Well, there it is. Not for the first time in my career as a superannuated pundit, my advice to those in power has been spurned. In my last column, I suggested to young Ed Miliband that he should make Ed Balls his Shadow Chancellor. So what did he do? He appointed Alan Johnson instead.
Now, I have nothing against Alan Johnson. On the contrary, I once favoured him as a possible successor to Gordon Brown.
Moreover, the appointment is undeniably clever; Johnson is a working-class lad put up against a toff at a time when the big political issue is snatching jobs and welfare benefits from the poor.
However, in spite of all that, the choice is the wrong one – not because of the personalities involved, but because of the policy issues underlying it.
One reason offered for the appointment was that it would help to unify the Parliamentary Labour Party behind the new leader.
The idea was that it would reassure the Blairites that they were not about to be marginalised, presumably on the assumption that the supporters of David Miliband are such bad losers that they needed this degree of reassurance. If so, they didn’t so much deserve a consolatory cuddle as a hearty kick in the backside.
In any case, there are plenty of other important jobs which could have been – and were – offered to them to achieve the same end, if it was needed.
So I fear this appointment is genuinely based on policy, and it signals that Ed Miliband has chosen not just the wrong Shadow Chancellor but also the wrong strategy for dealing with George Osborne’s cuts.
What it means is that David Miliband’s supporters haven’t lost at all; they’ve
won. Almost the only significant issue between the two brothers at the election seemed to be that David was in favour of following Alistair Darling’s plan to cut the budget deficit by half within four years, whereas Ed was not.
It was on that basis that I gave my second preference vote to Ed – and I suspect that it was for many others, too. Ed may argue that he did nothing overt to encourage us in this view, but he did nothing to discourage us either. If I’d known the truth, I wouldn’t have voted for him.
Given all that, however, I suspect that Johnson will put up a good show whenever he faces Osborne across the dispatch box. His interview with the Observer last Sunday was encouraging, displaying a degree of belligerence which would not have disgraced Ed Balls himself.
But I fear that Osborne will seize every opportunity to remind Johnson that the actual difference between them is not all that great.
Osborne, alas, will also have one other weapon at his disposal and it is one which was handed to him by Johnson himself.
Just hours after he had been appointed and no doubt still in a state of shock, the
non-university-trained Johnson told a television interviewer that his first act would be to buy himself a primer on economics for beginners.
It was a nice joke from a nice, self-deprecating man, but one that would have been better made in private.
It is not hard to envisage what use Osborne will make of it whenever Johnson gets up to question him. He will say: “Before I reply to the Right Honourable Gentleman, perhaps he will be good enough to tell the House what page he has so far reached in his economics textbook.”
It looks as though we may be about to get a second, and urgently needed dose of quantitative easing – in other words, the injection of new money into the economy in order to stave off a double-dip recession.
Even the Chancellor has let it be known that he is in favour of the idea. Since he is the man whose policies are bringing that recession ever closer, this is rather like the arsonist who sets fire to your house then phoning for the fire brigade.
But if we do get another round of quantitative easing, as I hope we do, I also hope it will be done differently than last time. The whole idea of so-called “QE” is to get more cash circulating in the economy, so as to stimulate activity.
Yet in the last round the money
was effectively given to banks by the
Bank of England buying up the bonds they held. The idea was that they would lend the money out. Instead, they put it in their
back pockets.
So I have a better idea: why not hire a fleet of helicopters, fill them up with £10 notes and scatter them over our inner cities?
It wouldn’t go in anyone’s back pocket, but straight over the counter in millions of shops and thence to producers everywhere. It may not be in Alan Johnson’s new textbook, but Keynes would have approved.
I jest, of course. Nevertheless, the whole idea of QE is to get extra money to people who will spend it. Like, for instance, by giving it to single mothers – rather than by taking it away from them, as this horrible Government is doing. l
