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Work and prosperity
29 August 2012

Cameron and Osborne: Standing on the shoulders of pygmies

As leader of the Conservative Party and Chancellor of the Exchequer, the performance of David Cameron and George Osborne – unlike most their colleagues – can be readily reduced to simple numbers.

For a party leader, the key numbers are psephological – votes gained, seats won, size of parliamentary majority. For a Chancellor, the key numbers are economic – rate of growth, size of deficit, numbers out of work. There’s nothing quite so cut and dried for, say, William Hague at the Foreign Office or Michael Gove at the Department of Education – where such statistics as do apply feed into an altogether more qualitative assessment of performance.

For Cameron and Osborne, though, the numbers dominate. So much so that judgements can be massively over-simplified. For instance, we easily forget that the result of any particular election partly depends upon what happened in previous elections. Thus Tony Blair’s victory in 1997 was built upon successive Labour advances in 1987 and 1992. In 2010, however, David Cameron was working with a Conservative vote share that had barely budged since our landslide defeat thirteen years previously. Gaining a majority from such a starting position would have been all but unprecedented.

As Chancellor, the economic situation facing George Osborne is analogous. Consider the following from David Smith on his EconomicsUK blog, in which he compares Britain’s economic performance with Sweden’s: 

  • "After slumping 5% in 2009, Sweden’s economy surged 5.8% in 2010 and 4% last year. Britain shrunk a little less in 2009, 4%, but grew only 1.8% in 2010 and 0.8% last year. Leaving aside the vagaries of the data, the maths suggest any growth this year will be difficult. Sweden’s economy is well above pre-crisis levels of GDP, while Britain’s is more than 4% below it. 
  • "What is Sweden’s secret?"  

Smith provides several answers to his question, including the reform of the Swedish banking sector in the 1990s and Sweden’s export-orientated industrial base. Then there’s the small matter of fiscal responsibility: 

  • "The final factor is fiscal policy. David Cameron used to talk about fixing the roof while the sun was shining. Sweden, having had awful public finances in the 1990s, went into the crisis with healthy ones, a budget surplus of 3.6% of GDP in 2007. Britain, in contrast, had deficits of similar size on comparable figures from the Organisation for Economic Co-operation and Development. 
  • "The result of what the OECD describes as "steadfast fiscal discipline in the past" is that Sweden has not needed the tax hikes and spending cuts Labour and the coalition were forced to introduce in Britain. With a budget close to balance, Sweden has room for a fiscal stimulus, if needed." 

Of course, none of this is to deny that Cameron and Osborne have made mistakes of their own; nor is it to claim that their leadership was doomed from the start or, indeed, is doomed now. Nevertheless, if it falls to others to learn from their mistakes, the proper context must not be ignored.


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