On the line
- 17 Sep 07, 01:34 PM
Economic stability is the rock on which New Labour's election victories have been built. No wonder then that their opponents - in both the Tories and the Liberal Democrats - could not hold back their excitement at the possibility that that reputation might be destroyed by the sight of people queuing up to take their cash out of the bank.
And yet in the speech David Cameron has just delivered, he pulled back from repeating - let alone escalating - the suggestion he made yesterday that ministers were somehow to blame for the Northern Rock crisis. Just to remind you, the Conservative leader that, "though the current crisis may have had its trigger in the US, over the past decade, the gun has been loaded at home."
Today, though he repeats his criticism of economic growth "built on a mountain of debt", there is not the slightest hint of a direct connection between the government's economic policies and Northern Rock's problems. No wonder. There is a lively debate about whether the regulatory regime set up by Gordon Brown - which, remember, includes the Treasury as well as the Bank of England and the Financial Services Agency - have got their response right (see my colleague Robert Peston's latest blog for an admirably clear summary of the case for and against).
There is another lively debate about whether Britain and Britons are too heavily indebted and, if so, what to do about it.
I struggle to find anyone who believes, however, that Northern Rock's troubles result from government action or inaction. Indeed, Willum Bowter, a former Monetary Policy Committee member and professor of European political economy at the London School of Economics has just told The World at One that that the suggestion is "ludicrous".
Of course, if Northern Rock's problems spread to other institutions, if they are seen to be the beginning of economically turbulent times, few voters will study the economic arguments. Alastair Darling himself recognised this in an interview this morning when he was asked if his reputation was on the line. He replied: "it is, I'm afraid, yes".
