Stephaine Flanders said this about George Osborne’s recent speech about the state of the economy:
“The chancellor isn’t declaring victory on the recovery just yet – he’s too careful for that. But he is declaring victory over Ed Balls”
The UK economy is “turning a corner”, Chancellor George Osborne has said in a speech in London.
Mr Osborne cited “tentative signs of a balanced, broad based and sustainable recovery”, but stressed it was still the “early stages” and “plenty of risks” remained.
Mr Osborne said that recent months – which have seen more upbeat reports on the economy – had “decisively ended” questions about his economic policy.
From that you can infer that Osborne didn’t say that the economic crisis is over, merely that the economy has started to recover, it is still a long term project and that many risks remain…but that the one solid conclusion you can draw is that his ‘Plan A’ has worked.
Osborne tells us that industry and productivity are being supported and encouraged for long term sustainable development and growth:
‘…as I said right at the start, in the long term, the only sustainable way to raise living standards is to raise productivity by tackling the underlying structural weaknesses in our economy that were exposed by the crisis……..
Our corporate tax system is now amongst the most competitive in the world, with companies that left the UK now bringing investment back home.
A new industrial strategy is finally providing the long term stability and leadership that is needed in so many sectors such as aerospace, automotive, agri-tech and bio-science.
And British science is scaling new heights with its budget protected for the future and rising capital investment in new facilities.’
All of which makes you wonder what speech John Humphrys was listening to as a basis for challenging Vince Cable who in a recent statement said pretty much the same things as Osborne but Humphrys interpreted the comments as an attack on Osborne.
Cable said this:
‘We can’t rest on our laurels. The kind of growth we want won’t simply emerge of its own volition. In fact, I see a number of dangers. One is complacency, generated by a few quarters of good economic data….It isn’t difficult to see evidence of confidence returning, and there are positive trends in production. Taken together with success stories like the car industry and export growth in emerging markets, we have the beginnings of a recovery story.
‘But there are risks, not least the housing market getting out of control. Recovery will not be meaningful until we see strong and sustained business investment.’
He said we are at the beginning of a recovery, so did Osborne, he said there are many risks still, so did Osborne, he said we shouldn’t take things for granted and become complacent….so did Osborne….
‘So the evidence suggests tentative signs of a balanced, broad based and sustainable recovery, but we cannot take this for granted.’
So why did Humphrys say (08:11) this speech was ‘Not a message that George Osborne would want to hear…you’re raining on his parade’?
Cable replied that Osborne had ‘Got the tone exactly right’ and that the comment about complacency was in regard to some in the Media especially.
Humphrys then questioned the ‘Recovery will not be meaningful until we see strong and sustained business investment’ comment suggesting that this meant the recovery was not a recovery in reality.
But Osborne said the same thing….the recovery is showing tentative signs of starting…and many risks remain….it is a long term programme to get the econoimy back in shape….and includes measures to help industry improve…just as Cable suggests.
Failing to make much headway with taht line of attack Humphrys then switched tack and tried to suggest this was a political stance, electioneering in effect, by Cable to put clear blue water between the Conservatives and the LibDems.
But if Cable’s comments were in support of Osborne, which they were, that isn’t a correct analysis.
Humphrys seemed to be working all too hard to make something out of Cable’s speech that wasn’t there and when he couldn’t succeed at that he tried a different approach…..which also didn’t hold water.
Altogether a waste of everyone’s time and yet another example of Humphrys believing the hype about his skill as an interviewer…those days are long gone in my opinion.
You can see from Flanders intepretation of Osborne’s speech that even she saw exactly what he menat….why couldn’t Humphrys?
A shame Humphrys didn’t feel the need to tackle Cable on his hypocrisy on housing, it could have been amush more prodcutive 5 minutes.
Cable has been praised on the BBC for his warnings about a ‘housing bubble’ being possibly caused by Osborne’s incentive schemes however just last year Cable said this in a speech about delivering growth whilst reducing the deficit:
There are now some interesting ideas out there for government guarantees that could trigger a significant volume of housing investment, replicating the recovery model of the 1930s and leading hopefully to a virtuous circle of new building lending to increased affordability and also increased private demand……
And like in the 1930s, there is no reason in principle why such innovative thinking should not be applied at a local level instead. There are already examples: some councils, Eastleigh, for example, use prudential borrowing powers – at negligible interest rates – to invest in projects with a commercial return.
So one year ago government schemes to encourage the housing market were a grand idea….what has changed?
Osborne says in reply to Cable’s self serving warning:
Some claim that Help to Buy will boost demand but not supply, but again the evidence suggests otherwise.
Not only are the government’s planning reforms already increasing the flow of new planning permissions, but the lack of mortgage availability at higher loan to value ratios has itself been one of the biggest factors holding back the supply of new housing.
That’s why a report last week by former MPC member Charles Goodhart, now at Morgan Stanley, estimated that Help to Buy could increase housing starts by more than 30% between 2012 and 2015.