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SO, the Government proposes to do what we the consumers have been told precisely not to do - to borrow and spend more.
There is more than a certain irony to Gordon Brown's solution to the recession. Perhaps the Flash Gordon likeness really has gone to his head. The dour son of the manse has ditched his long-time girlfriend Prudence, with her stoic belief in chastity, and gone for the full rakish bachelor look.
He claims not, of course - he's still promising not to do anything untoward - but this is a very different Brown. Having said "we will never return to the old boom and bust", his response to being seen to have told a big porky is to push it to one side and come out fighting.
Brown's old fiscal rules, in particular the "golden rule" that he would only borrow to invest over the economic cycle, have been scrapped. Flexibility, rather than rigidity, is the new Treasury mantra.
The Prime Minister clearly believes that newfound relaxation should extend to the Bank of England. He hasn't said as much but it's obvious that he believes the Monetary Policy Committee should cut interest rates. Inflation, he pointed out yesterday, is coming down and that "gives scope" to the Bank to make a decision about rates. Brown clearly hopes that rushing forward government infrastructure projects and propping up the banks, coupled with lower rates, will do the job. He's also determined to reduce expenditure in other areas so Whitehall departments have been told to look at their budgets and he's launching an assault on incapacity benefit. The fact that he could have done this at any time in the past 11 years and chose not to do so is ignored.
That's the problem. He's not attacking the downturn from a position of strength - the public finances are not in great shape, government debt was already high. He can blame the failure of the markets, hence the need for a spot of Keynesian pump-priming, as much as he likes. But his strategy is fraught with risk. There is no guarantee of it succeeding and what then? The Government is left with a mountain of borrowing. Far better, surely, to have been going into recession with a lean book - that would have given him the room for manoeuvre he craves.
Brown may be presented as a super-hero but the costume is unfetchingly tight.
Reader views (5)
Crash Gordon.
- Get Shorty, Bognor, 27/10/2008 20:23
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The count needs more money
- John, London, 27/10/2008 19:25
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I know Gordon would prefer to be known as "Flash" Gordon, he thinking it flatters him, as a man of action but, as he has brought Britain to its knees with his borrow and spend policies based on spin and bluster, I prefer he be known as "CRASH" Gordon as his ability to perform miracles vanished a while ago.
- Albert Hall, Hove England, 27/10/2008 17:34
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How much of this "pump priming" tax payers cash will leave our shores as money spent on goods and services provided by foreign companies operating here or by UK workers' wages spent on foreign good and services? It is very hard to "buy british" these days.
- Steve, havering, 27/10/2008 15:06
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What the UK now needs is wealth creation not more wealth destruction at the hands of Mr Brown. The Brown Government has placed an unsustainable burden on the Private Sector, which unfortunately Mr Brown fails to recognize. Unfortunately this policy will extract a high price from many innocent victims before emerging transparency eventually holds him to democratic account.
- Brian Edmonds, Farnham UK, 27/10/2008 11:15
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