This chancellor isn’t for turning

By Mark Ferguson / @markfergusonuk

The GDP figures are bad. Not “economic credibility destroying” bad – not yet anyway – but bad all the same. A 0.5% contraction in the economy is a disaster at the best of times, but just over a month after Cameron said “Britain’s economy is out of the danger zone and recovering” and unemployment is on the rise, it’s a massive blow to the government. And all of this before some of the biggest cuts, and the VAT increase (which should have stimulated spending in December).

Ed Balls will surely be sat in his Westminster office this morning feeling throughly vindicated. After months of attacking the flawed economic arguments behind the Tory deficit reduction plan (when a growth plan is what we need), only five days into his stint as shadow chancellor he has been presented with a political gift – a huge stick with which to clobber Osborne. His initial response struck the right tone. It was measured. It talked about families, businesses and unemployment. It was the opening salvo from Labour’s biggest artillery weapon, as he locks on to his latest target.

Further down the road at the department of business, innovation and skills, Vince Cable will be distraught. He may even weep. Today was supposed to be the day in which he rode to the defence of the government’s economic policies. He backed them in this morning’s papers, and planned to back them further at a press conference this morning. That press conference has now been moved back to this afternoon. There’s panic on the streets of Whitehall.

While Ed Balls and the Labour Party have seen such a risk on the horizon since the election, the government hasn’t allowed itself to consider the possibility, so much so that the business secretary needs to lock himself away this morning and work out how he can still back these failed policies. Cable went into the election talking up the risks of cutting too far and too fast. Now he finds himself forced to explain how economic contraction as a result of policies he warned against are a “good thing”. Poor Vince. I have so little sympathy for him.

And what of the chancellor? There were no cancellations from him, he was willing to head out and speak to the media immediately after today’s announcement – albeit to give weak excuses about the impact of snow. For Osborne, this isn’t confirmation that Ed Balls is right. On the contrary, this is a mere blip in what he sees as an ideological crusade, to change the state and Britain as a whole. Osborne won’t turn away from his maniacal state-slashing to save the economy, because to Osborne, the state-slashing is of primary importance, the economy a lesser concern.

Ed Balls will attack Osborne with ferocity and confidence in his arguments. Cable will squirm and contort and wonder why he’s in this government – he may even quit. It will all come to naught though, because – disastrously – this chancellor is committed to his reckless course of action.

This chancellor isn’t for turning…