Gordon Brown Is Lost

David Cameron, Daily Telegraph March 26, 2009

Mervyn King’s evidence to the House of Commons Treasury Select Committee two days ago was a defining moment in this recession. In warning that the country couldn’t afford a second fiscal stimulus, he vindicated the argument of the Conservative Party that the priority must be tackling debt. We have been clear, consistent and right about the dangers of a large, discretionary fiscal stimulus in the circumstances that Gordon Brown has created.

That’s why, in the teeth of considerable opposition last Autumn we opposed the government’s £12.5 billion VAT cut. It’s a tough decision for any centre right politician to oppose a tax cut, but we knew that the country couldn’t afford it and so it would do more harm than good.

Back then, Labour liked to say that we in the Conservative Party were isolated in our opposition to their fiscal stimulus. Today, it is Gordon Brown who is isolated, with the CBI, the German Government, the European Central Bank, independent forecasters – and now the Bank of England all saying we can’t afford a further discretionary fiscal stimulus because of the disastrous state of the public finances and the scale of Labour’s Debt Crisis.

But the vindication of our position does not just go back to last Autumn. It goes right back to the start of my leadership of the Conservative Party, when I made clear my rejection of unfunded tax cuts and my belief that economic stability must always come first. Of course I believe in cutting taxes but if you promise it, or indeed do it, when you can’t afford it you just end up letting people down.

Today it is not just a question of economic stability; it is a question of recovery from a deep recession, and I believe as strongly as ever that fiscal responsibility is an essential step. Fiscal responsibility is an absolutely non-negotiable part of my kind of conservatism. Here’s why: there’s a moral case, an economic case and a political case.

Fiscal responsibility is morally right because it’s wrong to live like there’s no tomorrow and burden future generations with our debts. Thanks to Gordon Brown’s reckless and irresponsible spending, every child in Britain is now born owing at least £17,000, and servicing just the interest on that debt will cost more than educating those children.

Fiscal responsibility is economically right too. The conventional wisdom is that in a recession governments have to step in to stimulate the economy with spending increases and tax cuts. That might be right for countries that built up surpluses when times were good or those with modest deficits. And it’s easier if you have a reserve currency like America. But that argument gets turned on its head when the government is already living way beyond its means as in the UK.

As Mervyn King himself says: “we entered this crisis with levels of public borrowing which were too high”. The IMF say we’re going to have easily the highest borrowing of any G20 economy. In these circumstances, a further fiscal stimulus will do the opposite of what Gordon Brown claims. Instead of making things better – stimulating demand, reducing unemployment and increasing growth – it will make things worse – undermining confidence with the certainty of higher taxes and the risk of higher interest rates. As one leading retailer told me recently, consumers are sorting out their own finances and they’ll only be confident when the Government does the same.

Just look at what happened yesterday when the Government failed to find enough investors willing to buy its debt – something that hasn’t happened for many years. The markets took fright and long term interest rates began to rise. That’s a worrying sign, because higher interest rates will increase the cost of paying for the national debt and could deter the investment we need to get us out of this recession. That would make the recession longer.

Instead, we’ve argued that monetary policy should take the lead in tackling the recession. That’s why we called for a National Loan Guarantee Scheme back in October to get credit flowing. Government can help in other ways too. We’ve called for the Government to slow the growth of spending and use the money, £4.1 billion, properly costed, to help the innocent victims of the recession by abolishing the basic rate of tax on savings income and cutting taxes for pensioners.

But fiscal responsibility is not just morally and economically right, it’s right politically too because it’s a vital part of the Conservative belief in personal and social responsibility. We’re never going to build the kind of country where people save for their future and where families take responsibility for their children’s future if people see a Government that throws responsibility to the wind and expects future generations to pick up the bill. Government should lead by example, and that’s why fiscal responsibility should be such an important part of Conservative politics.

The only way to restore confidence in our public finances and our economy – at home and abroad – is to set out a credible strategy for living within our means. That’s why what the country needs right now is straight talk and a strong lead. Straight talk on the debt crisis, because we've got to start solving it in order to get our economy out of recession and into recovery. And a strong lead on the economy, because everyone's going to have to take their fair share of the burden for putting right what Labour have got wrong. That’s what the Conservative Party is offering the country, and fiscal responsibility is at the very heart of it.

Comments: 24

David Cameron We are little more than a year from the General Election and it is now time to begin setting out a plan to get UK out of the mess of 12 years of Labour. Debt reduction both public and private has to be number 1 priority. Proper monetary policy is needed and there are enough models in history. I am afraid there will be pain, but nothing like the pain if we dont do what is needed. Zimbabwe gives us a modern day example.Time for the Tories to take the battle to Labour.

Dear David, First you need to grow a set of 'round 'uns' then get straight into battle. Stop all hand outs to everyone, then stop all immigration except those that the Country needs, re-instate democracy (ie. give us a vote on the EU). Yes it takes a lot of B....s to run a country and yes a lot of scroungers will hate you, but if you want the top job then you had bloody well start to fight for it, we know we're in debt, it's us it's affecting, not you lot in your 'Ivory Towers' Roll your sleeves up and get stuck in, if not bog off and let someone else have a go.

The typical Telegraph commentator: Grrrrr.... Taxes Grrrrr.... Immigrants Grrrrr.... Benefits Grrrrr.... Gordon Brown Grrrrr.... 'The Left' Grrrrr.... The NHS Grrrrr.... 'The State' Grrrrr.... 'The Youth' Grrrrr.... PC ... Followed by a plan to fix the economy that they need to get off their fevered chests because they know noone in government, or in the opposition, has thought of their genius ideas yet. And written here as if Mr Cameron is really sitting at home reading this! Priceless

Cameron .... Daniel Hannan gave the speech of a lifetime at the European Parliament; he destroyed the last vestiges of any credibility Brown may have had - and to his face. Hannan's speech is the most watched item on Youtube - around the world. Now why haven't you done that? I'm beginning to think the Tories may have the wrong Leader. Hannan is very articulate; knows how to hit a nail squarely on the head and is Eurosceptic. Are you promising a Referendum on the Lisbon ConTreaty, regardless of the Irish/Czech vote - and if not, why not?

1. It would be valuable for Mr Cameron to enunciate the current position of UK debt liabilities, with an indication of the repayment schedules currently envisaged for that debt. 2. It would be valuable to have a number put on the ongoing liabilities of paying people to be employed by the state. 3. It would be valuable to have some numbers put on the last 10 years of tax receipts and the projections for them for the next 5. Then we would, instead of hearing debates, have a net projected deficit for the next 5 years and the implications for children and grandchildren moving forward. I don't think most of us want more debates on highfalutin moral principles. We want to know: how much are we in for, how to we start to get out of it and what laws are we going to pass to make it considerably less likely that we will get into it AGAIN? And contrary to some Tory statements, I DO believe that a global fiscal regulatory framework is necessary to bring this debt under control long-term, because it is the endemic tax attitudes of the rich (avoidance, non-domicility etc etc) which beget the ridiculous tax attitudes of lefties, when it really shouldn't be too difficult to agree some kind of range of taxation tolerances broadly acceptable to >80% of this country......

pewkatchoo - you haven't got a clue. The government doesn't fund it's debt at 0.5% - please don't make assertions off the top of your tiny head. And debt, currently at �600bn and climbing of on-balance sheet items not to mention off-balance sheet liabilities for pensions etc, is worth �10k for every citizen of the UK, costing us �31bn (or about �500 each) annually in interest. The debt will indeed rise by at least �120bn a year until we're at least twice as indebted and these figures have doubled.

The Conservative/Tory Party cannot be a center right party if Mr. Cameron says the Government can't afford tax cuts. To a conservative or libertarian, the People's money is their own, and they have it taken from them in the form of taxes by the Government to pay for Government services. Mr. Cameron talks like the Democrats here in the US. They believe all of the People's money is property of the Government, and that the People are allowed to keep some money as determined by the Government. Your Conservative Party beliefs sounds fairly close to our Democartic Party's. I can only imagine what your Labour party thinks of role of Government.

The devastating postion we, the country - both public and private sector, has arisen because we have lived beyond our means. Let's take the steps now to prevent this position deteriorating further, and stop spending future generations inheritance: 1. Freeze public sector pay 2. Freeze public sector recruitment 3. Close public sector index-linked pensions schemes immediately. Accrued service to remain. 4. Replace this scheme with a contributory defined benefits scheme - with contributions matched up to say 6% of salary (this should apply to all public sector employees but most especially MPs) 5. Reduce the number of MPs to say 400 by increasing the size of each constituency to a minimum of 100,000 voters - thus improving proportional representation. 6. Increase MPs salaries to �100k but remove all benefits, including housing, the John Lewis list, 2nd jobs directorships etc. This stops the clock, shows willing, shares the pain and provides a framework at both home and abroad to start to build for the future. The public sector needs to be what we can afford rather than some flight of fantasy society that is unachievable.

A timely article, Mr. Cameron, and perhaps an indication that the Tory party is emerging from hibernation. You mention the invigorating phrase "fiscal stimulus" an impressive six times, and managed to squeeze in the equally attention-grabbing "fiscal responsibility" a further seven times. Very good. Please continue to prod Nulabour with these verbal bayonets. As Cpl. Jones was fond of saying, "they don't like it up 'em "........

Pre Budget desperate last chance suggestions for reducing national debt by selling the family silver as follows : 1.Sell the remaining 2 million local authority homes - approx �100 billion . 2.Sell off remaining north sea oil/gas rights - approx �50 billion . 3.Sell any remaining surplus government property - MOD , L.Authority, NHS , etc etc - approx �40 billion . 4.Sell any remaining colonial assets - falklands ? gibraltar ? value - who knows . Total proceeds - say �200 billion . If this is not enough I suggest we join the euro .

Simon Coulter accuses me of being specious. Well, I would rather be accused of that than be accused of being wrong! I read what Hannan and Cameron said and I worked it out according to what they said. It is not for me to interpret what they said and come up with what they actually meant, it is for them to be accurate in the first place. Otherwise I will not be voting for them. We have been making excuses for politicians' nonsense for far too long.

At last, Cameron says what needs to be said, and expresses the Tory response to profligate Labour governments on returning to power - which was, and remains, the taking of our unpleasant medicine, fiscal retrenching - sackcloth and ashes whatever you will. We have, as a nation, and even as individuals, lived beyond our means - and entertained as government policy the expansion of dependency on benefits and the taxes on the labours of others. Irresponsibility must give way to responsibility again - to realism about our situation. The Tories will not be returned to power with a sackful of cash or even of answers to the issues we face which are already understood in the public domain. The Conservatives' difference to the incumbent regime is that they will need to be ready to do things from amongst those options which are anathema to Gordon Brown and the present appalling Labour government unable and unwilling to change tack. pewkatchoo 11:33 AM is being specious - the 17K debt is per head of 60M people - even at 0.5% (utterly unachievable as the true cost of government debt) the interest cost is 5Bn p.a. Education from 5 to 18 is 13 years - 65Bn is not that unadjacent to the c. 77Bn education budget of 07/08. Cherry-picked statistics can be used to prove anything - as we well know from 2 years of this manipulative regime. It will be actions that speak when we have a change of government, not watered down pre-election rhetoric pitched to avoid frightening the horses... 260309-13:56

Sorry Mr Cameron, but judging by your record as Tory leader thus far, you don't know how the economy should be run either. You deluded yourself into believing that money grows on trees, as demonstrated by your commitment - only recently lifted - to match Labour's bloated spending. It is inevitable that when you announce the cuts in government spending that must surely come, you'll face howls of protest from Labour; if you are incapable of facing that down, then you need to step aside for someone with more backbone. If you really don't know where the cuts should fall, I suggest start small (e.g scrap the Children's Commissioners, the EHRC, and numerous other Quangos), then think bigger (e.g. scrap the Building Schools for the Future programme - an unnecessary luxury if ever there was one; welfare reform; the amount of money we give to the EU, etc.); it can't be that difficult, surely. I do actually want a successful Tory Party, but I despair at the lack of sustained, coherent opposition there's been to the dreadful Blair and Brown governments.

There is a massive job ahead for the next government- likely to be headed by David Cameron. We have never before had such a dire economic situation. We have bust without the cleansing this usually produces to bring the government/public finances back to normal. Yes Cameron wants a strong nhs and fairness for people on all incomes but knows we have to realistically afford this. The conservatives usually clear up the financial devistation left by Labour governments and no doubt they will at least try and sort it out rather than walk in to the financial wilderness like Brown is doing. So i welcome the Conservatives to bring some common sense to all this but allied with Cameron's belief in green issues and the nhs- i think it will work well for us all.

Sorry..That should read Mr Hannan!!! Obviously his stirring exploits have brought to mind the flying ace!!

One thing you better get used to very quickly Mr Cameron beggers can't dictate to those who lend you money. What a wonderful scam it would be if you borrow money then reduce the interest on the loan to reduce your debt. Your biggest problem will be in building confidence in this countries ability to honour it's obligations on the huge debt mountain Brown has built up in our name. There is one light at the end of the tunnel though Brown intends to preach in St Pauls before the G20. Could it be his answer now lies in prayer I wonder. After the damage he has done to the people of this country he is tempting providence but showing his arrogance at the same time. He should be struck down for his audacity in trying to preach morals to anyone given his track record.

Sorry Mr Cameron. You were made party leader in the Blairite image just as that particular train was leaving the station. You are already viewed as a discredited leader by association alone, without the added weight of you and your party's total failure as an effective opposition. As Pewkatchoo has noted you are clearly on the back foot as a result of the noble efforts of Mr Hannah. Sadly Mr Cameron, how ever hard you try, and for however long you try you will never ignite a spark in the way that Mr Hannah has,how sad that after 11 years of such a corrupt regime it has taken one politician of independant thought in an oft unreported chamber to strip bare the duplicitous creature that is Brown. Too little, far too late from you. Your time has passed, time for you to move aside.

Mr Cameron, in a nutshell Gordon"Prudence" Brown and his cronies, don't know the meaning of the word and they have been found out. It's going to be tough but you have to do the right thing and put this great country first. You'll get my vote.

P.S. and no copying Daniel's homework

I'd very much like to see Cameron and Osborne set out "a credible strategy". But they don't. They jeer from the sidelines, one sound bite or another, mostly about trivial or minor issues, but there's no indication of any strategic thought. I know some will say "Wait for the manifesto", and "It would be a mistake to reveal our best ideas so that Labour can steal them". I disagree. We're in the midst of a national economic crisis, and for a patriotic party making any possible contribution to the solution of that crisis, for the sake of the country, would automatically take priority over party interests. There are two central economic issues, on which Cameron and Osborne have remained silent: 1. Instead of removing "toxic assets" from the banks, Darling has left them in place but insured them, for a derisory "premium", at massive risk to the taxpayer. 2. Instead of using "quantitative easing" as part of a process of removing "toxic assets" from the banks, Darling is using it to rig the gilts market so that he can carry on borrowing and spending. Until the banks have been sorted out, the prospects for economic recovery will remain distant; so the government will desperately seek to avoid cutting public expenditure, because it knows that any significant cuts at this time would necessarily mean consigning millions of people to the dole queue - private sector, as well as public sector, workers; so it will have to borrow as much as it can, to fund as much public spending as possible, in the hope that somehow it can carry on doing this for long enough to ride out the crisis. But if Gordon Brown announced today that we were having a general election, and in a few weeks time Cameron became Prime Minster and Osborne became Chancellor, what would they do to mitigate the economic catastrophe facing the country?

Camoron you are not a tax cutter. We need a government who will cut taxes and slash government waste to balance the books. I think I can say that people in the UK do not object to taxes as long as they get value for money, We are not getting value for money. Consult "The 2008 Bumper Book of Government Waste" then resubmit your homework. 1 out of 10

The problem is that you allow your agenda to be selected by Gordon Brown. OK so you got debt right or so you say, but I don't hear any convincing ways in which you would deal with it. You give all the appearance of being a marketing man and little evidence of being a man with sound economic principles. Go grubbing in the gutter with Gordon slingng rotten cabbages at Fred Goodwin and run for cover every time Yvette Cooper says boo, but the only way you win the argument is with sensible economic policies and fear of no one. You can get us out of debt by cutting spending and the most obvious and quickest way to do that is to take a knife to the bloated Civil Service. You can then set us on the road to growth by cutting taxes, particularly corporate taxes to spur new businesss ventures. Believe me, the public will be right behind you. Gordon Brown has provided you with the poll lead you currently have and no one else.If they replace Gordon you might well have "had it". Until you can show an independent spirit and, economic policies the Tory party can be proud of, I for one will not be bothering to vote for you

Mr Cameron. You have just stolen material from Daniel Hannan without acknowledging his contribution. That is awful. What is even worse is that it is economic nonsense. Servicing the interest on 17k of debt will cost just 85 pounds a year at current interest rates (0.5 percent remember). Educating a child costs around 7-8k a year (9-20k if private). Hannan was wrong about that (even if his attack was deserved) but for you to repeat it is pretty poor.

Mr Cameron, do you realise that this country was once the greatest in the world - and could be great again - and you could be Prime Minister for the next twenty years if only you would find the courage to commit yourself to getting us out of the New Soviet Union of Europe and rescinding every law passed since Heath started betraying us. Commit yourself to these actions and you will be swept into the Premiership by the largest majority this country will ever have seen! Fail to do so, and you will show yourself up as just as big a traitor, liar and criminal as the present bunch.

Gordon Brown Is Lost

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