Gordon Brown says he “regrets” George Osborne’s “partisan talk” warning that we may have a sterling crisis on our hands – his implication being that the Opposition should be supporting him, the Father of the Nation. In fact, there has never been a greater need for full-blooded, disrespectful, combative, full-on scrutiny of what he says.
I suspect the main reason Brown “regrets” what Osborne said is because Osborne is right. I haveblogged before on what should be known as the 2008 devaluation of sterling. It gives the lie to Brown’s theory that Britain has a strong economy well-placed to fend off this “contagion” from America. That the pound has fallen so far is an eloquent comment on the health of our economy, relative to others.
I am pleased that Osborne believes, as I have long argued, that Brown may well adopt a “scorched earth” policy and wreck the UK public finances to give the Tories a worse inheritance and perhaps minimise Labour’s defeat. Brown’s dogmatic refusing to cut wasteful spending has set us on course for an 8 percent deficit in the 2010/11 – likely to be the first year of Tory government. And any “fiscal stimulus” he’s talking about would be on top of that, taking us into 1970s bailout territory. An act of economic vandalism could be about to take place here, and the Tories are not just entitled but obliged to sound the warning. A plunging pound is the inevitable consequence of that – with all its repercussions for the cost of lending.
And since when was there a convention that Opposition leaders should not discuss the currency? Unlike the Bank of England or the Chancellor, they can’t “talk it up” as they are not privy to any special information. They are commentators, like the rest of us. If the Shadow Chancellor believes the Prime Minister is embarking on a destructive economic policy with repercussions for our currency and our country, he must speak out.
I see today as potentially an important turning point for Osborne. He’s been a woose for ages. He was warned about the bubbling banking crisis long before Northern Rock went under, but didn’t sound the alarm as he didn’t want to be seen as a Jeremiah. Just six months ago, he also didn’t want to talk about deep recession because he thought it may rebound and he’d look daft. His caution has cost him dear. So he is pre-emptively warning about the next part of this Nightmare from Downing St: sterling’s collapse. As Brown prepares for a Pre Budget Report, with all the harmful consequences that could entail, Osborne has at last decided to play hardball.
I won’t be so premature as to say that Osborne is back on form. This may be a one-off. But it’s good to see him doing what he used to do so brilliantly – get right under Gordon Brown’s skin.
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