Nice piece in today’s Telegraph, of all places, pointing out that the key point in Cameron’s ‘bloodbath of cuts’ speech yesterday in Milton (Keynes) – that ‘we never knew just how bad things were’ – is actually false: we did know. Not only did we know that the economy was already heading for debt interest of an annual £70bn in five years but also, therefore, the figures now look no worse than they did back in April.
Of course, ‘call me Dave’ could be just softening us up so that the cuts, when they are eventually announced in the 22 June budget, are ‘not as bad as we feared’; and, of course, he’s no doubt conscious of the remarks that Mervyn King may or may not have said before the election that the public will remember the party that made the cuts, not the one before it – and so perhaps this is an attempt to try to drag Labour into the blame picture, if only by implication.
On top of this, arguing that ‘the world was moving Britain’s way’ on the issue of cutting deficits rather than seeking fiscal stimulation, the scale of the cuts being contemplated in Germany and the attempt by at least one unelected, unaccountable ratings agency to force the pace even further, and it seems that Thatcher really has arrived back in Downing Street. Sobering stuff, indeed (though Steve Bell does lighten the mood!). This may well be the end of fiscal stimulus, but cutting budget deficits is done far quicker and far easier in the context of an economy that is growing, not contracting, and that is likely to demand not only a continuing pump priming role for the public sector, but also an environment of investment – neither of which are likely to result from a race to the bottom on cuts.