Tory's finally spot the real economic crisis!

George Osborne, speaking at the LSE this morning, finally seems to have twigged the grave nature of the danger facing the country. Britain can borrow no more! As this blog has been warning the danger now is the unstoppable and relentless borrowings being incurred by the Government as they try to cope with the reckless irresponsibility of Gordon Brown's tenure as Chancellor of the Exchequer, little of which has much, if anything to do with the global credit crunch. The speech, in full here, concluded as follows:

Even a modest dose of Keynesian spending – say increasing it by an additional 1% of GDP - means that in the end taxes will have to rise by the equivalent of almost 4p on income tax.

That’s not just a tax bombshell, it’s a cruise missile aimed at the heart of a recovery.

And in extremis, it can mean you lose the confidence of the international markets.

Gordon Brown doesn’t understand that there are limits to borrowing, even after he’s abandoned his fiscal rules.

They are not his limits.

Today everyone assumes the only question is ‘how much more does the British government want to borrow from the markets?’

Talk to former Chancellors and they will tell you that at some point the question becomes ‘how much more are the markets prepared to lend?’

That’s why there are limits to borrowing – not political limits, but actual limits.

Limits to what can be lent and limits to what a country can carry into recovery.

Finally some words of sense from this woeful opposition!