Economy: Stick to... no, change... the course

The prime minister and his business secretary today risk sounding like an irritable couple arguing over what route to follow.

"Stick to the course," David Cameron will say in his speech in Keighley.

Perhaps we should just turn left a little, Vince Cable muses.

I told you so, we should turn left now, shouts Ed Balls from the back seat.

What sounds like a new split is, in reality, the public rehearsal of a private argument which the business secretary has been having with the Treasury for some time with Labour cheering him on. Vince Cable believes that when interest rates are so low and growth so invisible it is worth taking the risk of borrowing a little more to spend on building houses and other infrastructure.

The Treasury's answer to him has been: Yes, we'll increase capital (investment) spending but only by making further cuts to current (day-to-day) spending but we won't borrow more. Today Nick Clegg appeared to back that view.

Vince Cable has not overnight turned into Ed Balls. He is not, for example, arguing for a short-term cut to VAT to boost demand. Nor has he turned into the Tory right who are also crying out for tax cuts now which they claim will pay for themselves.

Cable's long, dense and academic article for the New Statesman magazine is described by one of his colleagues as "intellectual masturbation". It is an economist's attempt to answer the critique - made in particular by the Keynesian Professor Robert Skidelsky - that he has connived in Tory policies that have destroyed any prospect of growth. That's why the article was read and approved by the chancellor's principal economic adviser. It is also a piece of political positioning ahead of the Lib Dems' Spring Conference tomorrow.

In other words the view in government is that Vince is just being Vince. Outside the Westminster village though many will ask - is it time the government changed course... even just a little?

PS: David Cameron will claim today that "there are signs that our plan is beginning to work". He will say that exports to developing countries are up, there are a million extra private sector jobs, employment levels are rising in every part of the country (and fastest in the north of England), there's a faster rate of new business creation than at any time in our history and there's been the biggest increase in private enterprises on record - more than a quarter of a million new private sector businesses.

Green shoots anyone?