The Economy and Gordon Brown

Written by Vincent Cable MP and published in Online Exclusive on Fri 3rd Dec 2004

This week the economy came back into focus and it was my job to respond to Gordon Brown for my party in parliament and in the media.

The economy is generally doing well, locally and nationally. There is no denying it and I don't. Having lived through booms and busts, financial crises and times when Britain always seemed to lag behind it is good to have some success. And Brown deserves credit, notably for making the setting of interest rates independent of day to day political interference.

But complacency is not merited either. A lot of people are getting hurt by collapsing pension schemes and high debts and many people on low incomes just scrape by. There are big, open ended budget commitments to the continued war in Iraq, the expensive and frankly pointless ID card scheme of David Blunkett's and endless cost over-runs on defence contacts like Eurofighter. It is no wonder that most professional forecasters envisage a growing budget deficit. And despite the Chancellor's claims to believe in social justice we have a deeply unequal country with an unfair tax system.

It is also complacent to gloat because we are currently doing better than Germany and some other European countries. They generally have better public services and productivity and will recover.

The bookmakers give respectable but fairly long odds against my occupying No 11 Downing Street in six months time. The likelihood is that Gordon Brown will still be there. But the country needs an effective opposition and my job is to fashion an alternative set of economic policies built around financial discipline, tough choices in public spending - cutting back low priority items to finance pensions, education and the police - and a fairer tax system which reflects peoples' ability to pay.