In times of prosperity when the majority experience an improvement in their circumstances, economic matters do not warrant significant attention. All but a small minority have jobs, people have more freedom to spend as they would like and the wealth of many increases due to the general rise in house prices. In times of recession, economic matters become more of a concern, as jobs, spending and wealth are all at risk. As Britain tentatively emerges from recession two distinct economic perspectives compete about what role the government should assume to stimulate sustainable growth.

In modern democracies, those on the right state markets should be allowed to operate freely, and by doing so, will bring about prosperity for all. The government’s presence in the economy should be limited to providing sufficient regulation and maintaining law and order. By providing health, education and other goods and services, governments distort the ability of markets to function and so risk their ability to contribute to growth. Those on the left state governments can have a significant role to play in the economy because markets, if left unchecked, can operate in the interests of the few and not the many. And in times of recession, governments can borrow and spend to ensure people have jobs and can consume as they normally would.

It is this debate we are witnessing in Britain. The Conservatives initially opposed measures such as taking full or part ownership of a number of banks when the financial crisis broke in the autumn of 2008. They also opposed the billions injected into the economy as part of the measure called quantitative easing. The economic arguments against such actions insist they may have a beneficial effect initially, but ultimately, they will cause inflation and lead to high interest rates, which will hurt manufacturing and cause house prices to fall. Labour has argued that it had to take such action because if it had not, there was a real risk the financial sector would have collapsed and damaged other sectors of the economy – people could have lost their savings and the level of unemployment would be far higher than it presently is.

Now that we are out of recession, the question of paying back the money that was borrowed to support the economy arises. All the main parties are committed to reducing the budget deficit; the differences are in when the borrowed money is paid back. The Conservatives would prefer to cut the deficit immediately so that long term stability and prosperity can be achieved. Labour argues that reducing the deficit immediately risks returning to recession, as cuts in public spending will result in job losses and reduce the spending power of consumers.