Peter Hoskin

Johnson’s admission puts Darling on the spot

Johnson's admission puts Darling on the spot
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As an addendum to Fraser's interview with Alan Johnson in the latest issue of the mag, it's worth flagging up this exchange between George Osborne and Alistair Darling in the Commons earlier.  Osborne picks up on Johnson's claim that we've got to be prepared for two more years of recession:

Mr. Osborne: Either the Chancellor knew what was going on and did nothing, or he was entirely ignorant, and neither is much of a defence. Is not the net closing in on the Prime Minister and the Chancellor? Their accomplices are resigning, their alibi that no one knew what was going on has been blown apart, and their fingerprints are all over the mistakes that were made during the age of irresponsibility.

Is there a coherent view in the Cabinet about how long this recession will last? We know what the Treasury's forecasts are, and we know what the Chancellor says about the economy recovering halfway through this year, but today the Health Secretary has said that we need to be ready for two years of recession. Is the Health Secretary expressing the collective view of the Government on this issue?

Mr. Darling: In relation to the FSA, the hon. Gentleman's claims are frankly ridiculous. Appointments were made in the normal way, which is a great deal more open than for some of the appointments that were made in the past. At the time, there was no reason not to accept the recommendations in relation to Sir James Crosby.

On the broader economic picture, as I have said to the House on a number of occasions, there has been an extremely sharp downturn not just in this country but in countries right across the world, and we can see the effects of that. I am clear, though, that if we had followed the hon. Gentleman's advice and done absolutely nothing to prevent the full effects of the recession from being felt, the impact and the long-term

damage to this country would have been substantial. I believe that the action that we have taken is not only justified but will ensure that this recession will be shorter and less painful than would otherwise be the case. I am sorry that the Conservative party continues to take the view that there is absolutely nothing that they are prepared to do to help people and businesses in this country.

It's yet another example of the pit the Chancellor has cast himself into with his stupidly optimistic forecasts in the PBR.  The stock get-out clause now seems to be that the "global" problems impinging on the UK economy have (unforeseeably) worsened since then.  But I wonder whether that will wash once it becomes clear that other countries are beating us in the race to recovery.