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David Cameron's economic plans have been branded “wildly dangerous” by a former senior Bank of England official.
Economist David Blanchflower, former member of the Bank's monetary policy committee, said the Tories would risk plunging Britain into a deeper recession by turning off the Government's measures to stimulate recovery.
In his conference speech at Manchester, Mr Cameron said quantitative easing should end “soon”. Mr Blanchflower called the stance “bizarre” and told the Daily Mail that calling off stimulus too early would snuff out recovery. “This is the most wildly dangerous thing I have seen in 100 years of economic policy in Britain,” he added. He said the Tories showed “no understanding of economics”: “It could drive the economy into depression.”
The Bank has held interest rates at their 0.5 per cent record low. So far it has created £146 billion of fresh cash, buying up debt in the form of government and corporate bonds. Mr Cameron said: “If we spend more than we earn, we have to get the money from somewhere. Right now, the Government is simply printing it. Sometime soon that will have to stop, because printing money leads to inflation.”
Chancellor Alistair Darling said: “If we stop supporting the economy now it would crash.”
Reader views (21)
'How short memories people have. I don't recall anyone questioning the inexperience of Tony Blair or Gordon Brown in the run-up to the 1997 general election'.Ian Gilbertson.
Are you refering to your own memory? I remember well the Consevatives suggesting that Labour were 'sending a boy to do a mans job' in the lead up to that election. I expect you have also forgotten, ten percent unemployment, dozens of people sleepng in shop doorways in every High Street, cardboard city, crumbling schools and hospitals, rising crime levels (really rising then, not just opposition picking holes in the statistics), long NHS waiting lists, senior party members serving prison sentences.
- Adrian, Dorking
I don't recall Blanchflower forecasting this collapse. He was another figure who had no idea how over exposed the derivitive market had become especially the Credit Default Swaps.
In fact had he even heard of them and how they were traded?
- Tojo, Hythe, Kent
Yes people have short memories, in 1993 I was admitted to a holding ward in a major London Hospital as I required an urgent heart bypass operation. Why a holding ward the reason was waiting times for this oeration were months if not years and by being in the holding ward I would get my operation if a slot became vacant & the most likely change of that would be if someone due to come in for an op died before they could keep their appointment. I also remember my surgeon coming to see me late in the evening the day before my op and him saying that he was expected to act like GOD because operating slots were a scarce commodity and he had to choose from those needing an urgent op, for a better phrase, who lived and who would be left to possibly die. As he put it he did not join the NHS to play GOD he joined to save lives. Cameron promises change, so the new saying is "leopards do change their spots" well I am not a Labour supporter but there is a lot to be said for "better the devil you know" and at least Labour are doing their best to do something to deal with the credit crunch whereas the Consrvatives were not prepared to do anything. be warned, remember the Thatcher years and who were the winners and losers, the conservatives proposed policies could take us back into recession which won't worry them because they and their rich cronies are so well heeled it will probably mean they have to do with one or two less bottle of champagne a week.
- Jim, Bromley England
Tune into Youtube and see the videos on how the International Monetry System really works for a real eye opener. Basicaly ' debt' (ours) is good for the Rothchilds ( mates of Mandleson ) and their international cohorts but not for the people of the world. Any economic stratagy has to include the end to borrowing and self-sufficiency and control of our own Banking system.
- Clif, London
David Cameron, yesterday, hammered the final nail into New Labour's coffin, and they know it.
I mean, who needs bottler Brown, the guy who wouldn't call an election because - wait for it - he knew he would WIN!
- Ted, London
How short memories people have. I don't recall anyone questioning the inexperience of Tony Blair or Gordon Brown in the run-up to the 1997 general election.
I support the Tories for one simple reason: I think the UK is in a far worse position now than what it was in 1997. If Tony Blair and Gordon Brown had actually solved problems they would be reaping the reward of their policies.
- Ian Gilbertson, Newcastle
George Brown and his government have made a mess of the UK and it is only right that they should go. The Conservatives must be given the chance to sort things out before it is too late. The conference showed they have the ability to do it.
- Jkr, Glasgow Scotland
There is a rumour going around Whitehall that George Osborne will be forced to wear 'L' plates for six months. It is no good looking to Cameron to help, he was Norman Lamont's adviser leading up to Black Wednesday and was sacked by Kenneth Clarke when Lamont was dropped.
- A Milne, Kensington England
Cameron at the Conference looked brittle and a man that might breakdown once real decision-making is expected of him (should he win). I suspect the criticisms of his thinking on the recession and economy are generating self doubts. He seemed to be trying to convince himself he could hack it.
Worldwide there is agreement that Gordon Brown got it right (and Cameron got it wrong). The Tories didn't see the recession coming (except with hindsight). They are pandering to their privileged chums (inheritance tax, return of hunting and a freeze on pay that hits the worse off to a greater extent than the privileged). Osborne says we are allin this together! Reminds one op Orwell's "All animals are equal but some animals are more equal". The underlying Tory mantra.
- Colin Frazer, Cardiff, Wales
Is this the same person who could have done something to stop the banking disaster. These people sat by and let our banks not be properly monitored, hence the banking crisis. Now he has the audacity to judge the Conservative's plans. As for Darling - I suggest he keeps quiet. All Labour have done is brought this country to its knees.
- Jk, Kent
I continually ask myself if things would have been different of the Conservatives were in power and the conclusion I come to is no, their policies are not particularly different and with their free enterprise perspective perhaps things would have been even worse.
All this finger pointing is simply pure politics.
These calls for greater regulation is politics under the Conservatives they would have been just as soft if not more lax to suggest anything else is simply fanciful.
What would the Conservative solution have been - probably the same.
It surprises me that the people come onto this forum and express their exasperation at everything that is happening and pretending that the Conservatives would never have got into this are simply living in cloud cuckoo land.
To call Gordon Brown a moron is totally ridiculous - he is perhaps one of the most intelligent politicians of his generation - why don't you just say you don't like him ?
- Paul, West London
Would that be David Blanchflower, a former member of the Bank's monetary policy committee, who presided over policy that has bankrupted this country?
- Frank, Home Counties, England.
CANT STAND BROWN AND HIS CRONIES BUT THERE IS SOMETHING ABOUT CAMERON I DONT TRUST HE IS TOO SMARMY PITY HAIG IS NOT THEIR LEADER
- Anon, leicestershire
So was the position that we now find ourselves in achieved by Mr Brown with or without Mr Bartholomew's advice ?
- Peter Haldane, Chelmsford
I find it quite astonishing that a Bank of Enland official does not understand economics. Printing money, or "quantitive easing" (what a stupid description anyway) has never been a way out of trouble, it's the way to get into a whole lot of trouble. With people like this looking after the Bank of England is it any wonder the economy is in such a mess!.
Blanchflower's remarks do in fact sound a little political to me.
- Steve, London
Economists are singularly incompetent at predicting the future (including our, ahem, great leader) and are often dispersed in their opinions. One swallow does not make a summer.
- Da, london
The Tories' credentials with regards to economic policy have never been in doubt - over the past 100 years they have consistently left the country's finances in a better state than what was inherited from the previous Labour government.
Blanchflower is notoriously Left wing and his comments are more to do with his politics than his economics. The US economy is improving even though only 10-15% of the stimulus package has been applied. This is because the US suffers far less government interference and the private sector is better able to adjust to changing economic circumstances than a lumbering bureaucratic and wasteful government.
The faster the public sector bureacracy in the UK shrinks and is replaced by private enterprise, the better will be the financial health of UK households and the government's coffers. Cameron knows this but Labour still haven't see the light.
- Paddy, Belfast
Blanchflower up for a quango nice little earner from his Labour mates is he?
Since when did the economics of the Weimar republic and Zimbabwe become something to emulate?
Printing money is the REAL madness. It devalues the purchasing power of the pound in your pocket. In effect it's the state stealing your cash, savings, and everything you own.
Yesterday I read about a 180 trillion zim dollar note that had been stolen off a pub wall. No sweat cos it wouldn't actually buy a bottle of wine - it's worthless. Now scroll forward a few years under Labour money printing and that could easily be a million pound note - worth feck all. You happy with that? Cos I'm not.
Whats needed is some of Gordon Clown's famous prudence. Cut back the profligate state spending. You don't live beyond your means. If you have a pound in your pocket you don't keep buying Ferrari's on credit. Sooner or later it's going to all go horribly wrong and for Britain thats already happening. We are borrowing 500 million pounds a DAY to keep Labour in power. It's all got to be paid back with interest. Are you comfortable with that pricey cos it scares the bejebus out of me.
- Ethan, uk
Blanchflower is a discredited yank and should stay over there, rather than carping from the sidelines. If the Conservatives get in it will be June next year - if we are still following Quantitative easing by then we really will be in trouble. Its time to tighten policy NOW rather than wait for hyper inflation to come through.
- Nickspurs, london
In my view, David Blanchflower is a complete fool - he, thankfully, is no longer employed by the BOE, and no doubt this rankles him somewhat, so best he keeps his trap shut on matters relating to the next Prime Minister of the UK.
Perhaps, for example, he might like to take up sea angling (without a boat?).
- Ted, London
It appears that Dizzy Darling does not know the UK economy "colloapsed" the day Labour took office 12 years ago.
Any idiot can print money they do not have. Any idiot government can spend billions they do not have.
WHO will be repaying the national debt currently at £1,400,000,000,000.00?
The children of today and their children will still be repaying Labour's debt in 30 years time.
- Reuben Camara, Morecambe Compound, EUSSR
