As General Franco lay dying...

As General Franco lay dying it is said that he asked what the noise outside was all about. 'The people have come to say goodbye Sir,' was the reply. To which the General retorted, 'Why? Are they going somewhere?' Back at Number 10 I believe that Gordon Brown is facing the prospect of his own long overdue political exit with a similar, though entirely less comic, detachment from reality. 

This is most pressingly seen in his attitude to the current economic crises. Let us set aside the big question of how much responsibility he bears for our current predicament. The arguments about 'events beyond my control' (as the Duke of Wellington once memorably put it) or a case of missing the opportunity to 'fix the roof when the sun was shining' (as David Cameron prefers). For the sake of the  next few minutes let's just take a deep breath and put the past behind us. Let's focus on where are we now and how we should move on. 

Where we are now is becoming clearer by the day. We are drowning under Labour's debt. Under current plans we are set to double our indebtedness to a staggering £1.5 trillion within the next four years with the interest alone on this amount being more than the education and defence budgets combined. Our budget deficit next year is due to reach 14% of GDP which is twice the level it was when Dennis Healey went cap in hand to the IMF for a bailout. And Standard and Poors, the leading international credit rating agency, has recently indicated that it might, in future, have to downgrade our coveted AAA credit status (as they have recently for Ireland) for the first time in our history. Something which would increase borrowing costs and risk a run on sterling with its attendant injection of heavy inflationary pressures into the economy. Unfortunately the PM's response to all this has been to resort to pressing a debate driven by little more than party political posturing in advance of the coming election. He has reached for a well worn stick to waive at the Conservatives. The relentless message that Labour will support public services where the Conservatives will cut them. Trust me he says - only I will look after you - the others will destroy everything you hold most dear. 

At the 2001 and 2005 elections, against a backdrop of milder economic times (inherited from the last Conservative Government under John Major) the message, whilst totally unfair, struck home. 

The problem for Gordon now is that the world has moved on and this presents him with two critical and connected challenges. Firstly, in order to run his argument he has to convince us that cuts are going to be the sole preserve of the Conservatives - that he will in fact continue to increase public expenditure (which he calls 'investment') out into the clear blue yonder in a virtuous circle of investment and return (in the form of improved growth or slower contraction). The problem is, of course, that with the economic downturn and the tax take collapsing, it is borrowing that is having to fuel the engine.

Secondly, his latest budget projections simply don't support his premise. He says he intends to increase public expenditure year on year but a closer examination of the figures shows this position to be untrue. Once you take into account inflation and the cost of servicing the debt, going forward, there is no continuous increase in the level of real public expenditure. There is in fact, over the period of his plan, a 7% reduction (or should I say cut) contained within the Government's own projections. Ring fence and protect health expenditure (which the Conservatives have pledged to do) and you face a reduction in real terms across other departments of around 10%. This destroys his argument. He knows that whoever wins the next General Election they will have to make cuts - he just wants to spin the figures to try to convince us otherwise.

In a parliamentary age when truth now seems to matter more than ever I believe that it is vital that all parties are honest about the state of the British economy and straight with the electorate about what this will mean in terms of fiscal responsibility and the huge challenges that this will bring. I am heartened that David Cameron has firmly grasped this nettle.

And what of the late General Franco? Well, my thought is that perhaps his deathbed inquiry has more about it than mere historical anecdote. Perhaps it is a critical question that Mr Brown should ponder too. Where are we all going? I fear that the answer - under this government - is nowhere good.

Other columns by Mel Stride