CommentIsLinked@LDV: Vince Cable – I like optimists, but I don’t buy Mr Darling’s miracle

Over at the Daily Mail, Lib Dem deputy leader Vince Cable delivers his robust verdict on Alistair Darling’s 2009 budget. Here’s an excerpt:

I argued the main requirement was an honest statement, without spin, of the country’s problems. Darling was candid enough about the scale of the budget deficit – which will be a staggering 12 per cent of GDP this year and next, forcing the Government to borrow unprecedented sums to cover the collapse of revenue from financial services and the falling housing market. …

Darling was less honest about the prospects for recovery. He cheerfully assumed growth will return soon. He believes there will be a miracle. I like optimists, but I don’t buy this. I suspect the Treasury engaged in reverse engineering, worked out what growth rate was needed to make the numbers look more respectable and then assumed it.

As a result we haven’t been confronted with the brutal choices which have to be faced over the next decade in public spending. There is a promise of ‘efficiency savings’. But if government is inefficient, why has the inefficiency been tolerated so far? …

The real criticism is that the new top rate [of 50p tax rate on incomes over £150,000] is tokenism. Because there are some enormous loopholes – like capital gains tax at 18 per cent for those who can convert income into stock – the tax won’t be paid. The very rich will wriggle round it. I am very disappointed more effort isn’t being made to lift the income tax burden on low and average earners and pensioners. …

I had a real sense on Wednesday that [this Labour Government was] worn-out and washed-up, overwhelmed by the scale of the crisis which they were too slow to deal with. Mr Osborne grinned like a Cheshire cat at the bad news. The Conservatives assume they can sleepwalk into government. They may be right.

But the challenges are immense and any party aspiring to government (including mine) must face intensive questioning as to what exactly they would do beyond inheriting power by default.

You can read Vince’s article in full HERE.

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This entry was posted in LibLink.

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