Difficult decision dare not breath its name...

This Government is demonstrating something that it has genuinely inherited from Labour - sleight of hand, or spin as it has come to be known. They have made much of the difficult decisions they have had to make, originally sending their lib dem fags into the arena to explain until it turned out they could be risky ambassadors.

They have said rather less about the first decision that they must have taken - NOT to put up incomes taxes for those in work, however well off, but instead to extract the financial balance they needed from the young, the needy and the elderly. And to do that they could also dodge most of the flak, since most of the care came through another Tory whipping boy - local government.

True they are out on a limb with the NHS and some national policies over schools, 'free' whatever that means, and their defence policy has yet to be properly examined. And they have also launched an assault on benefits which while visually attractive will actually be entirely counter productive. But I shall come to that.

Lets first look at their decision on tax. Forget the VAT hike which was daft anyway and regressive anyway. No, if the typical housewife, as Mrs T was fond to say, was faced with a budget crisis the first thing she would want is more income. So, and it happened in the 60s and 70s be assured, mum got work and dad got more work. They raised their income. Then they started trimming their costs.

This government, faced with what they claim is a monumental crisis, underpinned by the entirely unproven myth that - just like a Tory predecessor - the Labour chancellor left a note saying: sorry there's no money left - decided instead to cut costs rather than increase income. Presumably no one pointed out early enough that one organisation's budget cut is a lot of other peoples' unemployment. And one person's unemployment is a loss of income tax and spending power, not to mention a new family in need of benefits... It cuts the virtuous circle clean across.

But it must have been said because lo, Davey came down from his ivory mountain to proclaim the Big Society. Clearly he is no Thatcherite. The lady was sure there was no such thing. He had better hope she was wrong.

But there was another way and it might have kept this dismal bunch off the rocks their cavalier cuts are creating, stagflation. So lets look at this the other way. Increasing income tax across the range provides very large sums of new money to the Treasury - a penny on income tax is currently worth about £4.5 billion a year. And handled with skill it can impact more on the better off - especially the very rich - and so is progressive.

At the same time some trimming of many costs would be sensible at any time so go for some of that but put all Government and its agents under control to improve efficiency. Trim rather than slash the local council tax support grant - and do it fairly of course!

No spending will fall at first, due to the reduced spending power but the majority of people will work around that - some may even take extra work to help pay. Soon enough the situation steadies. By which time a judicious reduction in profits tax will feed through into growth.

Inflation would have risen anyway just now due to swingeing rises in oil, commodities generally and especially in food prices world-wide. But with higher tax takes and a growing economy most of the problems will assume reasonable proportions. Better still the banks we own will grow faster t9o the point where we can (please get this right, people!) sell at a profit what we bought dearly in a crisis.

Where we are now is not a place we want to be.

• Wholesale cuts are crippling family support when it is most needed.
• Wholesale re-organisation of the NHS will cost us dearly down the line.
• Too much change in education could do the same.
• Massive cuts in local government budgets means what they deliver - care of people by people - drains away with massive unemployment.
• High unemployment means fewer tax payers.
• More unemployed means more demands for support, care, benefits.
• Failure to axe Trident while decimating defence spending will leave us vulnerable and with fewer armed forces and yet more unemployed.
• Declining support for multiculturalism will add aggravation here to the general feeling of despair.
• Confidence will collapse, civil life will be at risk.

Of course the Libs could wake up, smell the coffee and engineer a coalition collapse in time for an October General Election.

So just where is Tinkerbell when you need her?