ABSTRACT
A Labour Government that comes to power in 1984 (or before) will face the biggest challenge that a new Government has faced for years-a challenge comparable to that of 1945.1 The economy will be in a critical condition after five years of dry monetarism; unemployment is likely to be between 4 and 5 million; the decline in output in 1980-2 is unlikely to have been substantially reversed. Barring upheavals in the Conservative Party leadership, the most likely estimate is that an election-winning budget from the present Government will take the form of tax cuts-for the middle-and upper-income groups, for the private corporations and for the wealthy. There will probably have been little substantial economic recovery, and it is unlikely that the economy will be back to its postwar trend level of output below which it has operated since 1974.
