UK Economic Prospects with an Election Coming

At my age I should know better than pay much attention to what Politicians say particularly at the time of an election. However what we have is; Eurozone deflation, Japan in its third decade of stagnation, oil price collapse, political instability in the Middle East and on the Russia - Ukraine border, slowdown in China, UK and Eurozone printing money (asset bubble in the offing yet again!) and UK debt increasing all against the background of increasing inequality in wealth and income. Is it too much to ask for a bit of statesmanship and international vision? The evidence thus far is that I do ask too much. Nevertheless let us analyse what we can in the UK with an eye on international implications.

The Coalition Government has reduced the structural deficit i.e. the amount borrowed to support day to day spending. Yes that's right our day to day expenditure continues to exceed our income!! - the shortfall being made up by borrowing. This Government said that it would have eliminated this deficit by 2014/15 financial year. The Office of Budget Responsibility in December 2014 (Economic and Fiscal Outlook) states that (with a whole load of assumptions about growth performance, tax receipts and commitment from an incoming Government to very large further cuts in Public Expenditure) then this deficit could be eliminated in 2018/19. Who was it who said the best indicator of future performance is past performance! So the past 5 years have seen debt grow not decline. This should put into context any claims that this Government has the nous and will to achieve what is now being claimed.

The Labour Party and the centre Left give the impression that they will be fiscally responsible and the unspoken (or not yet spelt out clearly enough) policy is one of growing the economy out of the doldrums. Yet again we hit the issue of performance. The UK economy has found it very difficult to sustain growth in GDP of 3% per annum without problems - mainly inflation and balance of payments. However past experience does show that a Centre Left government would seriously attempt to do something about the gross and growing inequalities of wealth and income in the UK and other economies seduced by the neo-liberal/conservative supply side/trickle down fantasy.

So on balance I say go for growth (and get the Banks to fully repay their debts to the Country after 2007/8) in concert with other like minded Centre Left parties in Europe and North America.