Finally, the right line from Prime Minister’s Questions – and it’s one that Gordon Brown will fear the most. “What people need now is more money in their pockets. He could deliver big tax cuts for people who desperately need help”. It was from Nick Clegg. You can argue – as I do – that the Liberal Democrats’ proposed tax cut is paltry. But the rhetoric and positioning is precisely right. It’s a binary distinction: Brown trusts the state, and wants to spend his way out of a recession. Clegg is saying he trusts the British public, and wants to stimulate the economy by letting them keep more of their own money. When Brown retorted that the “Liberal Party” would somehow damage the British economy by taking out £20 billion of spending, it sounded irrelevant. Clegg has astutely judged that the Tories are missing an open goal because of internal struggles with the concept of tax cuts. It’s a no-brainer in the current environment – has anyone see Barack Obama’s website recently? Obama’s figures, like Clegg’s, are paltry if you add them up. But the positioning is right. Clegg is showing the Tories how to do it.
David Cameron’s strategy at PMQs was to keep pushing Brown on whether he’s accepted he failed to eliminate “boom and bust”. The idea is that Brown, being Brown, will never admit to any failing and he’ll be left looking ridiculous. It worked. He resorted to his fake litany: that he “created” three million new jobs, etc. He claimed that if he’s taken Cameron’s advise “we would not have nationalised Northern Rock” – interesting that the n-word is now used freely. No more pretence about “temporary public ownership”. The Tories, of course, would argue that they’d have faffed less and encouraged the Lloyds takeover so it would never have come to that. Anyway.
Cameron is getting better at expressing the downturn in real terms: “120 homes repossessed very day, 1.2m going into negative equity”. He needs to add 1,500 redundancies a day, wages being cut, poverty rising etc. Then he gave his payoff on boom and bust. “If he can’t admit what he got wrong in the past, why should anyone listen to him in the future?”
Then Brown reeled off the assertion which sent me into apoplexy yesterday – affecting to “explain” it all to Cameron with his fake SARS virus narrative. “The cause of the crisis we are facing started with private banking sector, if he doesn’t understand the problem he won’t be able to come to a solution.” This was the perfect chance for Cameron to say, in hushed tones, that the it is the Prime Minister who has not started to understand the character of his own downturn. Hasn’t he realised, yet, that he flooded the British economy with dangerously underpriced debt so British households ended up literally the most indebted in the world? Hasn’t he yet drawn the connection between the trebling of UK household debt to £1.5 trillion, and Britain’s vulnerability to the downturn? Hasn’t he realised that it is because he filed to repay debt that UK state debt is equivalent to at least £67,000 a household? Hasn’t he drawn a link yet between his custody of the public finances, and the plunging pound? Hasn’t he grasped that his failed regulatory system made British banks the most over-extended of any in Europe apart from Iceland? Which part of all this does the Prime Minister find so hard to understand? Would he like to hold a private seminar, because – in a spirit of bipartisan fraternity – it’s rather important for the country that he understands what has happened.
Okay, enough of my reverie. Cameron missed this huge chance to give an alternative Conservative narrative to the crisis and simply said: “The Prime Minister says he wants us to listen. We’ve been listening for ten years about his fiscal rules. He has stood there and lectured us about his fiscal rules,” yada yada yada. Cameron is teeing himself up for the Mais lecture where he thinks (wrongly, I understand) that he’ll tear up the fiscal rules.
Brown went on to make some good attack points. The Tories were daft to focus so much on borrowing – it’s inevitable in a recession, the question is whether you use the deficit to spend or relieve taxes. He later argued that George Osborne’s “fuel duty stabilised means now, automatically, the price of petrol would be going up by 5p a litre. He cannot deny it, and this is why people don’t trust the judgement of the Conservative Party.” Osborne argues the idea is at the consultative stage, so the 5p figure is bogus, but Brown does have a point. The flip side of the Tory idea is that it stops fuel prices collapsing when oil prices halve, as they have. This is why, as far as I’m aware, no country in the world has a “fuel duty stabiliser” process.
All told, this showed just how far the Tories need to come on the economy. I argue in my political column tomorrow that if Osborne wants to ruly redeem himself, he needs to close the gap between what’s he’s saying, and what’s needed. That gap was painfully obvious at PMQs today, and we have Nick Clegg to thank for that.
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