Nick Clegg and Ed Miliband on the ‘new economy’

4th February 2011

Bill Clinton, as an aspiring presidential candidate, famously said "It's the economy stupid" a phrase that helped him see off George Bush Senior.

This week, Nick Clegg and Ed Miliband seem to agree. But they can't agree who is being stupid and who is being clever. Nor for that matter can anyone else.

Clegg will spend this morning insisting that the Government has a growth strategy reported here on the BBC.

Trailing a speech to be made in Yorkshire, Clegg will say "We are determined to foster a new model of economic growth, and a new economy – one built on enterprise and investment, not unsustainable debt. We seek nothing less than a new model of sustainable growth."

Labour's leader is also focusing the economy too. Ed Miliband's assessment is a bleak one. He is expected to say the UK has its own version of the "American dream" – that each generation will enjoy more opportunities than the previous one but that this is at risk from coalition policies.

The Government hasn't had to look far for advice on the economy this week. In the ‘mostly hawkish' corner, the Institute for Fiscal Studies wants the Government to stick to its deficit reduction programme but it also wants a plan B. This is the Telegraph report.

The IFS warns against a significant giveaway in this March budget, but says the Government should review its austerity programme in 2012 to see if it has the balance right between cuts, tax rises and benefit changes.

Actually interpretation may be everything. The Guardian is more interested in the fact the IFS believes Osborne may not be able to stick to his reduction programme. 

Meanwhile earlier in the week, the National Institute of Economic and Social Research told the Government that with borrowing costs so low there might be room for the Government to hold off on some of its austerity programme.

The NIESR's director Ray Barrell said: "There is no point dashing about in a hair shirt in the snow, it's only going to make matters worse."(Guardian)

So the NIESR a bit of a dove on spending cuts, though it is a hawk on inflation and wants interest rate rises.

So who's being stupid and who's being clever on the economy? Take your pick.

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