Nick Cohen

Battle of the Chancellors: hope v fear

Battle of the Chancellors: hope v fear
Text settings

At the Spectator debate on the economic consequences of Mr Osborne last night, Andrew Neil repeated JK Galbraith’s line that 'economic forecasters exist to make astrologers look good.' The impressive Conservative MP Jesse Norman countered with 'an economist is a man who knows 17 ways to make love to women – but no women'. Lord Oakeshott, I think, joined the mockery by pointing out that every forecast from the Office of Budget Responsibility had been wrong. Its consistent incompetence, its steady state of stupidity, its unerring unreliability, made it a surprisingly useful institution, however. Whatever it predicted you could be sure the opposite would occur.

How we laughed. But political commentators are no better. For we too make sweeping predictions about the result of the next general election as if we were clairvoyants who can know an unknowable future rather than mere hacks. Having denounced the sin of false foresight, allow me to play the hypocrite and commit it.

I was struck by the optimism of the left-leaning speakers in the debate — not just Oakeshott, but David Blanchflower and Alistair Darling. They were full of dynamism and hope. They wanted the Treasury to get out of the way and allow pension funds to invest in public housing projects. They warned that we can never cut back the deficit without growth, and only imaginative public action – not just direct government borrowing, incidentally – could create growth and, as a happy consequence, provide homes for the young and the power stations we need to stop the lights going out as well.

The right-wing speakers Jesse Norman, Fraser Nelson, of this parish, and Norman Lamont trumped hope with fear. I could feel and share the frisson of puritan self-disgust that ran through the audience when they described Britain’s massive personal and state debts. We went on a jag in the last decade, they said, and there was no escaping the hangover. The bond markets would no more allow us to increase debt than a doctor would allow a doctor to increase his alcohol intake.

Fear won the audience over, and it may convince the country to stick with the coalition at the next election. But Osborne ought to be worried. In their hearts, Norman, Nelson and Lamont don’t believe in his economic strategy either. They would cut spending further and lower taxes to create growth if they could. They too did not want to stick with the status quo as the longest period of recession and stagnation in 100 years drags on. Although I disagree with their solutions, it was to their credit that they did not want to just sit there and do nothing as Britain declined around them.

Everyone says that the ideal place to be in politics is in the centre ground. But unless the short run of economic good news continues, George Osborne will look like a man trapped in a motorway’s central reservation. Eventually he will have to try to escape by making a dash to his right or left. There is no guarantee that he won’t be mown down as he runs for it.