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Playing the numbers game

Gordon Brown
Chancellor of the Exchequer Gordon Brown has pledged 70 billion in spending  

LONDON, England (CNN) -- When do the numbers not make sense? When there is a UK general election campaign.

Now that Prime Minister Tony Blair has called the election for June 7, it's open season on Britain's economic figures. One party's strong economy is another party's weakling. Good growth to one is a recession in the making to another.

Prepare for numbers to be twisted and distorted almost beyond recognition. First, though, some facts that few can dispute:

Britain's growth for 2001 will be around 2.3 percent, the current unemployment rate is 5.2 percent, inflation is 2.3 percent and interest rates are on the way down. There the agreement ends.

Labour has to convince the electorate that a process is under way, that its promises to spend more on the crumbling infrastructure, health, transport and education will take time to come to fruition.

Although Chancellor Gordon Brown has pledged to spend more than 70 billion, Labour says a second term is essential if the fruit of its investment is to be plucked.

In making this argument, Blair and his team acknowledge that many of the pledges from the first election have not been fulfilled. A second term is needed to right the wrongs of years of Tory rule, Labour argues.

One policy not in doubt is the independence of the Bank of England, Britain's central bank.

Within days of Labour's victory in 1997, Sir Edward George and his bank were given the remit to run UK monetary policy. And although the chancellor sets the inflation target for the bank to follow (currently around 2.5 percent) it's up to the bank where interest rates ultimately settle.

On the tax front, the government's recent budget set the tone, with targeted tax cuts to promote the family being introduced. Blair is expected to give an assurance that there will be no increases in the basic or higher rates of tax in any second Labour term.

Rubbish, claim the Tories -- who themselves won't pledge to keep the tax line. They attack the government for increasing taxes through the back door, with "stealth taxes" on employment and cuts in allowances that have taken the total tax take in Britain up to 37.7 percent of GDP.

Instead of large-scale windfalls, the Conservatives believe taxes should only be cut to encourage people to work hard, save hard and try to be independent of the state, according to Tory leader William Hague.

When the electoral dust settles, the actual difference between the two main parties on taxing and spending is a matter of degree.

There isn't much room to find disagreement on the details; rather, the philosophy on the role of government in the economy is at stake. Labour, it is said, wants to intervene, while the Tories want to let business get on with business.

Britain's third party, the Liberal Democrats, believe in a middle ground, preferring to spend more on education and increase taxes where necessary to promote a better health service.

That's all fair and good -- except history shows that the British prefer more money in their own pockets to spend as they wish.

In the end, the overriding question is just how strong the UK economy actually is at the moment.

To hear the Tories tell it, Britain is on the verge of a recession that only the Conservatives can avoid.

Labour says that's simply not the case and that while the U.S. slowdown will take its toll, the right policies are in place to avoid the worst effects. Manufacturing might be in a recession, but house sales, consumer spending and personal income remain relatively robust.

Such is the noise and fury we will have to endure until June 7. The twisting of numbers and downright misuse of statistics will leave many gasping.

For an election that already seems to have gone on for months, more akin to a U.S. presidential dirge, the end of this contest can't come soon enough.

Blair names UK election date
May 8, 2001
Europe gives Blair unwanted help
May 8, 2001

HM Treasury

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4:30pm ET, 4/16

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