Being an occasional series in which the writer confesses that supporters of the
British Conservative party leave him in a state of perpetual perplexity. Part one here
and part two here.
In my political neighbourhood, the image of the Cameron is now set. He is the smiling assassin whose affable public image hides his ‘Thatcherite,’ ‘heartless,’
‘Bullingdon Club,’ — fill in any other disobliging epithet you can think of — agenda. He is an extremist dressed up as a moderate; a phoney centrist, who is quietly
destroying the welfare state.
Whatever they wish to say about the rest of the coalition programme, on economic policy, my leftish colleagues have got one aspect of this government hopelessly wrong.
A classic dividing line between left and right is that the left thinks that mass unemployment is the greatest economic evil while the right believes that inflation is worse. They do so because overall unemployment hits working class Labour supporters hardest while inflation hits Conservative voters: pensioners on fixed incomes; and savers who have acted responsibly rather than rely on the state to bail them out in hard times. (I accept that these are generalisations but they still contain a great deal of truth.)
The coalition and the Bank of England have turned the old world on its head. They would rather try to stop unemployment shooting up by holding down interest rates at unprecedentedly low levels than control inflation. Today’s figures show that they are, in fact, ready to let inflation rip. In other words, when confronted with two unpalatable options, they are choosing the same lesser evil traditional social democrats would have chosen if they were in power. (I know, I know Mervyn King and half the economic pundits who appear on the news keep saying that inflation is a ‘blip’ caused by one-off price rises, but their ‘blip’ has now lasted for three years and shows no sign of emitting its last, dying bleep.)
The consequences for savers are well known. Less appreciated but as significant is the impact quantitative easing has on pensions.
It would be ludicrous to say there is no concern about inflation; people clearly notice that their living standards are being hit with a ferocity we have not seen since the 1920s. Fraser Nelson here and Jeremy Warner and Liam Halligan at the Telegraph are highly critical of the BoE’s approach from a right wing perspective. But beyond them, I think it is fair to say that there is no Conservative rebellion against government policy. George Osborne does not face pressure from his own side to, for instance, reverse his VAT rise, or tell King that he cannot let his inflationary ‘blip’ go on forever.
Why is that? Is it because:
You’ve accepted that the centre-left is right?
You are so frightened about another recession you are willing to accept policies you would otherwise deplore?
Or is it because you are loyal Tories and will agree with policies from a centre-right government you would never accept from a centre-left government?
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