Wednesday, 20 March 2013

George Osborne finds no room for manoeuvre

The great Captains of history all understood that that generalship is about having choices, without choices the commander becomes predictable and outcomes become dull. There are countless examples of this kind of leadership, from Earl Haig (the Butcher of the Somme) to Monty.  England has produced more than its fair share.  Occasionally the gene pool throws up a one-off, someone who is able to break the mould and produce the proverbial rabbit from the hat – one thinks of Henry V, The Duke of Marlborough, Nelson and Geoffrey Howe.  How Howe I hear you say? 

Geoffrey and the Iron lady
In 1981 in the teeth of a terrible recession, Geoffrey Howe presented a budget that changed the course of history.  The whole establishment were baying for Keynesian reflation  (364 Economist wrote to the Times to complian) but Geoffrey knew better;  he inflicted on the economy a monetary squeeze that even made investment bankers blink.  The results were cataclysmic, the economy embarked on a bull run that only ended in 1990, the trade Union movement was killed off in one surgical cut and an army of entrepreneurs, who even made Tony Blair look good, were unleashed on the world.  This budget was as transforming as the extraordinary tactics deployed by Nelson at Trafalgar and it left the Crown’s opponents similarly floored.

What Howe learnt the hard way and what Nelson had from birth, flowing in his very veins, was the certain knowledge that manoeuvre creates space and space gives you options and options gives a fighting chance.  Apart from Geoffrey Howe and possibly Nigel Lawson, only in his first two budgets, we have lacked Chancellors with the audacity to create room for manoeuvre.  Gordon Brown was the worst example of this, despite having inherited a ‘goldilocks’ economy and over 10 years of relatively benign global economic conditions he didn’t achieve a single important economic reform. 

It hurts to say it but the current Chancellor is in the Brown mould.  Having inherited a broken economy and an electorate that were expecting the worst George Osborne had a blank cheque to reform and improve our economy.  Although saddled with LibDem partners he had a great opportunity to change the game and he has done absolutely nothing.  No meaningful changes to the tax regime, no significant reduction in our public spending, no industrial policy, no monetary policy innovations, no trade initiatives, no anything worthwhile in three long years (and I’m a Tory supporter). He has tinkered incessantly making minor changes to the failed Labour economic policy he inherited and he has wasted a once in a generation chance to change our country for the good.

To use a well know naval curse which Nelson would have used himself on vanquished French Admirals – “a pox on your house”. 

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