Nasty fiscal medicine needed to save Britain from disaster
If anyone in the Conservative Party still has a number for Norman Lamont this might be the moment to give him a call.
The conversation might help George Osborne prepare himself for what is likely to come.
The last time the Tories won power the economy was also pulling itself out of recession and running a huge public sector deficit. In the 1993 budget the then Chancellor, advised by one David Cameron, announced the introduction of VAT on domestic fuel at eight per cent.
The idea was to reduce borrowing, at a then record £51 billion. The result was howls of public outrage about a tax on the poor, a spectacular by-election defeat at Newbury and Mr Lamont's sacking.
No Chancellor since has had to make the same kind of grim decisions about taxes. Until now. The financial markets will bank-roll the British economy while they believe a post-election Chancellor has the guts to "do a Lamont". If they start to sniff fear, or a hung Parliament leaves a vacuum, the potential consequences are grim.
A further run on the pound leading to a spike in inflation as import costs soar, even a downgrading of Britain's precious credit rating are all possibilities.
Has the Treasury still got the stomach for ladling nasty fiscal medicine down the electorate's throat? We will find out in May.
