Watching Alastair Darling stammer through yet another Commons Committee today was not the confidence inspiring spectacle one might have hoped for. Once again he seemed unsure of his figures, gave evasive answers and didn’t really appear to be a man committed to his projections or decisions. He strikes me as a decent man and I have a great deal of sympathy for the predicament he finds himself in, but I do not believe he will be the man that leads our Country out of this mess.
Somehow Sterling rallied against the Dollar during this questioning. I feel really at odds with the market’s view on Sterling at the moment and I just cannot see how any confidence is being placed in what we are hearing.
Particular points I picked up today included;
- Darling acknowledged the importance of an “orderly withdrawal” from the strategy of Quantitative Easing. This is a sentiment I certainly agree with, but what concerns me is that any current planned “orderly withdrawal” will be based on discredited projections. Michael Fallon, who once more showed an assured command of the economic challenges facing us, made this point adeptly by revealing that the Government had promised to balance the budget by 2006 and had failed to do this. He then went on to ask how we can trust the current projections. Darling had no answer for this.
- The argument that our current travails are “a global problem” is increasingly hollow. As one MP pointed out the UK’s standing relative to other nations has been downgraded substantially. As much as Darling tried to argue this was not the case, this exchange ended in him being accused of being in denial. Again no response was forthcoming.
- With respect to borrowing the level of money the Government requires to fund the deficit, Darling was asked whether or not he believed this will be a problem in the current climate. He answered that he did not, but also did not offer any evidence as to why he felt this, other than “foreign investors and pension funds” will pick up the tab. Quite what we will do if he is wrong about this is hard to predict, other than an IMF bailout will likely become a foregone conclusion.
- Darling would just not admit that this latest budget represents a substantial cut in public spending in real terms. While I am in favour of this move, as I think it is a vital necessity, I am sure the Government would gain much credit by just being honest that this is what they have done. Not doing so only reinforces the impression that this Budget was little more than a flagrant attempt at electioneering, at a time when we can least afford it and are desperately in need of strong leadership.
Why can’t the Government just admit that they have made mistakes? The tripartite arrangement for overseeing the financial services sector failed, public sector spending is in urgent need of substantial reform and not enough money was saved during the 10-year “boom”. By denying these three basic facts, I think they are insuring that the Conservatives will stroll to a +100 majority at the next election. Whether or not that will be a good thing remains to be seen, as we haven’t exactly heard much substance from the Tories about what they would do differently.