Sunday, 31 January 2010

'U-turn' by Dave?

The language of British politics has not been enhanced by the notion of the U-turn. It was originally introduced to describe Ted Heath's dramatic policy shift in 1972 and Mrs Thatcher subsequently declared: 'U-turn if you have to. The lady's not for turning.' In fact it is quite sensible for politicians to adjust policies to changing circumstances. If the facts change, then one can change one's mind, as Keynes in effect said.

Now Dave Cameron has in effect been accused of a U-turn over an apparent retreat from a pledge to make early cuts in spending: Spending

This will be a very difficult decision for whichever party is in government after May. There is no doubt that the economic recovery is anaemic (particularly compared with the latest figures from the US) even if the GDP figures for the final quarter of last year are subsequently increased. My own intuitions rely to some extent on what I hear from the chamber of commerce network in Oxfordshire and the word there is that the weather in January hit demand quite hard. They are also noting a lack of one person start ups of new business which normally occur in that area. There is a real risk of a 'W' shaped recession if public expenditure is cut too quickly.

On the other hand, if sufficient cuts are not made (as distinct from projected) the UK's bond rating will be downgraded and we will end up paying a lot more in interest on our gilt edged, if we can sell it. The pressure is on Greece now, but it may switch elsewhere.

It may be that Dave's softening of his tone was a response to the latest poll figures which suggest that the Conservative lead has been cut. There are also unsubstantiated reports of a rift between Dave and Boy George: Poll

A 9 per cent lead would result in a hung Parliament with the Conservatives as the largest party (no doubt backed by the Ulster Unionists following their recent discussions). However, one has to be careful about reading off from a national poll to individual seats.

The Conservatives have been making a big effort in key marginals. A simple reading of this poll would cast doubt on the chances of Chris White winning Warwick and Leamington for the Conservatives. My sense, however, is that the Conservatives are still doing well in the constituency.

The political science literature tells us that campaigning makes a difference. Chris White fought the constituency last time and he is a local councillor. He has been assiduously courting key groups who might not necessarily be natural Conservatives. Last week he met nurses at Warwick Hospital and the meeting seems to have gone well.

There is a long way to go yet and I do think that some voters harbour negative memories of the last Conservative administration and fear a 'slash and burn' approach to public expenditure. It's a difficult path for Dave Cameron to tread.


Justin Greaves said...

How about they ditch Boy George and put in Clarke as Chancellor for the first year or two, and then replace him with Hammond?

Wyn Grant said...

Very interesting and amusing suggestion, but not very likely.