We still wait for a credible conservative economic policy

CBI conference time and the political leaders have been speaking to delegates. David Cameron's economic policy seems to have shifted again. The new emphasis is on growth - that's how the speech has been spun. The talk about cutting public debt is still there, but there is little sign of joined up thinking in the Conservative Party. As the Financial Times Editorial today notes, "rather than economising on their aspirations, the Tories keep finding new ways to spend."

Cameron in his speech suggested that some argue that the public sector deficit doesn't matter and he responds that "If investors see that there is no will at the top of government to get a grip on our public finances, they are going to seriously doubt our country's creditworthiness." Maybe - we actually don't know - but that is why Labour has a commitment to cut the deficit in half, which Gordon Brown emphasised in his speech to the CBI. The Tories do not have a similar commitment (but they do have lots of spending pledges). The best Cameron could point to in his speech was a list of items previously heralded during his party's conference, which will make but a small dent in the debt. If he is serious about getting serious and being direct then we need some more detail.

The grand plan seems to be a national loan guarantee scheme (ie using taxpayers' money to back loans to business). This sounds very much like more government intervention. Increased lending to business would be paid for in a Tory emergency budget in the summer by banks not paying bonuses now but instead lending the money. Cameron spoke in favour of infrastructure spending but with little in the way of actual commitments or time frames.

Towards the end of his speech Cameron stated that it was business, not government, that created jobs. But the problem with being in recession is that it is business which is shedding jobs. We can take some comfort from the fact that unemployment has not risen so far as much as many had feared it would. Nevertheless, the stark fact remains that if the government deficit had not expanded, or if we had followed Tory calls to cut the deficit now, many businesses would have gone to the wall and many more would be out of work. And the same applies to that part of the deficit which has been caused by saving the banking system - many businesses would not have made it through the winter without it. This hasn't been about government crowding out the private sector; it has been about government stepping into the gap as the private sector shrank.