Caroline Spelman must be feeling just a little bit smug by now. Since being slated for her forests U-turn in February, the Coalition has excelled itself in the art of U-turning. On prisons, NHS reform, and now News International. Step forward Ken Clarke, Andrew Lansley and Jeremy Hunt. Their about-turns make Caroline's look tiny by comparison.
Who's next, I wonder? With GDP growth so weak recently, inflation well above expectations, and borrowing likely to be higher than he first thought, George Osborne may need to revisit his deficit reduction plans. It's entirely possible that the Office for Budget Responsiblity could warn the Chancellor this autumn - on the eve of his Autumn Statement - that he's not going to deliver his two-pronged Plan A, to eliminate the structural current defict by 2014/15 and have debt falling as a percentage of GDP by then too.
Just recently, Osborne has started talking about the (cleverly disguised) "flexibility built into" his plans. Currently, his fiscal mandate is to eliminate the structural current deficit and meet his debt target one year later (by 2015/16), so he has some wiggle room there. And if that's looking unachievable, next year's Budget could push the target back another year to 2016/17 by triggering a rolling 5-year timeframe.
In reality, the impact of tweaking Plan A would be more political than economic. It would be embarrassing for the Chancellor, and give Ed Balls a lot of ammunition. But it wouldn't necessarily make Osborne change course - his tax rises and spending cuts would still happen as planned, it's just that they wouldn't erase the non-cyclical deficit as quickly as originally hoped.
Of course Osborne would never admit it, but any change to Plan A would be seized on by Labour as a major U-turn. Mainly because he was so bullish about achieving it, in the first place. But he shouldn't feel too embarrassed about U-turning. With so many Cabinet colleagues already embarked on their own U-turn, Osborne won't be alone.
Comments