George Osborne conceded little ground to his critics on the Today programme this morning, but there was a notable shift in his rhetoric. To those who have demanded that he produce a "plan B", the Chancellor replied that "flexibility" was already built into his economic strategy.
There is flexibility built into the plan that I announced a year ago... We're talking about the structural deficit, so in other words we allow the automatic stabilisers to operate, which means that the economy can move up and down with the cycle, the government spending can move up and down with the cycle.
It's a point that Osborne could have made at any time over the past year - the government can eliminate the structural deficit (the part of the deficit that remains when the economy returns to growth) even if the overall deficit, owing to higher spending on unemployment benefits (the "automatic stabilisers"), is higher-than-expected. But it's telling that he chose to make it now. Of course, should economic growth continue to disappoint, there's every possibility that Osborne will miss his flagship pledge to eliminate the structural deficit by the end of this Parliament. As I've noted before, anaemic growth means a slower pace of deficit reduction.
Osborne also came close to admitting that the success of his strategy depends on loose monetary policy (interest rates and the exchange rate) compensating for tight fiscal policy (spending cuts and tax rises). He noted: "We of course have an independent monetary policy committee and tighter fiscal policy gives the monetary policy committee greater freedom to operate monetary policy."
Despite the growing clamour for interest rate rises from some quarters, it's clear that the Chancellor both hopes and expects rates to remain at record lows. But how will ministers respond if the Bank of England raises rates prematurely? What is their plan B? That question, sadly, was not put to Osborne today.
As an aside, it's worth noting that Osborne berated the BBC for its allegedly negative coverage of the economy. It's a complaint that almost any politician could make (the truth is that bad news makes for better copy) but Osborne is on less than solid ground here. An economy that was growing at an annual rate of 4 per cent when Labour left office has not grown for the past six months. If the BBC has focused on reporting bad news, it's partly because there really hasn't been much good news. But it's also unwise for the man who repeatedly talked down the British economy in opposition (erroneously describing it as "bankrupt"), to complain of others doing the same.