Liberal Democrat cabinet ministers are worried that the Government is not doing enough to boost growth, and are privately pressing the Chancellor to speed up job-creating building projects in his March Budget.Indeed, Nick Clegg is quoted being openly critical of cuts to capital spending:
In an interview with Parliament’s The House magazine published tomorrow, the Deputy Prime Minister admitted the Coalition made a mistake when it cut capital spending soon after it was formed in 2010. He said: “I think we’ve all realised that ... in order to foster a recovery you need to try and mobilise as much public and private capital into infrastructure as possible. So what we’ve done since then, in effect, is come up with various surrogate ways in getting working capital into infrastructure.”But it is obvious that Clegg’s spin doctors don’t want you to get the wrong idea:
The Liberal Democrats are not calling for a Plan B, which would divide the Coalition on its central mission of tackling the deficit.In their 2010 general election manifesto, the Liberal Democrats predicted that Tory austerity policies would be counter-productive. And with a triple-dip recession now likely, this prediction has proved correct.
So now we’re in the business of saving face. Coalition policy will be changed incrementally to enable everyone responsible to claim they were right all along.
Today's GDP figures show a 0.3% contraction in Q4 2012, which as Nick's admission demonstrates is entirely predictable. Of course this doesn't amount to a call for Plan B, as Plan B is simply applying the sticking plaster of greater spending onto a creaking underlying economy - what's needed, if I may be so bold, is a wider platform of economic reform that fixes our dysfunctional financial system, ensures any deficit reduction is compatible with adequate and effective capital investment, and supports an innovative economy through a better distribution of risk and reward.
ReplyDeleteAll of which is not Plan B, it is, as I've said before, Plan C: http://socialliberal.net/slf-publications/economic-plan-c/