This will have been a difficult election for some of you to make a decision
about which way to vote. In truth the parties agreed on many topics, and on the
really big issue of what to do with the budget deficit, they differed mainly on
All parties know the deficit has to be reduced, the question was only one of
when and whether the balance of the deficit should come from cuts in public
spending or from tax rises. Undoubtedly, we will see some of both for the simple
reason that, as the parties went into polling day, none of the big three had
explained the full extent of their plans for dealing with the deficit. This
could be because their plans were incomplete, their arithmetic was so bad they
did not realise how much there was still to explain or they were too afraid to
reveal their plans.
Cynically, I have to go for the last option. There is, as other commentators
have observed, a strange agreement between Labour, Conservatives and the Liberal
Democrats that they should not attack each other on why they had not explained
the full extent of their intentions for cuts and tax.
Would any finance director get away with such an approach in a UK boardroom?
I think not.
Any FD who said “I know we need to make savings, and we will make savings,
but I’m not telling you where the savings will be” would be packed off back to
his finance department to start planning all over again.
If we do want real change in our politics it is no longer acceptable to
simply assume the electorate will take assertions and promises at face value
without seeing some of the detail. It’s simply not credible that the parties
could not have done that. The electorate is increasingly sophisticated and to
simply not come clean on these issues is to treat voters with no small amount of
arrogance. In short it denies voters the serious debate they were entitled to.
No one will feel this more than the finance professionals who read this
publication. And they, more than anyone, will know that we cannot expect the
next administration to cope with the deficit without some as yet unarticulated
tax rises. We detail some of the options opposite on page 3.
Given the failure of the parties to scrutinise each other on these issues,
it’s not too big a stretch to speculate that it will be finance professionals at
the sharp end of policy decisions who will be left to reveal the true
implications of the coming changes. As practitioners and business advisers the
profession will feel the effects first.
The election was only ever the first stage in coming to terms with the
economic challenges that we now face. The real work is still to come.
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