Andrew Grice: Nobody will use the 'D' word

Whatever happened to the £167bn deficit in the public finances? Has it been magically wished away? The issue that was supposedly going to dominate the election has been written out of the script as our politicians replace hard choices with soft options.

Yesterday, the party leaders focused on cleaning up the political system. Cheaper and more cheerful than nasty spending cuts. There's almost an unofficial truce about the real cuts which everyone knows will be needed. David Cameron assures us he can reverse next year's 1 per cent rise in national insurance contributions (NICs) by cutting government waste, plucking £6bn out of thin air. Gordon Brown also retreats to his comfort zone, warning that the Tories would have to cut our old friend "schools'n'hospitals", which Labour would of course protect. Some things never change even though the state of the nation's finances is very different to 2001 and 2005.

The Liberal Democrats deserve more credit. They can afford to talk about cutting big-ticket items like Trident and have a more immediate £15bn hitlist. Vince Cable says he doesn't need his free bus pass until he's 65 and others over 60 should wait too.

It's early days and perhaps the campaign will get serious. But the omens are not good. No wonder there are jitters in the City of London.

The politicians know there is little low-hanging fruit left but want to put off the evil day until after 6 May. Ministers have shelved the Treasury's government-wide spending review until the autumn, citing the uncertain economic outlook. The Tories seem to have dropped tough talk about making a start on cuts in the 2010-11 financial year. Much cosier to talk about efficiency savings, even though they refuse to give us a single example.

For now, the Tories are getting away with it, with the help of businessmen who (surprise, surprise) don't want an extra 1 per cent on their NICs bill – even though they want the deficit tackled.

It seems the party strategists have decided that voters don't warm to austerity or gloom. Sunlit uplands, a better future, optimism are required. So vague promises to "halve the deficit over four years" (Labour) or "go further and faster than Labour" (the Tories) are as good as it gets. I suppose it is asking too much in the heat of battle for Labour to talk about higher income tax for the rich or the Tories to admit they might need to raise VAT. But the election shouldn't be a cuts-free zone and a more honest discussion of some of the options would be welcome.