Eric Pickles has admitted that Tory economic polcies may not work – and suggested that the government will be in real trouble if that is the case. Speaking at the Cambridge Union, Pickles said:
“If our economic policy doesn’t work, then we’re both (Tories and Lib Dems) in a great deal of trouble.”
This is the first time that a senior member of the cabinet has openly admitted that George Osborne’s hyper-austerity measures could fail. This will heap further embarrassment onto the chancellor, after GDP was confirmed to have flatlined over the past six months, and Barack Obama carefully avoided backing his austerity plans at a press conference this afternoon.
Obama avoided discussing deficit reduction in his opening statement, despite some careful prompting from Cameron in his statement. Obama then went on to stress need for investment in infrastructure – which echoes Labour’s call for investment in growth (such as housing), which has been ignored by the government. It has been widely seen as a snub.
In addition, the OECD today issued its third downgrade to the UK’s growth forecast in just 6 months.
Ed Balls responded to the latest GDP figures, saying:
“By making a political choice to cut further and faster than any other major economy this Conservative-led government has choked off the recovery when it should have been secured.”
Obama also said this morning that if things are not working government’s should try other things. Cameron was very keen to get an economic endorsement from Obama, but he failed. Will he now take Obama’s advice and try something different?