19th September 2018
Established 1872. Online since 1996.

Letter from Westminster

, by , in Features

I am by nature an optimist. I tend to believe that if the will exists then all things are possible.

Even I, however, am forced to concede that the editor of this paper will never accept that the decisions taken by the coalition government to reduce public spending were correct.It has long been the position of this paper that the decisions to cut public expenditure in order to reduce the UK’s budget deficit were wrong. I don’t agree with that but it is a perfectly respectable position for the paper to hold.

In the past the attack has been that the programme of cuts was “ideolo­gically driven”. Again I disagree with that and have explained on a number of occasions that it was a programme born of necessity, not just because of the size of our deficit but also because at the point when the coalition came into government the bond price for UK debt on the international markets was heading for a crisis.

We know what happens when the international markets lose confid­ence in a country’s ability to manage its economy – we have seen that most recently in Portugal, before that in Ireland and before that in Greece.

The coalition view is that action was necessary to stop the slide and to restore confidence and so the steeper cuts were necessary. The editor’s view is that we allowed ourselves to be panicked by the markets unnecessarily. He may be right. We shall never know now but we at least seem to agree that there was a market slide by which we could be panicked. I wonder if we had not responded as we did and if confidence in the UK economy had continued to slide to the point of crisis what view would have been taken then. I sus­pect that the same commentators might have been just a little critical.

The Governor of the Bank of England advised that the crisis was real. The editor of The Shetland Times now takes the view that it was not. Either could be right but it is difficult to criticise the government for going with the former. Not least because his was the advice that was available at the time when the deci­sion had to be made. I have had a quick flick through the editorials of this paper from May and June of last year and I sought in vain the one urging the government to hold its nerve in the face of nervous markets. In truth the paper’s shifting posi­tion shows one thing beyond doubt. None of this is easy and none of it comes with guarantees. The differ­ence between being a media com­men­tator and a government minister is that it is the government minister who takes the decision and who has to be accountable for it.

Acting as the government did does have risks but let us not pretend that any of the alternatives were risk free either. Today Portugal seeks an IMF bail out as a result of the risks they took last year. The risk of not doing as we did was that today we would be doing the same.

Alistair Carmichael MP