Alastair Stewart: Economics goes in cycles... it will get better but in its own sweet time

I studied economics at Bristol University - and politics: the twin forces in much of what we do and the quality of life we enjoy.

I began work in the late 1970s when Labour were as left as left could be, under Michael Foot, and the Conservatives had rejected the Heathite mantras of intervention and big state economics in favour of the tough, free-market approach of Margaret Thatcher.

On the economy there were big clashes between the Keynesians who were all for intervention - Government money could solve everything - and the Monetarists who saw inflation as the key evil that could be controlled by controlling the money supply.

It made for a decade of brutal change and was followed by the return of intervention under Blair and, to a lesser extent, Cameron. The challenges we face this year are curiously reminiscent of those times: inflation on the up again, energy crises wherever you look and the public finances in a mess. But the political class seems to me to be in a state of confusion.

Johnson’s a pragmatist, wrestling with the third year of an albeit declining pandemic. His own side say he’s too keen to throw everything the Treasury has art every problem that presents itself.

Starmer is seeking to cast himself more in the light of Blair - all things to all men and women - and shed even the memories of Corbyn who was much more like Foot.

This year, we will see their true colours. As we wrestle with rising prices, labour shortness, higher interest rates and a global energy crisis what will they do?

Will Johnson rediscover traditional Tory economics and get tough at the first opportunity or will he cling to intervention and bail-out ad the election approaches - and if he’s still there? Will the Tory’s think its time for another leader - someone like Liz Truss - who is more in the Thatcher camp than Johnson?

For Labour, it seems clearer: while Starmer is no Corbyn, his Shadow Chancellor, Rachel Reeves, is a bailout, windful tax levying, benefit booster when it comes to the cost of living.

History suggests the traditional Tory prescription lasts longer but at a price. Labour’s prescription appeals to the voters but carries a long term cost to us all, as well. The choice will be yours and perhaps before too long.

Finally, two thoughts: economics goes in cycles - dark before dawn, recession before recovery - what goes around, comes around. It will get better but in its own sweet time.

Secondly, confidence and optimism are crucial: if you think things can only get worse they quite probably will. So patience, self-belief and a Government you can trust to do the right thing matter.

I am a lot more confident of the first than I am the other two… But we’ll see. At least the cards are now being shown and played….