It's the economy stupid

Today the Tories are launching an attack on Gordon Brown's stewardship of Britain's economy. It may be the right time to do so. In years gone by, the Conservatives have been saying that there has been too much borrowing, but with an economy ticking away nicely nobody has been interested.

Now that the forecasts are for a difficult year ahead maybe the chickens will come home to roost. I really hope that the economy does not suffer a serious downturn, as it will not be a pleasant experience. In fact, I find it puzzling that Gordon Brown and Alistair Darling keep mentioning the difficult times ahead. I always thought that talking about downturns (and the dreaded R word) made it more likely that it would occur.

George Osborne is making the point that when the economy is doing well, it's the Government's duty to repay debt, reduce borrowing and try to save some money for any bad times. It's what sensible people do with their household finances so they don't get caught out when the unexpected happens, such as the trip to the other side of the world to visit a dying relative. Unfortunately, even though we've had uninterrupted growth for the last 15 years the Government has been borrowing ever larger sums to meet its inflated needs. There have been
odd windfalls such as on the utilities and the sale of mobile 3G licenses to pay back some debt but not a concerted effort to tackle the underlying bad borrowing figures.

Now, with a possible squeeze on the public finances the cupboard is bare. We should not borrow even more, but we may have to. I half expect GB and AD to turn up on an Ocean Finance type add on channel 5, GB turning to AD saying "How much was it we want to borrow again Darling? 250 Billion. That's right". The country's finances are in a very sorry state and we don't really have a rainy day fund to bail us out. It is for this reason that he is resisting calls for public pay increases over 2% - he simply does not have the money, it has nothing to do with inflation!

Gordon Brown knows all this, so does George Osborne. The Prime Minister's strategy seems to be to highlight the foreseeable problems now (even if it makes the downturn more likely), just after the problems in the American sub-prime market so that he can link the two and say that "it's not my fault, guv". Mr Osborne is trying to head this strategy off at the pass, highlighting
the PM's failure to plan ahead for the inevitable downturn and that he is complicit in the bad state of the public finances.

It now depends on the public, which message will resonate more?

Squiffy.