(1) The terms of the banks' recapitalisation programme will come to be seen as too punitive.
(2) Alistair Darling will announce some modest tax cuts - targeted on low income workers and smaller businesses. They will be too small to make much of a difference to the path of the recession but Labour will attempt to present themselves as the real friends of the low-paid and business.
(3) The Tories will say that tax cuts now (unless funded by spending restraint) are irresponsible and will make it harder for the Bank of England to cut interest rates. Conservative spokesmen will be instructed to say 'Britain must live within its means' at every possible media opportunity.
(4) The Bank of England will cut interest rates but not as quickly as necessary and Britain's recession will be among the deepest in the developed world.
(5) The Conservatives will stay in the economic policy game by announcing lots of sensible but small measures to help small businesses and families.
(6) George Osborne will establish an economic advisory council including big beasts like Ken Clarke, John Redwood and Lord Forsyth.
(7) As recession bites and people fear for their jobs and homes the Tories' opinion poll lead will grow again.
(8) A YouTube ad targeting Brown's economic bust will be as symbolic for the 2010 General Election as the Labour isn't working poster was for the 1979 election. Something like this (used against George W Bush) should do the trick:
Children Will Pay - video powered by Metacafe
(9) The Tories will win the Election but inherit dire public finances. There will be enormous debate within the Conservative Party as to whether George Osborne's first Budgets will need to deliver spending restraint and tax rises or spending restraint only. Opponents of tax rises will prevail.
(10) Burdened by debt and an unreformed public sector, Britain will underperform our major competitors for much of the next decade.
The sad thing for Osbourne is that not only will he inherit a train wreck of an economy, but tax rises will be pointless.
We are already over the point in the Laffer curve where tax revenue starts to decline, and with the increases in regulation and compliance further burdening industry we are seeing plant after plant closing.
Far East Competition is not the only issue. The Legacy of labour is that it is cheaper to produce a car in France than here, it is cheaper to produce drugs in Spain than here. The costs and regulatory compliance issues here mean that banks will move to the far East.
We need a radical policy of lower regulation, especially in the layers of duplicated EU/ Local/ National compliance on SME's We need lower taxes and simpler taxes.
We need to address the serious problemm of acedemic dilution that means that employers prefer foreign nationals to those educated in the UK.
We need to stop the whole Zanulab agenda of punishing people for working and saving, yet rewarding people for sloth.
Somehow I think I am shouting in an empty room with the Conservatives.
Posted by: Bexie | October 31, 2008 at 09:03
The government will sell on its £37 billion 12% preference shares in banks to Sovereign Funds at a 150% profit (remember interest rates are falling to an all time low) before the 2010 election, thus reducing debt by £92.5 billion.
The banks' shareholders and borrowers will be the sufferers.
Posted by: dai | October 31, 2008 at 09:07
Sounds about right.
Posted by: Norm Brainer | October 31, 2008 at 09:08
A YouTube ad targeting Brown's economic bust will be as symbolic for the 2010 General Election as the Labour isn't working poster was for the 1979 election.
...and there will be too few people around to remember the terrible irony of that campaign.
Posted by: resident leftie | October 31, 2008 at 09:26
Cutting rates will only really help homeowners but won't boost demand as too many people are in debt. The priority ought to be set on maintaining price stability to ensure that inflation isn't around to undermine the new economy when it emerges.
Posted by: Tony Makara | October 31, 2008 at 09:44
Given that Brown is going to borrow huge amounts of money anyway Cameron ought to be pointing that spending it on infastructure projects isn't really going to help.
Might I suggest a couple of soundbites for starters :-
'A high speed rail link will not help anyone pay their fuel bills in Exeter'
'Investing in green technology will not help the shop worker trying to keep their home from being reposessed'
Posted by: Mike | October 31, 2008 at 09:45
That video is brilliant. Let's make it for Britain!!!!!
Posted by: Sammy Finn | October 31, 2008 at 09:46
I really, really hope that "(6) George Osborne will establish an economic advisory council including big beasts like Ken Clarke, John Redwood and Lord Forsyth." actually takes place, because I have little faith in George Osborne being able to combat the current government without older and much wiser heads to guide him.
The economy has been one of the weakest parts of this government's strategy for several years. As far as I can see, the only consistent attack has been provided by John Redwood who has commented, on an almost daily basis, on the pitfalls that we are about to, and then finally have, fallen into. He is almost alone, amongst Tory big beasts, in being consistently accurate in his predictions. By contrast, Osborne on the economy has been weak and ineffectual. Ken Clarke, although more popular, has not been visible until very recently.
"10) Burdened by debt and an unreformed public sector, Britain will underperform our major competitors for much of the next decade." Quite frankly, there is no rational reason why we should underperform. The trick is in ridding ourselves of the unneccessary bureaucracy in central and local government first, allowing the private sector to get cracking again, unencumbered by stupid legislation.
Posted by: David Eyles | October 31, 2008 at 09:53
I thought we were sharing the proceeds of growth?
Posted by: Richard North | October 31, 2008 at 09:54
Please don't go on about 'George Osborne's first budgets'. I really don't think I can take it.
Posted by: Henry Mayhew - ukipper | October 31, 2008 at 10:06
I'm not opposed to spending on infrastructure as I see it as a long term investment. However if the government is serious about maintaining living-standards, any jobs created, must as a priority, go to those who head young families, especially those with mortgages to pay. It is vital that people with children keep their homes and don't become an extra problem for social housing which is already struggling to house everybody. A twelve-month public works contract might just be enough to ensure that a family survives this recession.
Posted by: Tony Makara | October 31, 2008 at 10:16
"As recession bites and people fear for their jobs and homes the Tories' opinion poll lead will grow again."
This is wishful thinking at its worst. People fear just those things now and the Tory lead is shrinking.
The government should be on the ropes not staging a comeback.
As your recent YouGov poll shows, the public do see this as a global problem, not a Labour creation, and seeing as both parties agree on the solutions, just why is the public going to swing back to the Tories?
Without a bold, major initiative creating real clear water, not helpful but minor tinkering, the Tory lead will continue to dwindle.
Posted by: GB£.com | October 31, 2008 at 10:24
Conservative spokesmen will be instructed to say 'Britain must live within its means' at every possible media opportunity.
It's an improvement upon 'sack Ross and Brand'.
Posted by: Mark Fulford | October 31, 2008 at 10:29
As your recent YouGov poll shows, the public do see this as a global problem, not a Labour creation...
When the other economies start sailing off, people will realise that although we were in the same sea, we weren’t in the same boat.
Posted by: Mark Fulford | October 31, 2008 at 10:40
The answer to this written question might shed some light on how we deal with excessive regulation.
BTW: Mr Redwood is a bit busy these days. His directorship in the investment company, Audley European Opportunities Master Fund Ltd and its feeder funds, to say nothing of his position as non-executive chairman of Evercore Pan-Asset Capital Management Ltd, an investment advisory company, seem to be keeping him a tad occupied. Are you sure he has time for his day job?
Kenneth Clarke is a paid member of the Advisory Board of Centaurus Capital Limited - a European hedge fund managing a billion pound portfolio and major shareholder in the Friends Provident insurance company. This is struggling to contain its losses so Mr Clarke might be a little too busy as well.
And might there not be just a teensy bit of a conflict of interest?
Posted by: Richard North | October 31, 2008 at 10:42
"(6) George Osborne will establish an economic advisory council including big beasts like Ken Clarke, John Redwood and Lord Forsyth."
Nice idea but unlikely (especially Redwood and Forsyth).
Posted by: Libertarian | October 31, 2008 at 12:06
I will put up with economic difficulties if it means the destruction of Labour as a political entity., but it would help if Osbourne got his act together. I like the idea of an advisory council with Clarke and Redwood in it - I think they balance each other out nicely - and leave Osbourne as the figurehead.
@Richard North (sharing the proceeds of growth): Brown has ensured that there is no growth and will not be until after the election.
Posted by: Hawkeye | October 31, 2008 at 12:09
Does that mean this policy has changed then?
Posted by: Richard North | October 31, 2008 at 12:27
Sounds like you all want our country to go to the dogs just so the Bullingdon Boys can take over the country.
Trouble is there won't be much to take over !!
Posted by: gezmond007 | October 31, 2008 at 15:08
Richard North @ 1042: thank for that information, but it does not really detract from my point that both Clarke and Redwood are more experienced than Osborne. Indeed, the fact that they both have a foot in the real world (albeit finance) is a better qualification for the job as shadow chancellor than the current incumbent who appears to little experience outside Westminster.
Posted by: David Eyles | October 31, 2008 at 17:11
As your recent YouGov poll shows, the public do see this as a global problem, not a Labour creation...
When the other economies start sailing off, people will realise that although we were in the same sea, we weren’t in the same boat.
You should be a speech writer. This is a nice analogy (based on a flawed interpretation of reality, of course).
Posted by: Resident Leftie | November 01, 2008 at 12:21