The Tories are closing the gap with Labour, UKIP may have peaked and is beginning to attract negative publicity and the economy is showing positive signs of modest recovery. There is now a real prospect that in May 2015 things will be looking a lot better. The Tories will claim to be the architects of recovery and they will point out that Labour was the architect of the great financial crisis. Why give Labour another chance to wreck all the good that has been done? It is a good line. Just a few months ago Cameron’s party looked doomed. Now it is rapidly becoming the safer bet.
This would be worthy if the slow recovery were based upon sound economics. Unfortunately it is not. It is based, once again, on stoking the housing market without adding sufficiently to the supply of new low cost housing to rent. This can only lead to an increase in house prices, which will increase borrowing and take the country in sight of another bubble. The Treasury’s latest loan guarantee scheme has been roundly condemned by every economist without a direct finger in the house price pie and has been derided as mad by the CBI.
Sadly this is the historic default economic policy of the Tory party in government post war. Stoke the economy before the coming general election then rein back. This happened in 1964, 1973, 1987 and 1992. Labour took over in 1997 and managed to engineer the biggest bust in history in 2008. Now the Tories lead the coalition and dominate a financial policy which even their coalition partners describe as risky.
Not only is this a morally reprehensible way to engineer a false new dawn; it has been proved over and over not to work. The Tory leadership knows that well enough, or if it doesn’t, it is even worse than its enemies proclaim. The obsession with home ownership as the only worthwhile measure of wealth has killed saving and inflamed debt. It has created an imbalanced economy slipping down the league, hobbled by a dangerously shrunken industrial base, unable to create new wealth, for which it substitutes excess debt.
The voters are entitled to regard their politicians with little more than derision. It does not matter which party you look to. The Tories are guilty of promoting a flawed policy to stoke a false recovery. Labour is guilty for having nothing better to offer and the Lib Dems are guilty for working out that this won’t work, but saving their skins for the moment by staying in the coalition. The British people have been stoic and realistic as well as disciplined in the longest recession in modern history. They have, unlike other countries in crisis, made their nation easy to govern. They deserve better from those to whom they have entrusted the task.