The Coalition’s Plan B?
One serious charge against the coalition’s economic policy is that it lacks a “plan B” if things go pearshaped in 2011. (See for example my own article on this with Chuka Umanna).
In as much as Osborne has a plan B it is for more QE from the Bank of England. Today’s inflation numbers provide a further reason for caution – higher than expected inflation strengthens the hand of the hawks on the MPC, making such a monetary stimulus less likely.
So today’s claim from Philip Stephens in the FT that Cabinet Secretary Gus O’Donnell has written a paper emphasing the uncertainity in the OBR’s forecasts and calling for “if not a plan B” than at least a series of “possible stimulus measures” is important.
Politics Home reports that government sources (I’m guessing Treasury) are briefing that “Treasury ministers” have not asked for a “plan B”. But that is not a denial of the FT story, which is that a paper arguing for a quasi-plan B is circulating in Number Ten and, presumably, the Cabinet Office.
Are we seeing a divide emerge between Number Ten and the Treasury? Is Number Ten getting nervous about growth whilst the Treasury refuses to contemplate any alternative?