Speaking at Nottingham University on Friday, as part of a gathering of academics to discuss "Cameron's Conservatives", Ken Clarke warned that the level of debt awaiting the next government would be a "nightmare" compared to the borrowing he had to manage as Chancellor of the Exchequer in the early 1990s.
He said that public expenditure restraint would have to produce large savings to avoid "drastic" increases in taxes.
He praised George Osborne's handling of the economic crisis and urged the Conservative Party to "minimise stupid promises".
The worst promises were rushed promises, he warned and remembered Margaret Thatcher's commitment to honour pay settlements promised by Labour at the end of the 1970s. That commitment delayed restructuring of the public finances by a costly two years, he warned.
He also suggested that David Cameron and George Osborne should avoid very specific descriptions of how they will restore order to the public finances. Margaret Thatcher and Geoffrey Howe stood on a 1979 manifesto that promised to control borrowing and shift taxation from direct to indirect forms. There were no specific references to taxes that would rise or fall.
Mr Clarke also told the Conference hosted by The Centre for British Politics that he was very "relaxed" about the state of the European debate within the Conservative Party. The Party remained eurosceptic but it was a moderate sceptism compared with the right wing nationalism of a few years ago. He predicted that President- Elect Obama's commitment to the European Union would encourage all those Tories who rightly valued the Atlantic Alliance to stay close to the heart of Europe.
Just wanted to thank Tim for doing a great job chairing the roundtable that ensured what was a good conference finished with a bang rather than a whimper. Jonathan, and David Willetts - and of course Ken Clarke - also did us pointy-heads proud. Am looking forward to seeing whether this diary entry lights the blue touch paper! It should do: if anyone knows what they're talking about, and isn't afraid to lay it on the line, it's Ken!
Posted by: Tim Bale | December 15, 2008 at 15:18
'to stay close to the heart of Europe.'
Indeed waiting, dagger drawn to plunge it in, the moment France, Germany and the rest of the faint hearts reject Obama's overtures for more troops in Afghanistan.
Now where's my dagger?
Posted by: William Blake's Ghost | December 15, 2008 at 15:19
"President- Elect Obama's commitment to the European Union would encourage all those Tories who rightly valued the Atlantic Alliance to stay close to the heart of Europe."
A superbly suave example of a politician's interpretation to bolster own viewpoint. Respec' !!!
(Not that I agree with it at all)
Posted by: Ken Stevens, NewKipper | December 15, 2008 at 15:42
We'll see what Obama really thinks after he's been elected. Not before.
Posted by: Malcolm Dunn | December 15, 2008 at 15:48
"We'll see what Obama really thinks after he's been elected."
He was elected in November Malc. Have you been drinking?
Posted by: GB£.com | December 15, 2008 at 15:58
"minimize stupid promises".
Exactly just point to the general aims and ambitions.
“He said that public expenditure restraint would have to produce large savings to avoid "drastic" increases in taxes.”
Yes and not just Welfare there is a mass of over manning in most of the public sector.
Labour have splurged like a spurned mistress with her ex-lovers Credit card.
Ken as always is careful about what he says and is mindful not to upset the leadership.
“Clarke warned that the level of debt awaiting the next government would be a "nightmare" compared to the borrowing he had to manage as Chancellor of the Exchequer in the early 1990s.”
He is being far to nice (as always) Labour have been at it again and now we are in the shi* up to our necks. A conservative government cannot come to soon. DC would do himself and the party a favour if he found Ken a high profile role. Lets hope that DC gets the message and if there are bridges to be built, gets on with the job.
Posted by: The Bishop Swine | December 15, 2008 at 16:03
"He predicted that President- Elect Obama's commitment to the European Union would encourage all those Tories who rightly valued the Atlantic Alliance to stay close to the heart of Europe."
I believe he is right.
Posted by: Sally Roberts | December 15, 2008 at 16:25
Are you trying to be clever Chad? There's a first time for everything!
Posted by: Malcolm Dunn | December 15, 2008 at 17:04
Just wanted to add that it's not just Labour which tends to leave its successors a mess to clear up. Things weren't in great shape in 1974 and, even if many of you guys don't like it, Edward Heath was a Conservative Prime Minister. As for 1964, When Labour's Jim Callaghan entered the Treasury he passed the outgoing Tory Chancellor, Reggie Maudling, who had clocked up £800 million of government debt. ‘Sorry to leave such a mess, old cock,’ said Maudling. Nuff said!
Posted by: Tim Bale | December 15, 2008 at 17:18
Tim Bale, Maudling was referring to the state of the office not the economy. By 1967 Wilson had a balance of payments crisis leading to a forced devaluation and the ridiculous 'pound in your pocket' speech.
Posted by: Malcolm Dunn | December 15, 2008 at 17:28
Ken Clarke was in favour of the VAT decrease for a few days, until it actually happened, then he was against it. We are better off with Osborne than this Europhile.
Posted by: What did Ken Clarke think? | December 15, 2008 at 17:49
If I was fighting a war for the UK I would aim to have every weapon at my disposal. Thats not too dramatic - we are fighting to stop Brown totally wrecking the economy. Putting aside the specific personalities, I would find a role for those that can land punches. Building and balancing teams does require a mix of those that are very skilled individually and those that work as a team. Trying to find a role for those you want to deploy is an art but needs doing.
Posted by: MG | December 15, 2008 at 19:22
On a related note, there's an excellent piece in the Guardian from their Economics Editor on the Brown-Steinbruck dispute and why the UK ought not to join the Euro:
http://www.guardian.co.uk/business/2008/dec/15/emu-economy-euro-pound
Posted by: Adam in London | December 16, 2008 at 01:36
"Ken Clarke was in favour of the VAT decrease for a few days, until it actually happened, then he was against it. We are better off with Osborne than this Europhile."
My Enemy is always wrong even when he is right!
In any case the Euro-skeptics are just as troublesome as the Europhile A plague on both their houses says I.
Posted by: The Bishops Wife | December 16, 2008 at 10:20
We'll see how long President-Elect Obama's "commitment" to the European Union lasts when he actually becomes President and begins to understand the difference between the rhetoric and the reality of the EU.
Posted by: Dorothy Wilson | December 16, 2008 at 11:05
The problem the government has now is that any increase in taxation will drive down receipts. This is the reality of the laffer syndrom which put simply says that there are two points of zero reciepts in the tax curve, one at 0% and one at 100% where there is no longer any point in working. Ipso Facto there must be a point of maximised taxation in between. Most economists seem to put this at around 35% of GDP tho this has to be modified to take into account "factored government work" ie the cost of companies and individuals in complying with regulation.
It says a lot that revenue was already falling for the government before the Brown Depression kicked off
Posted by: Bexie | December 16, 2008 at 11:41
The reality of the EU is in fact a nightmare! So, "Dorothy Wilson" has made a fair point. The hypocrisy and protectionism of the EU, are just two weaknesses of this undemocratic institution. Surely, we would be better off out?
I have more faith in Osborne than Ken Clarke.
Posted by: Julian L Hawksworth | December 17, 2008 at 09:45