Earlier this year I predicted that the Tories would win an outright victory at the next General Election. The austerity programme that had been outlined by the coalition appeared to be accepted wisdom from the vast majority in the country, David Cameron had put his foot down with our European partners, and the leader of the opposition was performing like Wayne Rooney in an international tournament.

Fast forward six months, and Ed Miliband must believe that he is back in the game. The UK economy has drifted back into recession. Cameron looks isolated, rather than strong, on the international stage. 99 U-turns since the pasty tax budget have done little for the coalition’s credibility. And the Tory-Liberal Democrat squabbles appear to be getting more regular and far bitterer by the day.

This week, quick on the heels of the Prime Minister’s crass intervention on the personal tax arrangements of Jimmy Carr, the government have found themselves once more lagging behind public opinion, and the opposition, on the LIBOR crisis.

The mistrust of banks is now at an all time high. Whether this is fair or not is beside the point on the political battlefront that is Westminster. People’s instincts tell them that there is something rotten in the higher echelons of our financial institutions. They see their wages being frozen, or in some cases cut, public services being axed, and unemployment figures, particularly among the young, climb to unacceptable levels.

In short, the British people do not see the current ‘arrangements’ as fair. And the British are great believers in fairness.

Cameron may disapprove of the banker’s behaviour in relation to LIBOR, but he fails to demonstrate enough anger, concern and pro-activity in dealing with the problem. 

Miliband, ably supported by Labour rising stars Rachel Reeves and Chuka Umunna, have been quick to call for action, and in the end they may well force a Public Inquiry.

For those who suggest that there is danger in this for Labour, as the last government were at least partly culpable for the problems that are now emerging, is to miss the point. Like banker’s, politicians are not liked, nor trusted. But when things go wrong, we expect our political leaders to be as determined to uncover the truth as we are. This week, Cameron has just looked like he is protecting his mates. Miliband has been on the front foot, wanting to highlight wrongdoing even if it does mean embarrassing some of his former ministerial colleagues.

Odds are that Cameron will recover before the next election and regain some of the Midas touch that got him through the doors of number ten a little over two years ago. But his chances of winning an overall majority are looking far less likely. 

Oh how we Brits scoffed at those eccentric Greeks when they took to the streets to protest at the austerity measures that were being demanded of them by their Eurozone partners. How we gasped in disbelief as we were told of the horrors that faced the far less sophisticated economies of Spain, Italy and Ireland, who saw their triple ‘A’ credit ratings downgraded quicker than you can say ‘bankers bonus’. And how we laughed as our old adversaries, the French were left in no doubt by their German paymasters that its spending had to stop.

These nation states were out of control, not helped by their membership of the dreaded currency, the Euro. They also have citizens who appeared not to grasp the realities of the financial mess they are in – you cannot spend what you cannot afford, and the sooner Johnny Foreigner gets used to that fact, the better.

By contrast, UK PLC had managed the world economic storm well. Maintaining a Triple ‘A’ rating, and having a government that was in charge of its own economy and destiny, with a budget strategy that would wipe out the deficit in a single parliament. Yes, there would be a barrage of public sector cuts, but these would be offset by an energised, buoyed private sector which would step into the breach, and so ensure that the dreaded prospect of mass unemployment was avoided.

But wait. Last week, the Office of National Statistics reported that the UK had gone into ‘double dip’ recession. Worse, despite the austerity measures that the government has taken, our national debt is increasing – and the likelihood is George Osborne will miss his target of wiping out the deficit in this parliament anyway. The private sector continues to struggle against a backdrop of access to credit challenges and a failure of the government to offer any innovative practical support for growth. Talk has been rampant about cutting red tape and bureaucracy. Action has been non - existent.

The mantra ‘we are all in this together’ has led to the coalition veering away from any tax cuts based strategy, even though it is in this area where small businesses, particularly those in the service sector, are crying out for help.

It is small and medium enterprises that have all but been abandoned by government policy- despite the recognition that this is the community that can save UK PLC – and the government must act sooner rather than later if it is not to go from crisis to chaos over the next twelve months.

As its tax reserves shrink with the continued rise in jobless totals, does it not make sense to offer incentives to small companies to take on additional staff by offering us an NI holiday? As spending in our shops, pubs and restaurants dries up, can we not see that a decrease in VAT is the sure fire way of helping our tourist and service industries? And is it beyond the wit of the Prime Minister and his colleagues to see that harassment of small business owners by HMRC has them scrambling for cover rather than going for growth?

This is not the way you build an enterprise economy. It is the way you flat line an economy.

If being outside of the euro offers us freedom, then we should use it. If we need to fall foul of some nonsensical Brussels bureaucracy, then we should do so. If we need to balance spending and cutting more than was first thought, along the lines adopted by the USA, then let’s admit we were wrong and make the necessary U turn that is required.

The Brits are patient, pragmatic people. We don’t easily take to the streets to protest. But all pain with no gain is a recipe for unrest. More bad news from the powers that be may lead to ‘deficit denial’ that goes way beyond eccentric Europeans and the opposition front bench, if there is not a sharp upturn in fortunes over the next quarter. 

How is the economy performing at the moment? What sectors are strong, which are weak? Are the banks really open for business? Does the business community feel confident?

These are all questions that are being frequently asked by commentators and politicians as the UK economy struggles to convince many that it has come through the worst of the downturn and is now heading towards recovery.

The fourth annual Lancashire Business Survey which Downtown launched earlier this week alongside our sponsors Forbes Solicitors, Moore & Smalley and Soap Media, will I’m sure provide us with a good indication of what the county’s private sector is thinking – about these issues, and much more besides.

The survey, perhaps, has even more significance this year, coming as it does just at the time that Lancashire has finally established a Local Enterprise Partnership (LEP). The recently appointed board need to engage with the wider Lancashire community, and this piece of work will give them a useful resource as they begin to map out a strategy and agenda for the next three years.

We often complain about decision makers not pursuing business friendly policies, not communicating or consulting effectively. Well, here you have the chance of putting your views directly to them. I would urge you not to miss the opportunity. Visit www.lancashirebusinesssurvey.co.uk and spend ten minutes letting us know what YOU think. We’ll make sure the LEP, and others, listens.