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It is hard, even for those old enough to remember, to recall the nature of Britain when the Conservatives led by Margaret Thatcher came to power 30 years ago, and to recollect just how bad were the circumstances and how great the challenges.

To put it into perspective, it is generally agreed that the government to be formed after next year's general election (more likely than not another Conservative government) will enjoy a singularly unattractive inheritance. It will be obliged to implement and sustain some highly unpopular policies. But the problems of 2010, although considerable, pale into insignificance compared with those of 1979.

It is true that we are in the midst of the worst world recession since the war. But although lessons need to be learned about the financial fragility that has made it as bad as it is, recessions, however difficult and unpleasant, pass. And the fact that it is a global phenomenon, while exacerbating the economic problem, saves us from a lack of national self-confidence and the political difficulties that stem from this.

It is true, too, that Britain's public finances are in a particularly disastrous state, requiring a sustained period of public sector belt-tightening, with some tough decisions to be taken, the sooner the better. But abstracting from the cyclical deterioration caused by the recession, the underlying structural deficit today is not all that much worse than that we inherited at the peak of the (admittedly anaemic) cycle in 1979.

In every other respect, the situation in 1979 was far worse. Inflation was in double figures and rising. Everything else appeared to be in long-term decline. With the UK widely regarded as the sick man of Europe, even the normally restrained Bank of England (in its Bulletin the previous year) had warned that, "Now condemned to very slow growth, we might later have to accept, if present trends continue, declines in real living standards."

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