Cameron must row back on Ancient Mariner gloom

David Cameron tried to surf the public mood in his speech to the Institute of Directors in Manchester yesterday. Switch on the TV news, he said, and it is plain that we live in perilous economic times. Quite. Half the time one wonders why Robert Peston, the BBC's business editor, doesn't dispense with the coloured trousers and wacky socks look and don the whole Grim Reaper garb, scythe and all.

It is not Pesto's fault. It is grim out there. As Sir Mervyn King, the Bank of England Governor, summarised it: "We have been through a big global financial crisis, the biggest downturn in world output since the 1930s, the biggest banking crisis in this country's history, the biggest fiscal deficit in our peacetime history, and our biggest trading partner, the euro area, is tearing itself apart without any obvious solution." Don't swerve from telling us like it is, Merv.

Yet if centuries of capitalism have taught us anything, it is that there is no such thing as a crisis from which there is no recovery. Apocalypse now can mean opportunity tomorrow. The glass that's half full? Stick around and see it running over next year. It is all a matter of perspective.

Take the Coalition Government and its shifting view of events. On Tuesday, George Osborne, the Chancellor, counselled against unhelpful speculation over Greece's fate. Loose lips sinking economic ships and all that. Yet the next day, after Sir Mervyn had put in his tuppence worth, the Prime Minister had decided he was just about out of patience with the eurozone and the dithering of its leaders. Make up, or you are looking at break-up, was how he summed it up. By yesterday, judging by his Manchester speech, the mood had darkened still further. The talk was of storms and shelter and doing "whatever is necessary" to keep Britain safe.

While one wouldn't wish to underestimate the difficulties ahead, the Coalition does seem to have proceeded with unseemly haste from a constructive position regarding the troubles in the eurozone to a wholly negative one. Suspicious minds must wonder why.

This week, if one had a mind to view things a certain way, was a not-half-bad one for UK plc. The jobless total is falling, albeit with more people having to settle for part-time work, and youth unemployment up on this time last year. The UK growth forecast was cut, but it remained, just, on the positive side at 0.8%. Most cheering of all, General Motors announced a £125 million investment in Vauxhall's Ellesmere Port plant, safeguarding 2000-plus jobs, creating hundreds more, and generating sighs of relief from suppliers who in turn will be able to take on more staff. The unions are happy, GM is happy, even Vince Cable, the Eeyore-ish Business Secretary, called it a "good story".

Mr Cameron duly trumpeted that good news in his speech yesterday, but overall the mood he struck was pessimistic and fretful. Fresh from his Manchester non-pep talk, he let it be known that he was to hold a video conference with the leaders of France, Germany, Italy, the European Commission and the European Council. From the British Prime Minister this was less a case of "Crisis, what crisis?" than "Crisis, you betcha!"

Since it would seem contrary to common sense to inject more drama into a crisis that hardly needs it, one has to wonder what game is afoot here. Why should the Chancellor start the week warning about the dangers of speculation, and the Prime Miinister end the week by indulging in it?

And it is, lest we forget, speculation. Do correct me if I'm wrong, but was the Sir Mervyn King who was so sure of his doom-laden forecast this week the same Sir Mervyn King who was on duty when the biggest financial crisis in living memory hit? And are the rest of the massed ranks of gloom-mongers the same who came to bury Britain as it exited from the Exchange Rate Mechanism in 1992? That, after all, was the last great economic crisis from which there was said to be no bouncing back.

It suits Mr Cameron to play doom-monger because he is a Prime Minister in the grip of mid-term blues. His austerity medicine is not working, but the last thing he wants is a second opinion on the patient. Especially if that opinion is coming from Ed Miliband, the Labour leader, and arrives on the back of a socialist victory in France. To admit there is an alternative, to go for growth, would be to acknowledge the last two years have been a waste of everyone's time and, more importantly, many people's jobs. How much more politic to go negative, to line up the eurozone to take the blame for what ails us here. Debate over, job done.

(Not that Mr Miliband appears to have any more of a clue on what to do about Greece. He wants a "proper plan for growth and jobs in Europe". Tell us more, Ed, and tell us who would be paying for it.)

The only thing that can be said with certainty about the uncertainty all around is that the wrong people will end up paying for it. There is already talk of mortgage payments in Britain rising as banks, stung by a Greek exit, pass on the costs of higher borrowing. If Mr Cameron is serious about doing "whatever is necessary" to protect the UK public from what is coming, he should start by telling the banks, particularly the ones bailed out by the taxpayer, that he would take a very dim view of this indeed.

The Prime Minister would do well, in general, to row back on the Ancient Mariner gloom and not be tempted to use the eurozone mess for short-term political gain. That could cost us all – the youngster waiting for their first job, the worried home owner, the concerned employee and the investment-starved employer – dear. This doesn't mean adding rose-tinted spectacles to the national shopping list. But when there is crisis, crisis everywhere, don't let panic and political posturing topple us into the drink.