Will the cuts be over-shadowed by foreign affairs?
It is very widely assumed that the cuts will be the issue that makes the political weather for the lifetime of this Parliament. But could this be overlooking one of the other major effects of the Crash ? The FT is reporting tonight that an intensification of the current “currency war ” looks likely as a meeting of the IMF ended with a sharp exchange of words between the US and China rather than any steps towards agreement on how to defuse the dispute over the value of the Renminbi.
As I’ve pointed out before, this sort of post-crisis tension, should worry us all. It should also leave us wondering whether the biggest political debate of coming months and years might not be austerity (or at least, not austerity alone) but how the UK should react to a round of competitive devaluations and, more widely, how it should respond to the rise of China. It might be wise for Labour to start considering its response now.