What happens next? It's time to decide

Inevitably, the first election to follow the financial crisis will be fought on economic policy. Steve Richards sets the scene for an epic battle of ideas – and clash of ideologies
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Indy Politics

At last an election is called. After the election that did not happen in 2007 and three attempted coups against Gordon Brown, voters get their chance to decide what happens next.

In the immediate aftermath of a severe recession, what happens next is an issue of overwhelming importance. Some elections matter more than others and this is the most significant for decades partly because the parties present a clearer and more tangible choice compared with recent campaigns. It is a myth that the three main parties are all huddled together on the centre ground espousing the same ideas. The gap is wide.

Some weary onlookers suggest all the noise and the mountain of words that will fill the coming weeks are meaningless because whoever wins will have to apply precisely the same draconian policies. They argue that the scale of the Government's debt demands one big apolitical heave.

On one level they are correct. The next government will have to cut public spending with a ruthlessness that would have made the Thatcherites in the 1980s twitch nervously. It will have to put up taxes too. For the victor there will be no escape from the daunting climb. But the unavoidable challenge should not obscure conflicting philosophies that clash in this campaign.

The divide is over the role of government, whether it is part of the solution or the main problem. More openly than in the last three elections Labour will put the case for active government and propose a more re-distributive approach to taxation. Oddly liberated linguistically by the economic crisis, Brown will argue that its hyper-activity during the recession helped to bring about the current precarious recovery and stopped the crisis from being much worse. Looking ahead he will develop the theme, claiming against stereotype, that he is an optimist about the future but only if the government invests adequately, especially in education and training.

In contrast, from the beginning of his leadership and before the economic crisis David Cameron was a cheerleader for a smaller state. In his victory speech after the leadership contest he delivered his best- known soundbite, that there is such a thing as society, but it is not the same as the state. Almost uniquely among mainstream leaders in the Western world, Cameron and his shadow chancellor, George Osborne, called for spending cuts at the height of the recession. They promise an emergency budget if they win the election in which they would start their ascent towards a much smaller deficit.

One of the divides in the election will be over when to cut. Both Labour and the Liberal Democrats oppose cutting until the recovery is more firmly grounded.

Quite a lot of the noise will be over small policies. Probably the Tories would not wield the axe too indiscriminately in their emergency budget. Labour's proposals for high earners are not especially draconian. The Conservatives' plans to scrap inheritance tax will not cost a great deal of money. But the symbols are vivid. Labour is unapologetic about its taxes on houses worth a million and increases in income tax. The Tories argue they are tax cutters "by instinct" and promise to start making reductions during the parliament. The change in Labour's mood music is especially significant. In the last three elections its leadership argued little more than it would be more competent than the Conservatives. Now its arguments are more recognisably based on progressive values, fuelled by the expedient desire to expose the Cameroons as a bunch of disconnected old Etonians.

The Conservatives too make their case on the basis of an idea, their hostility towards what they regard as a stifling state. Sometimes this leads them in awkward directions, opposing a fiscal stimulus and wholly supportive of the light regulatory touch that led to destructive chaos on the financial markets. It can also lead them tentatively to explore more interesting routes, such as their proposals for a radical redistribution of power.

Polls suggest that most voters want the Liberal Democrats' Vince Cable to be the next Chancellor. He is the third party's most obvious asset and will appear often with Nick Clegg at public events. They have opted for greater candour over public spending cuts and redistributive tax cuts that are more daring than those being put forward by Labour. But they will be lucky if they get more than a walk on part in the clash between the two bigger parties over the future direction of economic policy. This might not be fair, but only Brown or Cameron will be the next Prime Minister at a point when those "tough choices" on the economy will be made. They will dominate the debate.

Where the Liberal Democrats might get more of a hearing is in relation to the other big theme in the election. This is a campaign that takes place when disillusionment with politics is intense. In the build up to the campaign strategists from all the parties noted above all hostility among voters to mainstream politics. The hunger for a ''new'' politics is a potentially fruitful context for a party that advocates sweeping reform. It is also one in which smaller parties breed, in some cases dangerously. UKIP, the BNP and the Greens will play their part in a campaign in which the main political parties are viewed with increasing disdain and anger.

The MPs expenses' saga is as important a backdrop to the election as the economic crisis. The previous parliament carried out its work with a guilty, self-conscious lifelessness once the scandal erupted last year. It was in urgent need of renewal. The election will almost inevitably bring about changes to the way politics is conducted. For certain the next parliament will bulge with new MPs.

Before then voters must decide on the type of country they want Britain to become at a time of epoch making change. The decision extends beyond economic policy. David Cameron would lead the most Euro-sceptic government since Britain joined the European Union. Gordon Brown has been more engaged with the EU as a Prime Minister than he was as a moody indifferent Chancellor. Nick Clegg is a leader in the European mould, much harder to place on the political spectrum than his more openly social democratic predecessors. Europe has been a sleeping issue in British politics but it has a capacity to wreak havoc and will awake at some point soon. The future of public services too will be a big issue. Do we want to build on the improvements of recent years, including the increased investment? What form should the reforms to public services take? This is a more fruitful question than the absurd, simplistic Blairite divide of 'reform versus anti-reform'. In the end it is for we the voters to decide.

Party leaders hail every election as historic. Usually they mean that the campaigns are historic for them as individuals and not for the rest of us. Few campaigns merit such a label. Even the 1997 election, which propelled Labour into power with a massive landslide, was marked more by continuity than a dramatic break with the past.

In this case leaders can make the claim with confidence. The televised debates with the three party leaders guarantee that the campaign will stand out from others that have gone before. They are a first in Britain and will shape the entire election. Party strategists estimate that leaders' performances on these television spectaculars can change ratings in opinion polls by up to three per cent either way, a significant figure in a relatively close race.

The performance of the leaders has mattered in campaigns overwhelmingly for a long time. Now they assume a new significance. On May 6th we will vote for local candidates representing parties. Until then the election will be about three leaders. For Gordon Brown, David Cameron and Nick Clegg this is the ultimate test. They are the story. None of them have led their party before in an election campaign, the first time since 1979 that three leaders make their debuts in the same contest.

But while the form of this campaign ensures a place in the history books, the context and substance are more important than usual too. Indeed there is a danger that the excitement about the novelty of the debates obscures the significance of the divide at a time of economic and political crisis. As one Cabinet minister put it to me as he contemplated the weeks ahead, there has never been simultaneously a parliamentary scandal and an economic crisis in the build up to an election. He predicted revolutionary consequences although he was not sure what form they would take. "Things cannot go on as if nothing has happened after the MPs expenses' scandal and a deep recession. There will be big change".

That word 'change' will be repeated more persistently than any other during the campaign, as if leaders are in possession of guns in which the single transforming word is their only bullet. But the changes on offer are relatively imprecise. Political leaders are partly asking voters to join them for a leap in the dark. That is quite a request to make when mistrust is so high. Perhaps uncertain times will lead to an indecisive result, the first since February 1974. But there is a big choice, even if we choose not to make it.

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