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Monday, 5th January 2009

Cameron's plans crash into Brown's debt mountain

Fraser Nelson 1:58pm

Like James, I applauded Cameron's tax-cutting plan - the right cut, in the right direction, for the right people. But there is one slight hitch. It is promised only if there's an election this year. The 2009-10 budget starts in April, by which time Cameron probably wont be in power. If there's an election next year, as is more  likely, then the plan will not materialise because there won't be the money. All these headlines that he hopes to generate will be for nothing.

The Tories don't say so in terms. But I asked Cameron afterwards if his tax cut offer is valid in 2010-11 when he's more likely to be in power - and he answered that he can't tell what the public finances will look like by then. That sounded like a 'no' to me.

The reason is that Brown would increase spending by 2 percent in 2009-10, which the Tories would halve and, therefore, do the tax cut. They can't do this from April 2010-14 when the average spending penciled in is just 1.2 percent. And as Cameron himself said in the press conferece, a "1 percent increase in spending sounds reasonable to me". Given that he wants to increase health, international development and school spending it will be incredibly tight.

All this isn't a criticism of Cameron: it's testimony to the mess Brown has left him in. Any British Prime Minister will from 2010 have only two choices: cut real-terms spending, or run up a trillion-pound national debt. There just isn't a third way.

UPDATE: In Cameron’s defence, I’d add that all oppositions can do is give illustrative examples of what they would do differently if in power now. So while Cameron’s policy is a hypothetical, a what-if, he can’t do much more. Cameron is right to say that the 2010-11 balance sheet will be anyone’s guess, so he can’t make projections given that it will be redrawn by this year’s Budget if not before.

But CoffeeHousers are right to jump on the fact that Cameron intends to increase state spending from what he inherits. This is very significant, and means there simply won’t be the scope to promise anything much in the way of tax cuts in 2010-11 onwards, when state spending is growing at a near-zero rate. Plus, from what Cameron said today, it seems that defence is joining health, schools and international development as areas where there would be real-terms spending increases. By my maths, this means he’d be borrowing a trillion pounds too by 2013/14. That’s if we can find folk to lend to us the £430bn, given that we don’t have a repayment plan. If not, then it’s back to the drawing board – for everyone.

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geoff

January 5th, 2009 2:21pm Report this comment

You cant really say its a terrible mess to have to choose between spending and tax cuts. That has always been the case.

Cameron wants to have his cake and eat it.

He wants to argue for a smaller state but then say the only way to get there is through sharing the proceeds of growth and where there is no growth there is no way of getting there.

His argument is non-sensical. If he believes in a smaller state, lets just make the cuts to investment which would never have been made in the first place if he would have been in power sooner.

Johnny Fiston-Hewes

January 5th, 2009 2:21pm Report this comment

So basically barring an election in the next few months this is a headline-grabbing con.

I understand your defense of Cameron at the end there but if he was being honest he would have mentioned the massive caveat.

Janet Daley attempts to take the moral high ground for the Tories in the Telegraph today but surely this announcement by the Tories would make Mandelson proud?!

DIS WISS

January 5th, 2009 2:40pm Report this comment

Why does anyone support anything G.B.says? His nauseating, deluded, self-important rhetoric is sick-making.
Did anyone see his ghastly performance on the Andrew Marr
show ? He needs to retire..NOW.

PP

January 5th, 2009 2:48pm Report this comment

Seems that browns new 100,000 jobs are in the governmetns 'spam the blogsphere' department.

Reducing the burden that is the public sector is a strategic policy, identifying the precise areas that are to be impacted and in what order are obviously tactical decisions that can only be valid based on the current situation.

If the situation changes, then the tactics may need amending -- however the strategy is unchanged.

Trumpeter Lanfried

January 5th, 2009 3:26pm Report this comment

Do I understand that Cameron is still contemplating an INCREASE in government spending? If so, I despair.

Andy

January 5th, 2009 3:26pm Report this comment

All the more reason to push for an election asap, I would have thought. If we don't, we're in for even worse times than currently!

Tim Carpenter LPUK

January 5th, 2009 3:36pm Report this comment

"then the plan will not materialise because there won't be the money"

That is the biggest flaw with Tory policy - the inability to make serious cuts in spending. It has to be done, but Cameron has blinked.

FAIL.

Lyn

January 5th, 2009 3:41pm Report this comment

Please repeat ad nauseum 'Brown's debt mountain' as it is in no way anything to do with the Conservatives. The communist/socialist culprit should be put in the stocks permanently.

wiggins

January 5th, 2009 4:27pm Report this comment

I think a good ploy for parents, would be to put a picture of Broon over the fireplace. This would keep the wee uns away from harms way.

Paul B

January 5th, 2009 5:13pm Report this comment

I`m beginning to hope that the UK has to call in the IMF so that spending cuts can be forced on governmment.

However if Dave, can only make promises for the tax cuts he would make if in power for the coming fiscal year, surely the same applies to his spending commitments. Although, now he promises to increase spending , once in power , he could always backtrack and say now that hes seen the books "cuts" have to be made. Blame it all on Brown, which would be true. Not entirely honest with electorate, I admit, but why should he (DC) be totally transparent at this point. Brown ain`t, so why should DC tie his own hands behind his back.

TGF UKIP

January 5th, 2009 5:13pm Report this comment

Fraser, Cameron has to nail Brown on debt and he has to nail the media too. That means he has to get down get dirty and spell out the figures.

At the moment all he does is say we've got the biggest debt in the world while Gordon says the UK is better placed than any other economy to increase its borrowing and he then quotes figures as he did on Marr yesterday and given that the polls consistently give Gordon a lead on the economy it would seem that Joe Average believes Gordon not Dave.

He has got to specifically accuse Gordon of bent accounting and tell Naughtie, Marr & Co that they've got to stop letting all Gordon's porkies go unchallenged. No use us lot just whingeing about media bias when Dave refuses to challenge them.

This is going to be an economy election and the Tories have a Shadow Chancellor who a large chunk of the public, press, and even a goodly chunk of this Tory website, have tuned out and a Tory Leader who won't/can't do figures. (I noticed again on Today he didn't mention a TRILLION and £40k per household - Labour wouldn't just be saying it they'd be chanting it!)

And yes, Trumpeter, Dave is STILL on about increasing spending. To do otherwise would be to completely nullify his Heir to Blair positioning of the past three years.

The next set of polls are going to be very interesting.

Polly and Alice's mum

January 5th, 2009 6:03pm Report this comment

I notice that in today's press a mention of DC's plan to help savers and pensioners. Then a little bit later we have Gordo, our Dear Leader, saying that he hopes to help savers and pensioners.
What are the opposition supposed to do??? Whatever they suggest to help us all, nulabour steal.
(At least with Gordo, you know that actually NOTHING will be done - but tell that to the masses who only think about the footie and where the next pint is coming from).

TGF UKIP

January 5th, 2009 6:58pm Report this comment

Fraser, it was always an absolute disgrace that the Cameron Tory policy, until now, was to be quite willing to chuck an extra £28bn down the bottomless pit while freezing spending on the Armed Forces.

But seriously, don't you ever despair? David Craig wrote "Squandered", you write very sensible articles for the fanzine like the one on 15th November and partially sensible ones like last Friday's (why on earth do you lionize Hilton so, when he is the primary architect of the Tories basic current problems?) but both you and David Craig may as well have earned your money by writing scripts for some worthless soap.

As for ringfencing "International Development" I doubt that anything could more accurately display Dave's contempt for the average small "c" conservative Brit.

Can I remind you of the heading for your piece of 15th November:

"Fraser Nelson offers a guide to paying for them (tax cuts): a programme of spending cuts that would preserve core public services but shave the fat of the Brown years. ALL THAT IS NEEDED IS POLITICAL WILL." (My caps)

When is the penny going to drop with you, Fraser, on just who and what Cameron really is?

Athesius the Facilitator

January 5th, 2009 7:14pm Report this comment

Trumpeter and others who are bemoaning the fact that Camerons plan is to increase public spending should not worry. He HAS TO otherwise we would be in bigger trouble than we are already He will increase it (to start off with) but at a lower rate than Labour and he will then start to shave it down as he moves further in to the 5 year parliament. Come on it would be impossible to just walk in and slash and burn.

As for Janet Daley. I read her column today and in one paragraph she critices Cameron for "rambling on" about his policy outlines and in the next sentence says he isn't putting any detail out about his policy's. For Goodness sake give the man a chance. Lets face it the whole press corps should be gunning for Brown for spending all his time worrying about what the Tory's are doing instead of worrying about the country. The man is a disgrace.
As is the news reader who interviewed George Osborne on sky news who implied that his background made it impossible for him to govern the country. What a buffoon.

Fergus Pickering

January 5th, 2009 7:57pm Report this comment

Nothing wrong with thinking about the footie and the next pint. Trust in God and take short views. That was Sidney Smith a long time ago. Remember that the only certainties are death andf Taxes. And cheer up!

Verity

January 5th, 2009 8:33pm Report this comment

Cameron should be constantly using TGI UKIP's phrase "Enron accounting", referring to the 10 years that Prudence was in charge of the Exchequer. He should be referred to as the Enron Chancellor over and over again until it sticks in the electorate's brain. The Conservatives should be saying that at least the perpetrators of the Enron fraud went to prison.

nick

January 5th, 2009 10:34pm Report this comment

Why increase spending on International Development? Wouldn't some cuts there be quite desirable, for example not giving an increasingly wealthy India money from British taxpayers to spend on nuclear weapons?

TGF UKIP

January 5th, 2009 11:57pm Report this comment

Verity,afraid I can't really claim authorship of "Enron accounting", not sure where I picked it up. Probably from some much more clever and original Coffee Houser who should rightly get the credit.

I'm afraid too that "Enron accounting" would have no political traction among the broad mass of Brits. The collective memory ain't that long and it was predominantly the American psyche that was most affected by the Enron episode.

There's gotta be a phrase though.

Browns three card trick accounting?

Browns pick and mix accounting?

Browns smoke and mirrors accounting

Browns Del Boy accounting?

Could this be another Coffee House competition?

Verity

January 6th, 2009 1:52am Report this comment

Nick - Why on earth should a country impoverished by bad economic management and insane levels of "immigration" (to a country which has already been settled for 2,000 years) be giving money to anyone? At all?

The Africans are a dead weight and should sink or swim. I'm sick of them.

I would be surprised if India was asking for any money, given that this is a country that is jammed with brilliant minds, many of them entrepreneurial.

India will spend its own wealth on nuclear weapons, if it deems it wise, Nick, and one day you may be down on your knees thanking them. Less of the condescension, if you please.

hadrian

January 6th, 2009 12:47pm Report this comment

The choice is stark- cut or spend- and at some point someone's going to have to bite the bullet and say 'cut!' as any good director would when the filming is going awry. Either that or it'll be forced on us by economic reality and outside lenders who'll agree to shore us up- if any can be found!
Cameron'd have had an extra punch at Broon if only he'd been frank enough to admit it all hinges on the mess Broon leaves us. Another opportunity stupidly missed.

Hysteria

January 6th, 2009 2:07pm Report this comment

"Del Boy accounting" should resonate I think.....

Verity

January 6th, 2009 2:57pm Report this comment

TGE UKIP - Very elegant of you, I'm sure. I do agree that Enron doesn't have the resonance in Britain, though, that it does in the United States.

Del Boy has resonance. The only thing is, he's a lovable rogue. Trotters Independent Traders might work somehow, though.

Something might be made of "clunking fist" - as in, Brown, in his arrogant ineptitude, drove his gret clunking fist through the accounts of the millions of savers. Or similar.

The point, which you so ably made is, the Tories must make this implosion of the British economy appear to have been caused by Brown's economic policies. His chancellorship was built on his fantasies. And now he's the South Sea Bubble prime minister - presiding over a gigantic bubble of ... nothing.

This is simplistic, but these are thoughts to kick-start thinking in others with the ability to execute them.

Fairly or unfairly, this roiling mess in Britain has to be laid at his door and his ineptitude - and arrogant refusal to accept blame - pointed at constantly. Banged away at, day after day.

David Cameron lacks the killer instinct.

Labour was scared to death of William Hague and they fought so dirty and with such low nastiness that it turned the stomach. And they succeeded in getting rid of him as Leader, to the cost of Britain.

We need someone who can smash that ball back over the next.

Verity

January 6th, 2009 2:59pm Report this comment

Actually, after I sent my post of a nano-second ago, I think Del Boy acounting might have traction.

hadrian

January 6th, 2009 4:02pm Report this comment

Well, Verity, you provide the answer in your post, don't you? Simple- if Cameron flunks it we need to bring back Hague.

Culzean

January 6th, 2009 5:04pm Report this comment

Interesting prospect Hadrian. At least he's read the Bible according to Thatcher, and seems both interested in, and capable of doing something with its content.

Cameron needs to find his spine and take a stand, not just re-word Broon's messages the whole time.

Verity

January 7th, 2009 10:17am Report this comment

I don't know that I want Cameron to find his spine, Culzean. He might come up with some more destructive ideas, like his A list. If the round of applause in the HoC for the rat Blair took the wind out of the party's sails, the A list served to demoralise them further. Dave's a socialist. Maybe he could cross the floor and take the Labour leadership away from Gordon Brown, and get out of our hair.

David

January 30th, 2009 10:40am Report this comment

"the Tories must make this implosion of the British economy appear to have been caused by Brown's economic policies"

But how can they do that when most people understand that the causes also include a global recession, the collapse of the financial sector that was deregulated in the eighties and the credit-addicted, property-speculating, finance-dependent economy he inherited from Ken Clarke?

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