Here is a fine example of the dangers of politicians writing seemingly innocuous op-eds for newspapers.
Ahead of a trip to Dublin in 2006, George Osborne used an article in The Times to pay homage to the Irish boom. The opening paragraph about Ireland’s “shining example” to economic policymakers is a classic:
A generation ago, the very idea that a British politician would go to Ireland to see how to run an economy would have been laughable. The Irish Republic was seen as Britain’s poor and troubled country cousin, a rural backwater on the edge of Europe. Today things are different. Ireland stands as a shining example of the art of the possible in long-term economic policymaking, and that is why I am in Dublin: to listen and to learn.
The conclusion is almost as cringeworthy:
The new global economy poses real long-term challenges to Britain, but also real opportunities for us to prosper and succeed. In Ireland they understand this.
They have freed their markets, developed the skills of their workforce, encouraged enterprise and innovation and created a dynamic economy. They have much to teach us, if only we are willing to learn.
To be fair to Osborne, many of his arguments are still valid even after the crash.
A well educated workforce, top notch R&D investment, and competitive tax rates to encourage investment are all as important now as they were during the boom years.
But there is not a word of caution about potential imbalanaces in the economy. No mention of the racy property market, reckless lending, or his views on the dangers to Ireland from having joined the Euro.
UPDATE: Mark Hoban just told the Commons that Ireland made the same mistakes as Brown. “The reality is, Ireland did get some things right, it has a flexible labour market, it has low taxes, but they made the same mistake that the previous government did; they failed to regulate their banks properly.”
Poor regulation wasn’t a problem identified by Osborne at the time. Indeed, he thought Brown had some lessons to learn from the Irish light touch. He warned that Britain was “falling behind” Ireland: “Poor skill levels, rising taxes, bureaucratic planning controls and chronic overregulation are high on the list of culprits.”
Jim Pickard
Kiran Stacey