Labour can cash in on Tory vision (From The Northern Echo)

Labour can cash in on Tory vision

10:12am Thursday 11th March 2010 in

• Skip social links
• Print
• Email
• Comments(1)

EIGHTEEN years after Black Wednesday, it appears the Conservatives have still not learned the lessons of sterling’s humiliating crash that momentous day.

David Cameron’s party has now launched a scare campaign to woo voters, warning that the price for failing to do so will be “economic meltdown” at the hands of international finance.

The pound will plummet, making it impossible for the Government to fund its record £178bn borrowing spree and threatening us with a Greek-style meltdown, the Tories tell us. Mr Cameron went further, claiming it was the nation’s “patriotic duty” to remove Gordon Brown, provoking a witty response from Nick Clegg.

“It’s like a protection racket. Vote for us, or our friends in the City will lay waste to your economy, your savings and your job,” the Liberal Democrat leader protested.

I would not argue with that, but this macho vision of a strong pound under iron Conservative leadership is offensive for an entirely different reason – namely, that it would be a disaster for manufacturing in the North.

Only weeks ago, the Tories were rightly attacking the loss of one million-plus manufacturing jobs under Labour, claiming the destruction was even greater than that wreaked by Margaret Thatcher.

Yet they fail to recognise a primary reason for this hollowing out of Britain’s industrial base – the fact that the pound was hideously overvalued for so long. Of course, Mr Brown was the guilty man here, ignoring the consequences for exports of an over-mighty sterling for the decade he was cuddling up to Big Finance in the City of London.

One of the big winners from a strong pound – along with shoppers snapping up cheap imports and holidaymakers heading for the Med – is financial services, able to attract more overseas investors.

But that was then… and New New Labour (under Lord Mandelson) has, finally, recognised its folly and is on a mission to swap “financial engineering for real engineering”.

Furthermore, the Conservatives, of all people, should celebrate a dipping pound, given the searing events of September 1992.

The economy had shrivelled, overvalued within the ERM straitjacket. It was only after Black Wednesday – when the pound fell out and kept falling – that recovery could begin.

Of course, a cheaper pound does not guarantee exporting success – that also requires innovation, high-quality, keeping costs under control – but it is an essential starting point.

Now, many believe last week’s Tory scare campaign was a cynical attempt to distract voters from the embarrassment of the scandal of non-dom donor Lord Ashcroft.

But I am going to take it at face value, as a genuine desire to reflate the pound somewhere close to $2 (it’s currently at $1.50) – which, of course, makes it far worse.

If I was in Labour’s bunker, I would exploit this divide in every town and city with manufacturing jobs and little stake in financial services – because that is almost all of them.

WWHEN gorgeous actress Joanna Lumley fell out with Immigration Minister Phil Woolas over the Gurkhas she invited him around for fish and chips and champagne just to show it was nothing personal.

Somehow, I think Kevan Jones, the North Durham MP and Armed Forces Minister, has blown his chance of a candlelit supper. In criticising her over developments arising from the campaign he said: “Her deathly silence, frankly, irritates me.”