Playing for the highest stakes

Whenever we journalists describe something as a "political gamble," or even a "huge political gamble," I sometimes think we need to go and take a lesson in the avoidance of cliché.

The fact is, all political decisions require an assessment of the balance of risk, and in that sense, all political decisions are gambles to some extent or another.

Delaying the general election until moreorless the last possible moment was a gamble for the then Prime Minister Gordon Brown, for instance.

He was gambling on the fact that the economy would pick up sufficiently before 6 May to show the electorate that his prescriptions were working. It wasn't that far away from coming off.

The gamble unveiled by Chancellor George Osborne in his first Budget on Tuesday, however, was of an entirely different order.

This wasn't just a gamble with his own future, or that of the Con-Lib coalition. It was a gamble with the future of the whole country and the jobs and livelihoods of millions of its people.

The debate over the Budget has thus far focused on two issues. First, whether it could reasonably be called "fair" and "progressive," and secondly, whether or not the £40bn extra spending cuts and tax rises were avoidable.

All I would say on the first point is that it depends how you define fairness. Some will say that the rise in VAT to 20pc is fair because it will affect everyone in the same way, while others will say it's unfair because it will disproportionately hit the poor.

The more illuminating debate surrounds the second point – whether this Budget was indeed unavoidable, or whether these cuts are at least in part ideologically motivated.

As I noted last week, the government's attempts to lay the blame for the cuts at Labour's door has aroused the opposition from its post-election slumber and forced it to stand by its own, more limited deficit reduction plan.

The really difficult thing is that no-one knows who is right about this. There is no clearer consensus among the economists about how fast the deficit should be cut than there is among the politicians.

In short, it's a case of suck it and see. We will only find out the answer once we have been there and done it.

Whatever the outcome, it is no exaggeration to say that the politics of the next decade and beyond will be shaped by it.

If Mr Osborne's strategy works, and he succeeds in bringing down the deficit without causing another recession, then David Cameron will almost certainly win a second term and probably, this time, with an outright majority.

But if it he is wrong, the current political status quo will be transformed

The coalition's political honeymoon will come to a swift end, and Mr Brown will start to look not so much like a failed leader as a lost leader, or a prophet without honour in his own country to use a Biblical analogy.

A vindicated Labour Party would then be on course for a victory at the next election every bit as crushing as the one it achieved in 1997, four years after the last Tory government's claim to economic competence was swept away by Black Wednesday

The Conservatives could be out of power for another generation, while their Liberal Democrat collaborators may well be wiped off the political map entirely.

While some on the left might welcome this apocalyptic scenario on the grounds that it would be good for the fortunes of the Labour Party, the cost in terms of human misery would surely be too great.

For that reason, we'd better all hope that Mr Osborne's great gamble does indeed pay off.