Danny Alexander: UK’s triple-A credit rating “not be-all and end-all”

Lib Dem chief secretary to the treasury Danny Alexander has signalled an interesting shift in the government’s economic approach, downplaying the significance to the economy of the UK’s continuing triple-A credit rating. Here’s what he told the BBC (courtesy of PoliticsHome):

“The credit rating is not the be-all and end-all. What matters is have we got the right policy mix for the country to get people back into work, to support economic growth, to deal with the huge problems in our public finances and the credit agencies reflect on those things and the ratings they give are a reflection of the credibility of that mix.”

Compare Danny’s equivocal statement with George Osborne’s bombast just last week in the Telegraph:

George Osborne, the Chancellor, has claimed that the reconfirmation of Britain’s gold-plated AAA by a key credit rating agency shows that the “world has confidence” in the Coalition’s deficit-reduction plan. … “As S&P themselves say, what would damage Britain’s creditworthiness would be relaxing our resolve to deal with our debts. We won’t do that.”

It was a curious decision of the Chancellor’s to attach such importance to the credit agencies’ ratings, not least because their decision is outwith his immediate control. And while I don’t by any means always agree with the Guardian’s economics editor Larry Elliott, it’s hard to disagree with this assessment:

Forget for a moment that the ratings agencies forfeited their right to give advice to governments when they gave AAA ratings to the toxic waste spewed out by Wall Street and the City of London in advance of the financial crisis. Ignore the evidence that the sky has not fallen in when other countries have been downgraded. While these are important points to bear in mind, the real problem with allowing policy to be dictated by the ratings agencies is that it is so clearly at odds with the government’s vision. This can be summed up quite simply: get the economy moving; meet the targets for deficit reduction; win the 2015 election. As things stand, none of these objectives will be achieved.

* Stephen was Editor (and Co-Editor) of Liberal Democrat Voice from 2007 to 2015, and writes at The Collected Stephen Tall.

Read more by or more about , , or .
This entry was posted in News.
Advert

One Comment

  • Richard Dean 6th Aug '12 - 12:19pm

    DA is quite right, what is important is that the population benefits. GO has made the beginner’s mistake of confusing markets with the world. LE is right except that “win 2015” should not be a government priority, but a party one. IMHO. Are we being prepared for news that our credit rating is to be reduced? Owing to what many now see as GO’s inappropriate austerity policies?

Post a Comment

Lib Dem Voice welcomes comments from everyone but we ask you to be polite, to be on topic and to be who you say you are. You can read our comments policy in full here. Please respect it and all readers of the site.

To have your photo next to your comment please signup your email address with Gravatar.

Your email is never published. Required fields are marked *

*
*
Please complete the name of this site, Liberal Democrat ...?

Advert



Recent Comments

  • Martin Gray
    Despite the recent by-election victory - the polls still have the cons on mid thirties, with everything that's gone on ...Come the GE there won't be any stay at...
  • Roland
    Picking up the other thread in this case ie. the legal arguments being used to justify the decision, it is worth reading the full syllabus and opinion: https://...
  • William Francis
    Maybe, and me out on this... we call on the government and the train companies to offer an above-inflation pay rise to the rail workers, and then the strike wil...
  • William Francis
    I too find it strange how the right adopts a selective use of "There is no way in which one can buck the market". The continued war on drugs is a notable exampl...
  • Nick Collins
    @nvelope2003 "I wonder how many people voted Liberal Democrat recently with the oath of allegiance in mind. If only the party could move on from minority inter...