Friday, June 15, 2012

Tory Doublespeak on Debt

You might have noticed, as I have, that whenever David Cameron or George Osbourne are challenged on economic policy by Labour, they consistently ignore the question at hand and revert to the same lines about "the mess we inherited from the party opposite" or "Labour are the only people who think the answer to a debt crisis is more debt".

Usually the use of comments such as these is a reliable indicator that the person speaking doesn't have an answer to the point being raised, so they seek to undermine the credibility of the person asking the question. This is standard practice for politicians of all stripes and always has been.

However, there's a little more to this diversionary tactic at present, as it actually contradicts the Government's own economic policy.

In the news this morning, it was announced that the Government, in conjunction with the Bank Of England, will provide billions of pounds to cheap credit give to banks on the understanding that it is lent to companies and to consumers in the form of mortgages. link

This sounds like it might be a workable plan, but as the BBC's Robert Peston says, companies and households that are financially viable are unlikely to want to burden themselves with further debt in the current climate, leaving only the insolvent (or almost so) who are desperate to borrow, and the banks don't really want to lend to them anyway.

So we now have a policy which is not only impractical and likely to fail, but one that goes directly against the Governments own rhetoric.

Never again let the Tories say "Labour are the only people who think the answer to a debt crisis is more debt". The Tories think that's the answer too now.

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