The objective of the moment is survival
If there is any doubt about the size of the financial problem, look at the scale of the solution. Britain is undergoing its most radical economic change since the second world war.
Even before the chancellor delivered the pre-budget report that officially forecasts recession, the UK has slashed interest rates by 1.5 per cent to 3 per cent and nationalized three of the big five banks.
National borrowing is not simply exceeding the target but being raised to astronomical levels and a sum equivalent to Britain’s annual tax take is being pledged to support the banking system. Now Vat is being reduced in an emergency move to stimulate spending, following the similar easing of stamp duty in the housing market, and several planned tax rises are being deferred.
And a rise in the top rate of income tax is on the agenda – not a move of fiscal significance but a social statement in terms of wealth redistribution.
Imagine a Labour party that had fought any of the last three general elections on a manifesto of nationalization, massive government borrowing and taxing the rich? Or simply on a policy of such heavy state intervention?
And imagine such little opposition. Plenty of commentators – nevermind politicians from rival parties - point to the future consequences of these measures but most accept they are inevitable and none offer credible alternatives.
There is an acceptance that the problem is so great that remedies of such magnitude must be worth trying. We are accepting unprecedented moves by default with minimal debate.
The Darling-Brown duo that was initially criticised for dithering and inaction is now delivering the most radical financial change seen in most people’s lifetime. Brown is even selling the solution to other nations unable to devise such bold initiatives of their own.
History will argue whether it worked, but the scale of what is happening should not be underestimated. The economic changes taking place are as profound as those of the second world war and its aftermath, and equally brave, audacious and daring.
It is worth remembering that Churchill was thanked for his radical action by being voted out of office and that the post-war nationalisation dogged the UK economy for decades afterward – but those are matters for another day.
The objective of the moment is survival.
