Nearly a third of the audience at last night’s Spectator Battle of the Chancellors debate arrived not knowing whether George Osborne’s plan was working or whether a plan B was in order. It was all to play for, and the six speakers attacked the task with quite some gusto. Former Labour Chancellor Alistair Darling kicked off the debate by looking back to his own time in the Treasury, telling the audience that this was a crisis of the banking system by using an alarming anecdote of a conversation with a senior banker in the midst of the 2008 crisis.
‘He said, “I just want to give you some confidence, some reassurance: my board met last night and we agreed from now on we will only take risks we understand.”‘
Darling contrasted his own response to the crisis – ‘back in 2009, our economy was growing and it grew right into 2010’ – with the government’s approach, arguing that ‘austerity on its own isn’t working: we have not got growth’. The government ‘has to step in when the private sector won’t’, he said, arguing that public spending should be cut once the growth had returned, not beforehand.
But Tory MP Jesse Norman, opposing the motion ‘George Osborne isn’t working: we need a Plan B’, congratulated Darling for ‘his attempts to rein in’ Gordon Brown, and disputed the idea that the crisis had come purely from the banks. While supporting the chancellor’s plan as ‘absolutely the right one to take’, Norman’s speech was not a cheery one, saying this kind of recession will take of the order of six or 10 years to come out of, adding that he wouldn’t expect a return to proper, healthy growth before 2014 or 2018.
Former Liberal Democrat Treasury spokesman Lord Oakeshott took a rather dim view of Norman’s picture of the economy, teasing him that it wouldn’t sell well at the ballot box in 2015.