With the dust still settling the morning after a bruising final televised debate ahead of next Thursday’s general election, the leaders of Britain’s three main parties stand accused of failing to face up to the 800-lb. gorilla in their living room: just how the next government will to tackle the UK’s massive deficit.
Conservative leader David Cameron was judged by polls to have narrowly prevailed over his rivals in last night’s debate, which was devoted to the economy. But no one got credit for plugging the gaping holes in the parties’ plans to tackle Britain’s public spending.
The lack of candor stems from all three leaders' recognition that it is politically perilous to come clean about the pain that will result from sweeping and virtually inevitable government cuts ahead, say analysts.
“It would be electoral suicide,” says Michael Wickens, one of an array of eminent economists who penned an open letter earlier this year warning of the urgent need to wipe out Britain’s underlying structural deficit within five years.
Austerity measures could sink next government?
Ahead of the debate, there was an illustration of what lies ahead for the UK when it was reported that the Bank of England’s governor, Mervyn King, had told an Australian economist friend that the incoming government would be so unpopular after unleashing the necessary austerity measures that it would not be elected again for a generation.
Nevertheless, the leaders still seized on their final chance last night to make their pitch to the British public.
Seeking to bounce back from a disastrous incident on Wednesday in which he called an elderly woman a "bigot," Prime Minister Gordon Brown warned that a government headed by Mr. Cameron would risk killing the fragile recovery by slashing spending too quickly and implementing the sort of hard-line cuts implemented by previous Tory administrations of the 1980s and 1930s.
The Conservative leader countered by accusing his Labour opponent of desperation, telling viewers in his last pitch: “There’s something you need to know about me, which is, I believe the test of a good and strong society is how we look after the most vulnerable, the most frail, and the poorest.”
Nick Clegg, the leader of the centrist Liberal Democrats, had one of his best moments in an upbeat closing speech designed to appeal to voters still unsure if his party’s surge in the polls can be translated into a real result next week.
“Don’t let anyone tell you it can’t happen, it can. This time you can make the difference,” he said.
Brown: weak polling, disrupted campaign events
Polls published after the debate suggested viewers felt Mr. Cameron won.
A YouGov poll for The Sun newspaper recorded 41 percent of people saying he had performed best, compared to 32 percent for Mr. Clegg and 25 percent for Mr. Brown.
A ComRes poll for ITV, a television station, put the Tory leader at 35 percent, Clegg at 33 percent, and Brown at 26 percent.
With the clock now ticking down to voting day next week, last night may have been the prime minister’s final chance to change the course of his party’s flagging election campaign, with polls continuing to show it in third place.
Indeed, when the launch of a new Labour poster was interrupted today by a car crash, media covering the event detected a fatal symbolism. Just as Brown was about to speak about the new campaign, a Volkswagen Golf smashed into a bus shelter yards away from where 10 cabinet ministers were lined up in front of the posters in Birmingham.
Business Secretary Lord Mandelson denied afterward that the smash was a metaphor for his party’s campaign.
Britain going the way of Greece?
A sobering reminder of just what is at stake for the British economy has meanwhile been playing second fiddle to coverage of the election, in the form of the news that the debt-stricken Greek government had agreed to a draft outline of a €24 billion ($31.8 billion) rescue package that will include massive cuts in wages, state benefits, and tax increases.
With a deficit of 13.3 percent of GDP – compared to 9.8 percent in the case of Greece – the UK’s own debt has led many to suggest it is the Mediterranean state writ large.
Professor Wickens stresses that the much larger UK economy is likely to mitigate against the type of crisis Greece is now experiencing, but warns that urgent action is needed.
“This is an older problem that is steadily getting worse,” he says. “Since 2001 expenditure on welfare, schooling and health has been doubled while revenue raised from taxes have not matched that.”
“Only Greece seems to have had a structural deficit for as long," he adds. "Even when you look at other countries like Ireland and Spain that are facing major deficit issues now – in 2007 their expenditure and revenues were roughly in line.”
When it comes to next Thursday’s election, the choice facing the electorate has been cast in the form of either four years of draconian spending restraint under the Labour Party or Liberal Democrats on one side, or else five years of cuts under the Conservatives that would be unprecedented since World War II.
Britain’s institute of Fiscal Studies, an independent think tank to whose judgment all three parties largely defer, this week warned that taxes will almost certainly have to rise after the election.
It accused all three parties of failing to be open, but concluded that the Conservative Party had the biggest shortfall in its plans for public spending cuts forecast for between April 2011 and March 2015.