by Stephen Tall on January 28, 2014
Nick Clegg today says the Coalition stuck to Plan A:
Despite the endless clamour to change course on our economic strategy, we held our nerve and resisted calls for a Plan B – and it’s paying off.
Vince Cable last night points out the Coalition didn’t stick to Plan A:
… the Government (contrary to the popular political narrative) has also used counter-cyclical stabilisers to offset the downturn in 2011 and 2012. … Consider this. In the first Coalition Budget, we anticipated borrowing £37bn in 2014/15; down from the £150bn we were borrowing in 2010. In the next two years, we were hit by a slowdown, such that the taxes that the OBR predicted for 2015 fell by £60bn. The government’s reaction was to increase expected borrowing for 2014/15. In the latest Autumn Statement, we now expect it to be £84bn, or £47bn more than before. This is not the policy of a government fundamentally allergic to borrowing. Keynes would have said: let borrowing take the strain when a weak economy causes your finances to deteriorate. That is what we have done.