Coffee House

George Osborne isn’t clashing with Vince Cable: he’s starting to agree with him

13 December 2012

By this stage in the Coalition, everyone would have expected at least one major bust-up between George Osborne and Vince Cable. But his evidence to today’s Treasury Select Committee suggested that the Chancellor isn’t so much involved in a stand-off with the Business Secretary as he is taking on his point of view. It was significant how many times Osborne had to explain a softening in what were previously hard-and-fast economic rules, and hard-and-fast policies.

His refusal to rule out replacing the Bank of England’s inflation target with a growth target is the most significant sign of a coalescing between the two men. Osborne told the committee that the current target ‘has served this country well and provided stability’, but he added that he was ‘glad’ the next Bank of England governor Mark Carney was involved in the ‘debate about the future of monetary policy’. Moving to a growth target would be an endorsement of Vince Cable’s focus on growth rather than deficit reduction.

Claim your gift

Then there was the debt target, which Cable has always felt to be an unnecessary rule. Osborne defended his decision to miss it rather than enact further sweeping cuts by saying that ‘of course I very much wanted to hit the target’, but that he would rather avoid a large swathe of cuts ‘and giving myself the satisfaction of hitting the target and the impact that would have on the economy and the unnecessary pursuit of a target’. Osborne would not have described aiming to have debt as a percentage of GDP falling by 2015/16 as being an ‘unnecessary pursuit’ this time last year, but Cable probably would have done.

And there was the threat to the UK’s top notch AAA credit rating. Where previously the Chancellor had trumpeted the UK’s continuing golden status with the ratings agencies as a sign that his economic policies were the right ones, he now said it was ‘one test alongside others’. Cable has always had some choice words about credit ratings agencies, arguing that borrowing costs did not rise significantly for the US after its own downgrade, and that the agencies themselves do not have the world’s greatest track record. Now it seems Osborne is happy to join him in that opinion.

But as if to underline that just because things hadn’t quite worked out as perfectly as he’d hoped, it didn’t automatically mean that Labour’s policy alternative was the right one, Osborne repeatedly attacked Labour on its opposition to the Welfare Uprating Bill. He remains keen to exploit the dividing line between the two parties, while Cable remains keen to distance himself from some of Osborne’s language on welfare. His performance today underlined his ability as a political strategist.

It wasn’t possible to have a credible fiscal plan, he said, if you thought you could deal with the deficit without touching the welfare bill. ‘You can’t just say I oppose this, I oppose that,’ he said disparagingly, repeatedly mentioning the choices that he had had to make on welfare, by way of contrast to the picture of constant opposition that he was painting for the Labour party. He also listed decisions he had taken on reducing that bill, including decoupling benefits from inflation. As he mentioned each cut, he added: ‘Opposed by the opposition, opposed by the opposition.’

Give the perfect gift this Christmas. Buy a subscription for a friend for just £75 and you’ll receive a free gift too. Buy now.

Show comments
  • jack loach

    “ Honours among Thieves.”

    Sods —–


    For almost two
    decades we have strived to get justice for the injustice we have
    suffered at the hands of a world renowned bank— PICTET & CIE.

    Two yorkshiremen
    both running their own small family businesses trying to resolve the
    problem by taking all the correct legal procedures to recover their

    The matter was
    raised in Parliament – twice– the FSA investigated the matter
    concluding that PICTET had rogues operating in their London Bank —
    but the rogues had left —saying no one left to prosecute.??? —–
    so there.

    We then
    approached the Financial Ombudsman Service. (FOS) — our case was
    dealt with by seven different people —- then our numerous E-Mails
    were ignored — nobody would speak to us ——-so there.

    We then asked the
    SFO ( Serious Fraud Office.) to investigate our case —- the
    criteria of our case ticked all their boxes. — we were instructed
    not to send them

    documents/evidence.—— in fact they wrote to us advising us to go
    to the Citizen’s Advice Bureau.(CAB.)

    Richard Alderman
    the SFO boss —- who responded to our letter was the same man who
    would not investigate the “ Madoff” scandal or the “Libor”

    The MP’s
    committee —- said he was sloppy— and the SFO was run like “
    Fred Karno’s Circus” —– it was an office of fraud.—– so

    Our M.P.
    approached our local Chief Constable to investigate—– he was
    called—- Sir Norman Bettison— Chief Constable of West Yorkshire
    Police —- a force that made “ Dad’s Army” look like the S.A.S.
    They were inept – corrupt —malicious — from top to bottom. We
    were criminally dealt with by the Forces Solicitor—- the Head of
    the Economic Crime Unit —-and the Chief Constable —– so there.

    We were then
    advised to pass our complaint against West Yorkshire Police to the
    I.P.C.C. – which we did — they advised us to make our complaint
    to —- the West Yorkshire Police — we did with reluctance — all
    we got was abuse and obfuscation. —– so there.

    Sir Norman
    Bettison —- The Forces solicitor— and the Head of the Economic
    Crime —- have all been removed from their posts and facing criminal

    —— so there.

    We even sought
    justice through the Courts — culminating in a visit to the Court of
    Appeal-London.— On leaving the Courts of Appeal that day our
    barrister a “rising star” informed us — that if that was
    British Justice then you can keep it. He quit the law and moved to
    Canada —– so there.

    A few years later
    we learned that one of the judges ( Lord Justice.) in our case at the
    Court of Appeal was related to a senior executive of the Pictet Bank
    —–so there.

    The Ministry of
    Justice passed our case to Lord Myners to investigate — we would
    rather have had Mickey Mouse or Donald Duck do it. — to this day we
    don’t know

    —whether he did
    anything or not —- probably not — seeing that his wife was on the
    Pictet Prix Board.

    Pictet & Cie
    .Bank — voted private bank of the year 2013.

    Ivan Pictet —-
    Voted banker of the year 2012. —- the senior partner — lied on
    numerous occasions and had documents destroyed — also said genuine
    documents were forgeries. —– so there.

    Ivan Pictet in
    Oct. 2013 —- Given the Legion of Honour — but saying that —-
    honours were given to Hitler — Eichmann — Mussolini —Franco
    — he’s in fitting company. —-so there.

    RAPHAEL.Q.C. — Peters & Peters.London. They were the banks

    Raphael.Q.C. along with Ivan Pictet withheld crucial documents
    requested by the High Court —- the FSA —- and the police Fraud
    Squad. —-so there.

    Raphael.Q.C. became an Honorary Queens Counsellor in March. 2012.

    Raphael.Q.C. became a Master of the Bench in Nov.2012.

    An expert in
    Fraud —the Doyen of Fraud Lawyers. —– so there.

    This says a lot
    about Banks — the consensus of opinion is that they are highly paid
    “crooks” —- no wonder they voted Ivan Pictet banker of the

    It appears that
    crimes in the “establishment.” are honoured by their peers.


    Full Story.—-
    “google or Yahoo ”




    Ivan Pictet/Monty

  • Matthew Whitehouse

    That is actually what George Osbourne will look like soon

  • Jebediah

    Points a good one. All Labour have done so far (all they’ve had to do) is oppose every cut. It’ll be different closer to the lection when they actually have some policies for the media and the Coalition to address.

  • tomdaylight

    That picture just looks like Iain Duncan Smith.

  • Mike Barnes

    Of course he’s coming round to Cable’s way of thinking because Vince is right.

    Keynesian thinking was right 80 years ago it’s right today and it’ll be right in 80 years time too.

  • Jim20

    This seems to mean that everybody is being lined up on the same page for even more money printing, prepare to get poorer at a faster rate.

  • HooksLaw

    In what way does focussing on growth as opposed to inflation impact on the deficit?
    The Brown era had low inflation and consistent growth and he still increased the deficit. Indeed given that we should have been running surpluses in this benign era, the deficit ended up £300 billion higher than it should have been.

    So can you explain please?

    • perdix

      Mr Hooks Law, I miss your comments on Political Betting blog. Were you banned for being knowledgeable, honest and polite?

      • GaryEssex

        None of the above, I think.

    • dorothy wilson

      Perhaps because the supposed growth was built on borrowing – both by the government and individuals.

    • Rahul Kamath

      If you mean the BoE targets, basically it will allow more QE and more unconventional monetary policy measures. Essentially the Bank goes from targeting 2% inflation to targeting say 4% NGDP growth. That could comprise up to 4% inflation and 0% real growth. Which would be quite helpful in deflating away existing UK debts.

      I don’t think there is any direct impact on the deficit except that it allows GO to do more stuff on the fiscal side as he has a bigger cushion on the monetary side. If monetary policy kickstarts growth, then even better.

      The NGDP guy is a professor named Scott Summer (or Sumner). He has a blog if you want to read further.

    • GaryEssex

      I think you are confusing debt with deficit – as most politicians (including Nick Clegg) seem to and when it suits them. The deficit has never been £300bn.

  • Thalassios

    “‘of course I very much wanted to hit the (debt) target’, but would rather avoid a large swathe of cuts than ‘giving myself the satisfaction of hitting the target and the impact that would have on the economy and the unnecessary pursuit of a target'”
    Excuse me? Is he saying that pursuing the debt target he set is unnecessary, or that pursuing any debt target is unnecessary, or that pursuing a certain debt target is unnecessary if it involves cuts beyond an unspecified degree?
    In any case, what is the point of setting any target to begin with if, in the final analysis, it is unnecessary? Put another way, in the final analysis what is necessary? Can that be stated so we can then know where we stand?

    • HooksLaw

      He is saying what is obvious unless you are deaf. He is saying quite sensibly he is not throwing the baby out with the bathwater. As he pointed out in the Autumn Statement…
      ‘Then there are those who say that despite all that has happened in the world this year, we should cut even more now to hit the debt target.
      That would require £17 billion of extra cuts a year.
      Let me explain why I have decided not to take this course.
      We’ve always argued we should let the automatic stabilisers work.
      We have not argued we should chase down a cyclical or temporary deterioration in the economy, particularly one which our own independent body says is largely driven by problems abroad.
      That is also the judgement of the IMF, the OECD and the Governor of the Bank of England.’

      • Thalassios

        Cyclical or temporary, largely driven by problems abroad. Hilarious. If it is cyclical then presumably it isn’t driven by problems from abroad. If it is temporary, but driven by problems from abroad, how does one measure the temporary nature of these problems that are abroad? Is there an independent standard by which one can measure the standards abroad to be temporary? What is it?

  • @PhilKean1

    So, in drawing closer to the Cable point-of-view

    – it could be said that Osborne, the man who – before the crash – had promised to stick to Labour’s spending plans, has effectively lost the credibility he didn’t have when he got the job as Britain’s Chancellor.

    Not only have Cameron and Osborne failed to repair Labour’s damage and get the economy growing again, but their complacency, weakness and obsession with playing politics has made them waste a fantastic opportunity.

    • H

      Oh yes, coming into office in 2010 was a fantastic opportunity. Not.

      • @PhilKean1

        They had a fantastic opportunity to rid us of, at that time, the most unpopular and hated ever Government and PM, and win a majority that could have righted the wrongs of the previous 20 years.

        They cocked it up, winning defeat from the jaws of victory.

        • Andy

          Problem is in 2001 Blair won 10,724,953 votes and got 413 seats. In 2010 Cameron won 10,703654 votes and got 306 seats.

          There is your answer.

          • Mal

            And still not corrected. I think his case is made.

          • 2trueblue

            Absolutely correct. For every Tory MP it needs 44, 000 votes (or there abouts) where as Liebore need 29,000 votes to get a seat. That is why the bourdaries must be sorted, but the LibDums and Liebore think not.

            • Jenny Barnes

              ” it takes 34,989 votes to elect a Conservative MP, 33,350 votes to elect a Labour MP and 119,788 votes to elect a Liberal Democrat MP

              that’s approx 3 times as many votes per MP for LDs as either of the other 2 parties. Why should the LDs should help the Tories out over the small difference between them and Labour, when the Tories opposed a change that would make the relationship between votes and mps more equitable across the board?

              • 2trueblue

                Why would the Tories be interested in boundary changes if the disparity were so little? And if the LibDums had such a disparity why on earth would they be against it? In any case if you look at the total vote gained by the Tories in the last election there should not need to be in a coalition currently.

    • HooksLaw

      Before the crash. So meaningless. We had the crash in case you were asleep in that period and the economy shrank by 7%.

      • @PhilKean1

        Don’t know what you are going on about.

        My point was that how can any supposed Conservative Chancellor ever be taken seriously if he once agreed to adhere to Labour’s spending plans?

        • Chris lancashire

          Oh, about the same as any would-be Labour Chancellor who agreed to adhere to Conservative spending plans. G Brown 1996.

      • dalai guevara

        The economy shrank by more than 7%. Please add the devaluation to every single outside currency of your choice to get to the true figure.

Can't find your Web ID? Click here