Picture 5Many superlatives are regularly being used when considering the sheer scale of the economic challenges which an incoming government led by David Cameron is likely to face next year.

And this is no surprise, given the speed at which the economy is currently shrinking as unemployment and borrowing are rising.

But how will the scale of the task facing David Cameron compare with that taken on by Margaret Thatcher, elected as she was thirty years ago next week?

The former Chancellor, Lord Lawson, puts a rather positive spin on it for Mr Cameron in an essay he has written for the new edition of Standpoint – you can now read the full article here.

Yes, we are suffering from the worst recession since the Second World War, but
recessions pass, he writes; and he adds that despite the parlous state
of the public finances, the underlying structural deficit is not much
worse than that of three decades ago.

So whilst accepting that the Conservatives are likely to face "a singularly unattractive inheritance", he insists that "the problems of 2010, although considerable, pale into insignificance compared with those of 1979".

Lord Lawson continues:

"In every other respect, the situation in 1979 was far worse. Inflation was in double figures and rising. Everything else appeared to be in long-term decline. With the UK widely regarded as the sick man of Europe, even the normally restrained Bank of England (in its Bulletin the previous year) had warned that, 'Now condemned to very slow growth, we might later have to accept, if present trends continue, declines in real living standards.'

"But the problem was far more than simply economic. An unholy mixture of trade union power (beer and sandwiches in Downing Street) and trade union anarchy (the winter of discontent of 1978-79, with bodies unburied, rubbish on the streets and hospitals in chaos) had once again raised the question, first asked during the 1974 miners' strike, of whether a chronically strike-prone Britain had become ungovernable. The country was viewed with pity abroad and mired in an all-pervasive defeatism at home."

But aren't the challenges facing the country now "more than simply economic" as well?

On the one hand there is the "Broken Society" which David Cameron has expressed his desire to fix, which raises a whole range of issues such as the failure of children to be literate when they leave school, family breakdown and the problems of drug and alcohol dependency and associated crime across the country.

And then there is the challenge of dealing with the threat of terrorism on a scale far scarier than that posed by Irish Republicans during the Troubles.

Add in the pensions time-bomb created by an ageing population and the likely battle to reclaim powers from the European Union and I'm not so sure that David Cameron's Prime Ministerial in-tray won't be just as daunting as Margaret Thatcher's.

Jonathan Isaby