Tuesday, 13 January 2009

What's The Point Of Voting Conservative ?

It's a question I've often pondered but having heard David Cameron's weak interview with Andrew Marr on Sunday and George Osborne's insipid performance on Sky News this morning, the only conclusion I can come to is that these two men are privately terrified, not of defeat but of victory at the next election.

The thrust of Caneron's argument on Sunday was that a change of Government would lead to a change in economic confidence and that once in Government, the Conservatives would put everything right.

Reassuring nonsense of the first order.

The current economic data is bordering on the frightening. Despite some signs of activity around Christmas and New Year, fuelled largely by enormous discounting, the overall Christmas period for retailers was profoundly weak. The banking sector remains largely dormant and we are already seeing the retail dominoes starting to fall. As I argued earlier, the desperate attempts of Governments to try and re-start economic activity and bank lending, apart from not being guaranteed to succeed, are also likely to stoke up inflation in the medium and longer term.

David Cameron and George Osborne face a desperate economic legacy should they come into office in May 2010, True, the worst of the GDP contraction may be over but the signs of recovery will be few and the rate of recovery faltering at best. The threat of renewed inflation and rising interest rates will hover over the weakened property market like a shadow and the vast levels of public debt (perhaps up to 10% of GDP) will severely limit the Government's room for manoeuvre. The hopes and dreams of generous tax cuts for the Tory supporters have evaporated.

Indeed, the Budgets of 2011 and onward may yet see the worst of all worlds - savage cuts in public spending and tax rises aimed at trying to pare down the debt mountain. The political impact of the remedial measures combined with the duration and severity of the recession will not leave much room for a political honeymoon.

I suspect that by 2012-13, the Conservative Government will be bogged down in the economic mire, losing support and perhaps wishing it hadn't won the 2010 election after all.

I'm being unfair - I'm sure Cameron and Osborne genuinely believe they can act in the best interests of the country and I've no problem with that. I cannot help but think however that the global nature of the economic recession and the interlinkage of world economies mean not only that there are more surprises and shocks to come but that it will require concerted international action to get through this.

In the end, therefore, whether it's Brown/Darling, Cameron/Osborne or even Clegg/Cable at the international table doesn't make a lot of difference. Many people are, I think, going to vote Conservative simply because they are angry and fed up with Labour and that's understandable but don't believe it will make much difference.

In the end, if you choose to vote either Conservative or Labour, the net effect is going to be same.

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