Darling's PBR gamble as the battle lines are drawn for the next election.
Posted on December 1st 2008
Last weeks pre-Budget Report was more than just financial stimulus for our ailing
economy it was also the unofficial start of the campaign to win the next general
election. Of course pretty much everything a politician does is designed to help
keep them in power but the battle lines have been clearly drawn for the first time
since Cameron took on the opposition’s top job. Since the invention of New Labour
it has become increasingly difficult to see the differences in policies between
the two parties and in recent years there have been examples where policy has been
simply based on matching the opposition’s pledges.
Now we have some clear differences in policy on which to base our next election
decisions upon. Do you believe in a tax and spend policy such as that being rolled
out by the Labour Party or do you believe that we need to start exercising some
restraint on borrowing in order that we do not just delay the current pain and in
effect make it much worse some time later.
No doubt we will all have worked out how much better or worse off we are personally
but even those that believe they are better off as a result of last weeks measures
need to bear in mind that all this extra borrowing has to be paid for by higher
taxes in the future. Deflation is what the Government is most scared of as it is
deeply damaging and self perpetuating. If people believe that prices are going down
they delay spending to buy later at a lower price. By putting money in people’s
pockets now the Government is hoping that people will continue to spend and thus
avoid even further levels of unemployment that would occur if they stop.
With the battle lines drawn we should see an increasingly obvious difference in
the parties’ policies which in turn will make it more and more obvious which party
is going to win the next election. Gordon has had somewhat of a bounce in his popularity
since he took decisive action in tackling the banking crisis but unless there is
clear evidence next year that his policies are working he will be out of a job.
If there is positive signs that this latest package of measures is working expect
a snap election in 2009 otherwise the elections will be delayed until 2010 and the
likelihoods of a Conservative Government will be odds on.
