‘Didn’t fix the roof while the sun was shining’

This is a pretty good soundbite the Tories have. They used it again yesterday. And why not? It’s punchy, and contains some truth about recent government borrowing – although the situation is a bit more complex.

I thought it might be interesting to take this roof/sunshine metaphor and see how it deals with economic policy over the Tory years.

When Margaret Thatcher took over the running of the house, it was not in good shape. And as the storm clouds gathered, she and Geoffrey Howe kicked everyone outside and locked the door. The rain poured down, and many of the residents tried to get back in through the windows, but Norman Tebbit chucked roof tiles at them until they stopped. It was for their own good.

Finally, the rains abated. The people, drenched and shivering, were gradually let back in to the now badly damaged house.

As the rainwater was slowly clearing, the Tories saw the sun starting to shine. So they sent people out into the garden to enjoy it. Then they pumped tons of CFCs into the air, creating an ozone hole above the house, making the sun far more dangerous. Then Nigel Lawson crept up onto the roof and coated it with flammable tar, while also setting up a series of large magnifying glasses mounted on poles around the gutter, pointing sunwards. Before long, the roof started to smoulder and burn.

Seeing this, most of the Tories rushed into the back yard and performed a rain dance, while a few of them scurried off to concrete over the nearby flood plains.

The rains came, in great quantity, and everyone scrambled inside (although by this point Thatcher had been forced out by her unruly maintenance team).

John Major instructed Norman Lamont to grab the biggest sledgehammer he could find and start smashing holes in the roof. This went on until George Soros reached in through one of the holes, grabbed the hammer, sold it, and in the process accidentally dropped a big tarpaulin over the roof.

Things gradually calmed down and started to dry out, although most of the furniture was wrecked by now. Major started chirping about ‘green shoots of recovery’, although as these shoots were coming up through the rotted, damp-sodden floorboards, not everyone was impressed. Ken Clarke got up on the roof and filled a few of the holes in, although the ash from his cigars did threaten to start small fires now and then.

The residents’ association finally replaced the management company.

In his first four years or so, Gordon Brown actually did a prodigious amount of roof-fixing. But his focus shifted to replacing the soiled furniture and dilapidated appliances, about which residents had for years been getting rightly angrier and angrier. The roof received less attention, although a couple of bouts of rotten weather came and went, which the house survived in better shape than many others in the neighbourhood.

Now it’s really pouring, and the roof could really be in better nick – although the idea that the neighbours all have much better roofs is way off the mark.

But – and now, if you don’t mind, I’m going to drop the metaphor, having dragged its carcass behind my pickup until only a bloody and formless mass remains – there’s one big difference between now and the last two recessions. The government may be somewhat restricted in how big and lasting a fiscal stimulus it can apply – as was also the case previously – but it’s not ruling it out ideologically. It’s doing what it can. And so too is there a hefty monetary loosening underway, as was ruled out by government policy in the last two recessions.

This government doesn’t believe that ‘if it isn’t hurting, it isn’t working’. It isn’t obsessed with arcane money supply targets. It doesn’t treat the exchange rate as a virility symbol. And it doesn’t believe that mass unemployment is ‘a price well worth paying’ for short-term balancing the books.

It’s certainly made some mistakes, although it’s by no means alone in that. But now it’s doing more or less the right thing, and so for the first time in my lifetime, a recession will be fought with strongly counter-cyclical fiscal and monetary policy.