Does The Public Know That We Are In A Recession?

Does The Public Know That We Are In A Recession?

As with every campaign there are a large number of things that can be criticised in David Cameron’s last campaign. Undoubtedly the worst thing that the campaign could be blamed for was not laying out the scale of the coming economic difficulties.

Simply put, they’re huge. And any government is going to have to make unpopular decisions up and down the board.

There are three main unpopular decisions, two which most people reluctantly accept (although they do not have a clue how big they will be) and one which most people are unaware of at the moment. The government is going to have to quickly make people aware.

Most people expect are spending cuts. This is fairly well known. It is familiar ground for Labour which can hit out again and again at “cuts”. Many people expect that spending cuts will not affect them, or at least their living standards, but when middle class parents see their children’s music lessons cut back or the Home Counties commuter sees their train fares rise due to the cut in rail subsidies then there will be a revolt. How long this revolt lasts will up to the government. If they are honest now then it will be grudgingly accepted. If not then it will be resented until the next election.

Tax hikes are going to be harder to sell for two reasons. Firstly all parties promised (very limited) tax cuts during the election when at least they admitted to (very vague) spending cuts. There’s also the fact that the Conservatives are known for cutting taxes. This is going to hurt, particularly among the core voters. But there is the fact that, in the end, we all expect it because we know the cupboard is bare.

Where it is going to hurt is the tax cuts and contract cancellations. Tax cuts are going to be for the electorally unpopular, but fiscally sound sectors such as hedge funds and high net worth people. Voters will ask why they are being taxed through higher VAT and higher than expected National Insurance yet there will be tax cuts for the wealthy. The simple fact is that these people can leave the county, but swing voters can not is not going to endear any party to the electorate. This is going to call for a level of honesty that has not been seen at the election – but will be needed soon. Will it work? We do not have a clue.

Leave a Reply

Your email address will not be published. Required fields are marked *

*