In his piece entitled “Back to the Future”. Martin Wolf of the Financial Times hits most nails on the head. He also sets a challenge for those who want to do more than occupy the green benches to the right of the Speaker’s chair.

He believes that Labour and Conservative politicians have simply turned their backs on the need to fashion and campaign for economic and social policies that equip the UK to meet the challenges of the decade ahead. The formula for economic growth that emerged under Thatcher, which was inherited and uncritically maintained by Blair and Brown, relied on ever expanding business services and financial intermediation. It took the bonanza of North Sea oil and gas bonanza for granted. While the UK economy grew faster between 1997 and 2006 than the economies of European rivals Conservative and Labour politicians were blind to how narrowly that economic success was based.

Wolf directs his readers to the thoughts of Andrew Haldane of the Bank of England. Haldane is the Bank’s Executive Director for Financial Stability. He recently pointed out (PDF) that “the debt position of the financial sector, households, companies and sovereigns [painted] a sobering picture” – and went on to add that the position of the UK was the most sobering of all. While the shift in total debt ratios in ten leading economies increased from an average of 200% in 1990 to more than 330% by 2008 in the UK the debt ratio rose “from just over 200% to around 450% of GDP”.

Both Haldane and Wolf believe that recovering from such an extraordinary debt overhang, in an economy that has become as unbalanced as the UK economy, represents an unprecedented economic and political challenge. Simply slashing public expenditure, to contain and reduce the cost of sovereign debt would be no better than vandalism. However, ignoring levels of sovereign, household and company debt in the UK would be no more intelligent or realistic. As the Institute of Fiscal Studies has shown, in its analysis of both Labour and Conservative plans for fiscal adjustment and public sector reform, the differences between their economic plans can be accommodated within the error terms in forward projections of both public expenditure and tax in the period up to 2015-16.

Wolf has chosen his words carefully. We face a “calamity” and “the big parties are at a loss over how to respond”. They are in denial. While it will be necessary to cut our coat according to our cloth UK society and economy have to change fundamentally. Party leaders have a choice; a choice between explaining and leading change or being overwhelmed by it. We cannot resist it.

It is not simply a matter of when and how public budgets are redrawn – important as this is. The most important questions have to do with the kind of economy and society that we want to create. Will it be fairer, will it be greener, and can it be more intelligently integrated into the economic life of the European continent and of the wider world?

Wolf puts it very well: “The party that deserves to win must craft a narrative and policy that creates opportunity out of disappointment. Competence is required, as is toughness. But the UK needs more than these qualities. It needs the ‘vision thing’”.

Ed Randall, a Liberal Democrat councillor in the London Borough of Greenwich from 1982 to 1998, edited the Dictionary of Liberal Thought jointly with Duncan Brack. Ed lectures on Politics and Risk at Goldsmiths University of London and is the author of Food, Risk and Politics, published by Manchester University Press in 2009.