I really don't know what is happening to the Tory Party. Cameron and Osborne seem to have lost their nerve and there doesn't seem to be anyone else they can allow out except on a lead.
Having been savaged by Lord Mandelson recently, Osborne yesterday made a speech on the economy almost completely without content. It turns out they have identified £1 billion of savings. They need to find £80 billion, and quickly.
The worst of it is they have accepted, or allowed to go unchallenged, Labour's dictum that you mustn't cut expenditure too quickly or you will ruin the recovery. This is nonsense. Firstly it will take a while to get the cuts through - the entire civil service will be resisting, not to mention all the quangos and lobby groups. Secondly it is not expenditure cuts which might dampen the recovery but a monetary contraction. So if you made £40 billion of cuts and felt the economy was still stuttering, you would just have to release the money back in some positive way, like cutting business taxes or national insurance, either of which would have a positive effect on employment.
But you have to make the cuts. Reducing the size of the State is a good thing, Mr Osborne. You're supposed to be a Conservative, remember?
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