New Tory strategy on economy needed

George Osborne has launched a ferocious attack on Brown in an interview with the Times. Talking about a 'run on the pound' and a 'scorched earth policy' is a high-risk strategy. Confidence in the economy is low, and talking down the country's currency is generally not advisable by any senior politician.

Justine Greening, a member of the shadow treasury team has said that George Osborne is very much reflecting the broader concerns of the business community and John Redwood has written several pieces recently stating that a sterling crisis is a major risk if the government embarks on its tax cuts and borrowing strategy.

The timing of George's intervention is interesting as the G20 leaders meet in Washington. Is this to push the G20 meeting off the agenda? Or is to shore up his own position?

The clamour for Osborne to be 'shuffled' out of the shadow chancellorship continues to grow. The Telegraph has produced a number of opinion pieces this week, starting with Iain Martin, saying that Osborne should be replaced, and this has been followed-up by other commentators and in fairly harsh leader pieces.

And the former party treasurer and Dixons founder, Lord Kalms, has joined in telling the Telegraph, "You need someone who relates absolutely to working people who is heavyweight. I think George is a first-class man, but I'd like to see a bit more grey hair on the front bench... David Davis would be absolutely the right man at this time as shadow chancellor. I am informing everyone who will listen that change needs to happen."

Osborne's supporters continue to point to his sucess in derailing Gordon's election plans last year and point out that Labour want to 'take a scalp'. While all this may be true, I have to say, that I am significantly underwhelmed by the Tory's economic strategy and response to the crisis.


As I pointed out in a previous posting, the Conservatives are at a grave risk of being outflanked by Gordon on tax. What is the Tories' reponse under the current strategy going to be if Gordon announces £16bn of tax cuts? Oppose them? That would be electoral suicide.

David Cameron needs to formulate a new strategy and fast. If Osborne cannot do this, then it is time for someone else to be put in position. Move Osborne to party chairman and preempt the report on 'Nannygate' by moving Caroline Spelman.

Support the tax cuts that Gordon produces, but instead of going along with his wreckless borrowing strategy, start outlining some proposed spending cuts. Nothing from the education or health budgets (which doubtless nonetheless contain huge amounts of potential after 10 years of massive growth). Say that they will not introduce ID cards - saving billions, will abolish the Regional Development Agencies - saving billions, cut back on the non-jobs in local government... there's plenty of potential there.

There is a real risk that on the back of falling interest rates and a massive tax bribe that Gordon decides to go to the country early in 2009. It is conventional wisdom that says politicians do not win general elections in recessions. But John Major did - and as the Tories will remember - he won.