Friday, December 14, 2012
The triumph of Vince
There was an interesting piece on the Spectator blog yesterday that suggested that not only are the Liberal Democrats exercising considerable influence in government but that on some key areas we are changing the views of senior Tories.
Isabel Hardman says that George Osborne's evidence to yesterday's Treasury Select Committee suggests that the Chancellor is taking on Vince Cable's point of view. She says that it was significant how many times Osborne had to explain a softening in what were previously hard-and-fast economic rules, and hard-and-fast policies:
His refusal to rule out replacing the Bank of England’s inflation target with a growth target is the most significant sign of a coalescing between the two men. Osborne told the committee that the current target ‘has served this country well and provided stability’, but he added that he was ‘glad’ the next Bank of England governor Mark Carney was involved in the ‘debate about the future of monetary policy’. Moving to a growth target would be an endorsement of Vince Cable’s focus on growth rather than deficit reduction.
Then there was the debt target, which Cable has always felt to be an unnecessary rule. Osborne defended his decision to miss it rather than enact further sweeping cuts by saying that ‘of course I very much wanted to hit the target’, but that he would rather avoid a large swathe of cuts ‘and giving myself the satisfaction of hitting the target and the impact that would have on the economy and the unnecessary pursuit of a target’. Osborne would not have described aiming to have debt as a percentage of GDP falling by 2015/16 as being an ‘unnecessary pursuit’ this time last year, but Cable probably would have done.
And there was the threat to the UK’s top notch AAA credit rating. Where previously the Chancellor had trumpeted the UK’s continuing golden status with the ratings agencies as a sign that his economic policies were the right ones, he now said it was ‘one test alongside others’. Cable has always had some choice words about credit ratings agencies, arguing that borrowing costs did not rise significantly for the US after its own downgrade, and that the agencies themselves do not have the world’s greatest track record. Now it seems Osborne is happy to join him in that opinion.
That does not mean that either man agrees with Labour's analysis of course but it is a significant softening of Osborne's stance and Vince Cable's presence around the Cabinet table must bear some of the credit for that change.
Isabel Hardman says that George Osborne's evidence to yesterday's Treasury Select Committee suggests that the Chancellor is taking on Vince Cable's point of view. She says that it was significant how many times Osborne had to explain a softening in what were previously hard-and-fast economic rules, and hard-and-fast policies:
His refusal to rule out replacing the Bank of England’s inflation target with a growth target is the most significant sign of a coalescing between the two men. Osborne told the committee that the current target ‘has served this country well and provided stability’, but he added that he was ‘glad’ the next Bank of England governor Mark Carney was involved in the ‘debate about the future of monetary policy’. Moving to a growth target would be an endorsement of Vince Cable’s focus on growth rather than deficit reduction.
Then there was the debt target, which Cable has always felt to be an unnecessary rule. Osborne defended his decision to miss it rather than enact further sweeping cuts by saying that ‘of course I very much wanted to hit the target’, but that he would rather avoid a large swathe of cuts ‘and giving myself the satisfaction of hitting the target and the impact that would have on the economy and the unnecessary pursuit of a target’. Osborne would not have described aiming to have debt as a percentage of GDP falling by 2015/16 as being an ‘unnecessary pursuit’ this time last year, but Cable probably would have done.
And there was the threat to the UK’s top notch AAA credit rating. Where previously the Chancellor had trumpeted the UK’s continuing golden status with the ratings agencies as a sign that his economic policies were the right ones, he now said it was ‘one test alongside others’. Cable has always had some choice words about credit ratings agencies, arguing that borrowing costs did not rise significantly for the US after its own downgrade, and that the agencies themselves do not have the world’s greatest track record. Now it seems Osborne is happy to join him in that opinion.
That does not mean that either man agrees with Labour's analysis of course but it is a significant softening of Osborne's stance and Vince Cable's presence around the Cabinet table must bear some of the credit for that change.
