AN hour after Britain's chancellor of the exchequer Alistair Darling announced his plans to lift the economy out of recession to the House of Commons on Monday afternoon, a similar statement of intent was made by President-elect Barack Obama in Washington. He said that a major fiscal stimulus would be his first priority in 2009. It is likely that other announcements in the same vein will be heard elsewhere.
Although there may criticisms to be made of the individual measures in Mr Darling's package no serious objection has been made to the principle behind it - that money has to be injected into the economy if it is ever to recover in the short-to-medium term. True there is criticism of the debt burden that the policy will probably cause - but, again, there is an absence of viable alternative proposals. In a good speech in the House on Monday, the shadow chancellor, George Osborne, said that any stimulus must be paid for by cuts in public expenditure rather than by borrowing; but the Conservatives must know that such economies - if they can be made without affecting valued public services - are a long term proposition. Some of Mr Darling's proposals, especially in the area of taxation, have been interpreted as signalling the death of New Labour but it is difficult to see why a reasonable new 45 per cent rate of income tax for those earning more than 150'000 pounds a year should be seen in that way.