Saturday, 10 October 2009

We Don't Need Another Overpromising Chancellor

Don't get me wrong I'm all for an aspiring Chancellor seeking economic advice from Economists, after all my degree is in economics so I know the importance of gauging other's opinions. Also I did say earlier this week that George Osborne,

"Like any mediocre student...went to the library and looked up what the master [Vince Cable] had written, taken some key points out of it, tried to pass it off as his own work, but fell short as the whole thing doesn't fit right together."

So the fact that he had also read and used figures from a National Institute of Economic and Social Research paper in preparation for his big keynote speech would be good news. Shouldn't it? Well no apparently he misunderstood that as well to the tune of £3bn or a period of 5 years out.

The previous chancellor promised he's done away with boom and bust. We now say, 'huh?'. Our current chancellor Alistair Darling has mispromised recovery and misrepresented respected economic sources in his budgets. A fact that Darling failed to understand his own incompetencies when he condemned Osborne by saying he:

"has overclaimed comes as no surprise at all. He has shown a shocking lack of judgment through this crisis. His erroneous claims on what he would raise from his pension cuts are just another example."
We don't need another chancellor who is that fictional with the fact, but that is how it is shaping up. At the start of the week of Conservative Party conference we were promised by Dave on the Andrew Marr show that they would be straight talking, and we certainly got austerity, doom, gloom and reality biting home. But have we been oversold the hope? Has Osbourne really promised 5 years quicker to deal with something than is achievable?

If he has he has taken the decision that it fits into the election cycle pattern rather than reality. Not everything is achievable in the 4-5 years that most UK Governments are elected into, that is a reality that we need to wake up to. Politicians can't promise the world and expect to deliver it in one term, if that is not doable.

Osbourne tried to wiggle out of the £3bn difference in claiming that he was accounting for inflation to come up with his 10 year hence figure. However, the NIESR said:

"There is no way of knowing how much it will save except in today's money.. The general principle behind raising the retiring age to 66 is sound. Indeed there is a good case for a rise earlier than the Conservatives are proposing. As we understand it, the full benefits of the package that the Conservatives are proposing will not be realised until after 2020. In 2016 it will only raise £4bn, rising to £10bn in 2023, with the full effect coming in 14 years' time."
So not £10bn in today's money (£13bn with 'inflation') by 2020 as George promised and tried to argue away.

What they can promise is to sort out the system to make the improvement possible. The current chancellor in his last budget overpromised on the recovery the country would rebound with, as figures since have proven. The man who may be next has misrepresented and overpromised another think tank.

We don't want, need nor deserve chancellors who look at economic advise a guideline figure and then try and improve on that. What we do need is someone in charge of our economy who understands economics the principles and mechanics behind what advise is given, not someone playing bridge or poker and merely upping the bidding. Vince Cable shines in that respect above both Darling and Osborne, he knows the issues, understands the theory and reasons the best and doable solutions. If you want straight talking he's the man.

No comments:

Post a Comment