Tories, debt and the Unholy Alliance

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A well-respected and highly intelligent friend of mine was recently extoling the virtues of this article by Seumas Milne. Reading it reminded me of why I have stopped reading the Guardian. Included within this article are some very interesting points. It also commendably seeks to bash the Tories and the CBI for their views on the recent economic Armageddon. Regrettably, the article also includes a truly bizarre attack on the Bank of England and tends to use misinformation rather than analysis to make its arguments.

I have been angered by the Tories attempting to blend consumer debt and budget deficit into this one great evil, “debt”.  Worse still the pair are put up as the cause of the banking crisis. This idea is too stupid to deserve comment. Correcting all the mistakes in this article would be beyond the scope of this post. Some observations are in order.

Suggesting that the Bank of England is a natural enemy of Labour budget deficits is nonsense. The Central Bank is responsible for financial and monetary stability. Large budget deficits present a danger to both. Mervyn King’s comments to the Commons Select Committee were balanced, reasonable and justified. He did not blame the Government for the deficit and did not even call for it to be reduced. He merely stated the blindly obvious fact that a series of fiscal stimuli could increase the budget deficit and might pose a risk to financial stability.

bank-of-england

The article foolishly then tries to discredit Mr King by accusing him of ‘presiding over the financial disaster’. The author is only a decade out of date with that comment. The ‘financial disaster’ was within the regulatory competence of the FSA and has nothing to do with the Bank of England.

Suggesting David Cameron plans to cut the pay of nurses, firefighters etc is ridiculous. I have no doubt that a Tory Government would propose a range of damaging cuts in the public sector. Suggesting they would cut the pay of key workers totally discredits his argument.

I cannot remember the last time I was so angered by a pro-Government article. It is vitally important that we are prepared to stand up for Labour’s handling of the crisis. We must not drift into the kind of misinformation which punctuated this article. It is too easily open for challenge and undermines our efforts by giving the appearance of desperation.

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2 Responses to “Tories, debt and the Unholy Alliance”

  1. Jako Says:

    But of course Seamus Milne is quite mad. Just look at all the articles he writes supporting the “resistance” in Iraq and Afghanistan. Goes to show what damage going to private school and studying PPE at Balliol does to you.

  2. Jako Says:

    *Seumas Milne. Crazy name, crazy guy!

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