Reaction to Osborne and Laws

The various responses to the initial measures introduced by Chancellor George Osborne and his right-hand man (okay, on his left here!) David Laws fall broadly into two categories.

The political Right and the all-important markets are in approval of the measures, and the Left-leaning commentariat is attempting to criticise in various directions (though with little success).

Burning Our Money has a short and absolutely spot-on post, which I reproduce in its entirety below, with my emphasis added in places:

You'd hardly know it from the BBC and C4 News, but the Osborne/Laws £6bn cuts represent a really decent start in rescuing us from Labour's fiscal catastrophe.

Even more encouraging, many of the cuts have been lifted straight from the TPA's list of recommendations. In fact, adding up list, we reckon almost £5bn of the £6bn came from the TPA/IOD £50bn cuts proposals published last September. Which means they've still got another £45bn's worth already identified and ready to roll.

Naturally the BBC and C4 line is that the cuts will cost countless thousands of jobs, and risk plunging us into the Great Depression Mk II. C4 even ropes in notorious left-wing economics campaigner Danny Blanchflower as support.

But as we've blogged many times, the real risk we face is that the markets lose confidence in our resolve to tackle the deficit and ramp up our borrowing costs. And on that score, the Osborne and Laws show is proving a real hit. In fact, since that post-election sweat when it looked as if Brown might somehow cling on, the market has reduced the rate at which it will lend to HMG (25 year gilt yields are down by almost 0.3% to 4.2%).

Yes, of course, £6bn is a drop in the ocean. But we do need to give credit where it's due. And this does suggest a serious resolve.

The key points there are that what Osborne and Laws have done is exactly right, and is having an immediate and positive effect; also that there is plenty more to follow, already identified. This is the real story of what is going on and of who is competent to handle our economy.