Mark Bathgate

Bring on the serious economic debate

Bring on the serious economic debate
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Why does Britain fall for financial spin so often? The question goes well beyond the great confidence trick of Gordon Brown's ten years in the Treasury. I'm just back from three weeks in Australia. What’s always struck me in the years I’ve gone there is how different the newspapers/news shows/political debates are. They are well informed about macro-economics, and there is much less of the spin/personality culture of the mainstream media in the UK.

Canada is exactly the same. Last week, the Canadian budget was published – a very clear and credible path to getting budget back to balance within three years. One of their officials explained to me that the government felt that there was simply no way the Canadian electorate would vote back in a government that had run up lots of debt.

How did two countries, so socially similar to the UK and with the same monarch, end up with such different political cultures?

The answer lies in late 80s/early 90s – both  Canada and Australia got into big fiscal trouble, and the penny dropped with the electorate at large that government financial problems spell lower living standards for all. The spectacular election in  Canada in 1993 was the most clear example of the electorate imposing order. Since then, politics has become a much more informed electoral debate about how the government makes the numbers add up – allowing the more serious (that is to say, more Redwood, Darling or Cable style politicians) to thrive.

I think the UK is now in the process of making that transition. Why? Because we're all starting to realise the price of Brown and the bankers’ hubris – having been told for ten years by a fawning media that, somehow, ever greater debt was simply genius at work and there was nothing to ever worry about.

The public will mistrust the MSM as well as politicians, and both will have to respond. Those MPs who do get this will be those who are likely to emerge in leadership positions over next few years. Financial literacy has not been at a premium in Britain since Black Wednesday, and you can argue that we have all paid the price for that. The terrible disaster to hit Iceland should serve as a reminder that common sense and simple questions have a crucial role to play in politics and economic management.

A sign of the transition in the political culture that I speak about is in this superb piece by Janice Turner yesterday in The Times. Expect much more of this over the coming years.