The Great Debate UK
– The author is a Reuters Breakingviews columnist. The opinions expressed are his own. –
Crisis, what crisis? That could be motto for the election manifestos published by Britain’s main political parties this week. Neither Labour nor the Conservatives addressed the country’s fiscal crisis head-on.
Instead, they have sought to bribe the electorate with promises.
There are some good ideas in the manifestos. But there are too many promises to cut taxes and not to touch spending – as well as a general lack of urgency. Once one puts the pledges into categories of good, bad and ugly, there are too few in the former bucket.
The two parties are promising roughly the same fiscal squeeze over the course of the parliament. Labour says it would halve the deficit, which is standing at 167 billion pounds or 12 percent of GDP, over four years. The opposition Tories say they would reduce the bulk of the deficit over five years. But such cuts aren’t deep enough. What’s more, neither party has been prepared to say how they will achieve them.
- Jane Foley is research director at Forex.com. The opinions expressed are her own. -
At the height of the financial crisis few argued against the need for a huge fiscal and monetary policy response. As a result the global economy has moved away from the precipice. For many governments 2010 will bring a different kind of precipice, this will be the year in which many electorates will be made to start paying for their governments’ huge fiscal binges.