficit; all would have sought a more reasonable balance between tax rises and spending cuts – and many would have experimented with Lamont’s timing about exiting a recession.
Krugman has long been talking about the ‘confidence fairy’ – the mistaken belief that if you can cut deficits and talk the talk, then this economic mess will resolve itself because everybody will become confident in the ability of the government to sort it out and miraculously start lending, spending and generating.
I dare guess that Krugman is correct to say that the fairy doesn’t exist – we’ll need something solid from the government; a change of policy, much like that suggested by the IMF last week. But the Tories are invested in the belief that it does exist, that it will emerge, and that if we hold fast to course growth will come sooner or later.
There’s three options, then. The first is to abandon that policy, and to introduce some much more significant expansionary activity. That would probably, but not essentially, involve sacking Osborne. The second is to stick tight and true to the policy of clinging on for confidence – that would necessitate ditching a Chancellor who is increasingly inspiring apathy and despair. A final option would be to continue to pay lip service to that policy whilst continuing to support Osborne, which seems almost contradictory. We will have no, or limited, policy for growth, except to hope for confidence – a message which will be pushed by a Chancellor who is achieving nothing and inspires nobody.
Despite all that, I have serious doubts over how easily Cameron can sack Osborne. Cameron is still seen as a lefty in the Tory party. In the leadership contest first round, the majority of the party voted for one of the two “right-wing” candidates, Fox and Davis. Osborne is regarded as a true Thatcherite, and popular with a lot of the party on that basis. He holds a senior position in the party itself. Could Cameron so easily set him aside?