A Telegraph piece reports that JP Morgan think "Britain's economy is now in a comparable state to the 1970s," and that in many ways "the UK’s fiscal position is currently worse than observed around the IMF loan in 1976." This is very bad news indeed. In the 1970s Britain was the "sick man of Europe," if not the laughing stock of the world. Government debt, in proportion to the size of the economy, is higher now than it was then.

There is one crucial difference between then and now which gives grounds for optimism. In the 1970s no-one knew if a ruined economy could be restored to life and health. After the experience of the 1980s, we now know that it can. Once we started doing the right things, the recovery came much faster than any of us thought possible. By the mid 80s Britain had gone from being in many respects the worst performer in the EU to being the best. That experience should hearten us for the task ahead: we did it before and we can do it again.

We discovered something else then. It was that a leader with a firm philosophy can have the stamina to persevere with correct measures, enduring the unpopularity they bring, in the conviction that success will come. In the late 70s and early 80s, no-one knew if that philosophy would successfully restore economic health. Now we know that it did, and therefore that it can. Those two lessons make all the difference between then and now, and give us more grounds to be optimistic about the future.