Tough times

This year there has been much to reflect upon. The economy teeters on the edge of a further recession and the Euro crisis threatens to visit upon us a dose of economic havoc the like of which the world has not seen since the 1930s.

The UK is in a better position than most with low interest rates underpinned by market confidence in our plans for tackling the deficit and yet we are still in a precarious position.

Our deficit reduction plan was recalibrated in the Chancellor's Autumn Statement when he announced that recovery would take longer and be more painful than originally thought. This, you might think, would leave people leaning towards Labour's assertion that we are cutting too far and too fast, but not so, according to the polls and focus groups.

Indeed, the argument about tackling the deficit as vigorously as possible has, if anything, been strengthened by the fact that the mountain is larger than originally imagined. The debate now is likely to focus more on who is bearing the cost of the economic clear-up (richer or poorer, North or South, public or private, male or female, Scots or English etc) than whether the medicine is being thrust upon the gasping patient with indecent haste.

This discussion about fairly distributing the load will be one of the most critical aspects of public policy next year and one in which all of us should fully and genuinely engage.

Discussions about the relative fairness of cuts and tax increases will of course pale into insignificance if the eurozone crashes to Earth. I hope I am wrong but my view is that this will happen in some form and in the near term. An event that will unfortunately and abruptly redefine our understanding of 'tough times'.