Within a few weeks, Britain's recession will probably be declared over. Most economists believe the economy grew by a small fraction at the end of 2009, but it takes a while for official statistics to give confirmation. When that happens, the tiny increase in GDP will become a hotly disputed political property. Like warring parents in a custody battle, parties will insist on their unique suitability to care for the infant recovery and deride their opponents' unfitness for the task. The outline of these cases is already clear. The Conservatives will say, meanwhile, that Britain was handicapped in its response to the recession by Gordon Brown's mismanagement of the public finances. In other words, Labour broke the economy and cannot be trusted to fix it. So far, these arguments have coalesced around the issues of the budget deficit and the national debt. Both are at postwar highs, and must be reined in. In non-partisan economic terms, the situation is roughly as you would expect after a recession. Industrial activity plummets, as do tax receipts. Welfare payments and other social costs rise. The public sector compensates for the lack of private sector demand. This averts a spiral of depression, but it is not sustainable in the long term.
At some stage, the economy must be weaned off emergency spending. The political battle lines emerge around the questions of how quickly and by what means. The Tories say that Labour is in denial about the problem and that rash spending promises and mounting debt risk Britain's credit-worthiness. David Cameron promises an emergency budget within weeks of taking office; Labour says that is scaremongering and that the Tories, driven by ideological zeal to embrace austerity and axe public services, would snatch the public props from the economy prematurely. So the argument over the deficit is really a proxy for a wider argument over the role of government in the economy and society. Labour is comfortable with the idea of state intervention, even if, as business secretary Lord Mandelson insists, this should be limited to "strategic" economic forays. The Conservatives see government as more of a hindrance than a help. David Cameron is convinced that the state has grown too big in every direction.
This ideological contest must be debated more explicitly in the campaign to come. The Labour case for more gradual deficit reduction seems to contain a defence of the idea that government should guide and shape the recovery. But to what ends? What ambitions does Labour suddenly claim to have discovered that it did not pursue over nearly 13 years in office? Meanwhile, the Tory plan for an all-out assault on the deficit seems to be part of a wider project to reduce the reach of government in the hope of unleashing new stores of enterprise. Where? How? David Cameron presents himself as the candidate for change, but he does not say to what. Voters understand the financial constraints on the country in the years ahead. So what, under those circumstances, can government reasonably aim to do that will make Britain a more prosperous and a fairer society? No party has offered a credible answer to that question. Victory should belong to the one that does.
A blog for the socially and politically conscious, written by a young, gay activist who strongly believes in equality and justice.