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The giant gamble - Independent Online Edition > UK Politics

This is scary stuff. Gordon Brown traded on his reputation for prudence, whatever the substance behind it. His successor may, thanks to his mellifluous Edinburgh burr, present an even more polished image of care and caution. But the assumptions on which the whole superstructure of this Government's finances rest are really quite shaky.

In truth Alistair Darling's figures only add up if the global economic cycle is dead. If that proves the case, sure, we scramble by. But all past experience suggests that is unlikely in the extreme.

It is not, for example, what Alan Greenspan the former head of the Federal Reserve thinks. It is not, actually, what the Prime Minister thinks. Indeed that whole smart idea of Mr Brown all those years ago was to have a public finance regime that balanced current spending and taxation over the economic cycle. So the Government explicitly accepts that there is just such a thing.

But now there is no provision for it. We don't know the shape or timing of the cycle. What we do know is that there is no store of resources built up during the fat years, ready for possible leaner years ahead.

by Fran on Tue Oct 9th, 2007 at 11:45:41 PM EST
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