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Friday, January 23, 2009

Re-visiting the 1970s

The Conservative Leader tried to conjure up the ghost of the 1970s and all the bad memories of the winter of discontent and the intervention of the International Monetary Fund in the British economy yesterday by warning that Britain may have to borrow billions of pounds from the IMF again so as to keep the economy afloat:

In remarks that are likely to provoke Labour charges that he is running down the economy, the Tory leader spoke of a "frightening and worrying" scenario in which the nation's finances run dry.

"If we continue on Labour's path of fiscal irresponsibility, at some point - and it could be very soon - the money will run out," Cameron said in a speech to the Demos thinktank in London. "Then you will see the return of what happened under Labour in the 1970s, including emergency cuts to many of the public services on which a progressive society depends."

The Tory leader, who spoke of a "catastrophic fiscal position", said he was not setting a date by which Britain would turn to the IMF for emergency funds, as the former chancellor Denis Healey did in 1976 in a move which destroyed Labour's economic credibility and helped bring Margaret Thatcher to power three years later. But Cameron warned of a real and growing risk that Britain will have to turn to the Washington-based fund which usually helps developing nations.

It is a clever move but I am not sure how much resonance it will have. That is because many voters will not remember that period but more importantly, those that do will have the counter-image of Margaret Thatcher coming to power to contend with.

It might play well in Middle England but those of us who live in communities that were devastated by Thatcherism will not thank David Cameron for reminding us of how bad things really could get.
It's the worst downturn in the British economy for 28 years, according to radio news this morning. Do the arithmetic; bad as Brown's handling has been, it is still not as disastrous as that of Thatcher and Howe in 1979/80.
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