How naive is Osborne?

Le Monde have written an article yesterday on the shadow chancellor, and it’s getting lots of cover on Twitter. Which is great if your French is good. If it’s not, you’ll be a bit stumped. So below I’m putting my translation of this article.

There is nothing to be done! George Osborne has failed to demonstrate he has the makings of a Chancellor despite several years in David Cameron’s shadow cabinet. His youthful looks and alleged inexperience dog this 38 year old aristocrat.

As the British elections get closer – they will be held before June 3 – the likely number two of a Conservative government looks increasingly like the weakest link in team Cameron.  And his potential handling of the economy, the core concern of the British, is undoubtedly a reason for the closing gap in polls between the Tory leader and Labour prime minister, Gordon Brown.

Mr Osborne’s orthodox ideology for handling of public finance issues raise concern, as it seems dogmatic. Never mind that the recovery is more fragile than expected. Never mind that the country very narrowly emerged from recession, when experts expected a sharper rebound. Or that the International Monetary Fund has called for governments not to damage the faltering growth with budget saving measures or tax increases, thus endorsing Labour policy. We must now, insists Osborne,  slash the deficit (12.6% of gross domestic product for fiscal year 2009-2010) to alleviate the debt for future generations.

As for Mr Cameron, he has trouble adapting his program to an economic situation that he hadn’t anticipated. “We can’t go on like this. I’ll cut the deficit. Not the NHS” said one of his campaign slogans, without the Conservative candidate being able to explain how he will improve the state finances while improving its policies.  He is caught between two incompatible promises in the short term. To tackle an exponential level of  debts  (it should represent 80% of GDP by 2014), which is Osborne’s priority, whilst not going back to Thatcher’s policies which destroyed public services in Britain.

Pending clarification of his position, the Tory leader wants to convince that he knows what he is doing, and that his economic team is up to the task. He never misses an opportunity to boast about his future chancellor, who accompanied him in his takeover of the party in 2005 and with whom he created the outline of this “compassionate conservatism”.

At the same time, he asked Ken Clarke to be more visible [by returning to cabinet as Minister for Business and Trade]. John Major’s former chancellor, who held the purse strings between 1993 and 1997, the last time the country emerged from a recession, can’t be accused of inexperience. Cameron hopes that the presence alongside Osborne of this man will hopefully reassure his fellow citizens, and will be, for the City, a sign of seriousness.

Indeed, the financial community in London, proponents of budget cuts,  are unable to take Osborne seriously either. Cameron’s indecision is partly to blame, but is  not solely responsible.  Osborne, said to have been born with a silver spoon in his mouth, is accused of a poor understanding of  business, unlike his Conservative predecessors who came from Banking (Nigel Lawson, John Major, Norman Lamont) or Law (Geoffrey Howe). It is thought that in case of a victory, the new chancellor will not enjoy the support from key members in the Treasury, which will be weakened by the departure of several respected civil servants.

And then there’s [Osborne’s] stonewalling, his shallow analysis, his purely political approach to any policy issues.  His “intellectual lightweight”  status, added to his lack of courtesy and punctuality, is measured in terms of all these small – and not so small – errors that pepper his speeches. Thus, at the Conservative Party conference in October 2009, he overstated by 3 billion pounds the savings that the state would make with an increase in the age of retirement. Not long ago, he also said that the current Labour Parliament was the only one in recent history to have seen GDP per capita decline. This was a mistake, as this was also the case between 1979 and 1983, as highlighted by the Financial Times.

According to his detractors, Mr. Osborne, who studied history at Oxford, is also guilty of not fully understanding the mechanisms of finance. His support for a Bonus Tax and Obama’s plan to separate retail and investment banking left people bemused. His apparent Euroscepticism is a worry when relations between the main European financial institutions and the European Commission are strained, especially over proposals on hedge funds or insurance. And when Mr Osborne suggested the transfer of regulatory functions of the market from the competent Financial Services Authority,  to a Bank of England poorly equipped for this, the chorus becomes more  mocking: “How naïve the future chancellor is.”

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