This week has marked something of a watershed in the British economic debate. The story
of the strike on Wednesday was not one of paralysis, but of resilience. There was an 85 per cent turnout in NHS staff; Cumbria council kept every office open as so few staff went on strike; Aussies
landing at Heathrow cleared passport control in record time, due to the large number of volunteers who were qualified with two days’ notice.
As I say in my Daily Telegraph column today, the union leaders
went rather quiet afterwards: they misjudged the mood of the country. As has Ed Balls. He is attempting what economists call ‘fiscal illusion’ – talking about tax cuts and more spending, but
not talking about the real and debilitating effects of debt, as though you can have one without the other. Balls is intelligent and forceful, but blinded by his ideology and bloodlust. His is
a great strategy for the wrong country. It may go down well in Greece, but in Britain the public know we’re midway through a massive contraction. Living standards are falling now, and will do so
for some time.
The irony is that Osborne is vulnerable. He promised a growth strategy — where was it? We have the worst inflation in Europe – why not mention it? Because Balls is uninterested in
anything that detracts from his simplistic, incredible narrative: that it’s all to do with cuts. Labour is no longer the Workers’ Party, no longer interested in the cost of living and other
day-to-day issues. It’s almost entirely funded by the unions, who now rely on public sector workers as they once relied on factory workers.
With Labour reduced to being a pressure group for higher state spending, it’s less relevant to the debate. As I’ve argued before, there’s not much difference between the parties’ fiscal position. But only the Conservatives are talking in a language which resonates with the public mood. Lucky old Osborne.
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