Saturday, October 10, 2009
Oops!
The Guardian reports that George Osborne's already precarious hold on economic credibility has slipped still further following an enormous gaff by him and his staff. The shadow chancellor's claim that he would save £13bn by raising the state pension age has been challenged by the respected thinktank that provided the basis for his figures.
The National Institute of Economic and Social Research (NIESR) said the shadow chancellor's proposed saving, outlined at the Conservative party conference this week, would take five years longer than estimated and fall £3bn short.
NIESR said Osborne's team had made a mistake in their calculations, misreading a paper written by the thinktank earlier this year. Osborne's aides originally based their calculations on a NIESR document in the House of Commons library.
However, it does not end there. The paper says that David Blanchflower, respected economist and former member of the Bank of England's monetary policy committee, has criticised the Tories' financial plans, saying they had the potential to push the UK economy into a "death spiral".
"We are in the midst of the worst recession most people alive have ever experienced, or will probably ever experience," Blanchflower writes. "Lesson one in a deep recession is you don't cut public spending until you are into the boom phase. The consequence of cutting too soon is to drive the economy into a depression. The Tory economic proposals have the potential to push the British economy into a death spiral of decline."
The Liberal Democrat Treasury spokesman, Lord Oakeshott summed it up. He said: "This saga of incompetence shoots to pieces his claims to be a responsible chancellor."
The National Institute of Economic and Social Research (NIESR) said the shadow chancellor's proposed saving, outlined at the Conservative party conference this week, would take five years longer than estimated and fall £3bn short.
NIESR said Osborne's team had made a mistake in their calculations, misreading a paper written by the thinktank earlier this year. Osborne's aides originally based their calculations on a NIESR document in the House of Commons library.
However, it does not end there. The paper says that David Blanchflower, respected economist and former member of the Bank of England's monetary policy committee, has criticised the Tories' financial plans, saying they had the potential to push the UK economy into a "death spiral".
"We are in the midst of the worst recession most people alive have ever experienced, or will probably ever experience," Blanchflower writes. "Lesson one in a deep recession is you don't cut public spending until you are into the boom phase. The consequence of cutting too soon is to drive the economy into a depression. The Tory economic proposals have the potential to push the British economy into a death spiral of decline."
The Liberal Democrat Treasury spokesman, Lord Oakeshott summed it up. He said: "This saga of incompetence shoots to pieces his claims to be a responsible chancellor."
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The problem is the people do not think Darling or brown are or where any better, otherwise they have seen this mess coming, even me uneducated could see the housing bubble popping a year before it happened.
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