Whichever party wins this election will have to inflict such painful austerity measures on the British population that they will soon find themselves out of power for a generation. Not my words, the words of Mervyn King, Bank of England Governor.

Or so says American economist David Hale, who says King confided this with him over lunch last week.
To be precise, he said: “I saw the Governor of the Bank of England last week when I was in London and he told me whoever wins this election will be out of power for a whole generation because of how tough the fiscal austerity will have to be.” Ouch.

Now, based on precedent, the chances are that King will deny these remarks (and be pretty furious that Hale has blurted them out in an interview in Australia). Moreover, I happen to know King was out of London most of last week (first on holiday, then at the G20 meetings in Washington) so quite when this lunch happened is unclear. Though I understand they certainly have met.

However, leaving this inconsistencies aside, the comments do seem plausible: King has said repeatedly that the Government will need to impose far more ambitious cuts on the deficit than it currently plans. The comments ought to stand as a reminder that although the focus of the election has switched away to bigotgate, and the economic focus worldwide to the eurozone malaise, Britain faces a decade of hurt in the wake of its decade of debt.

The Institute for Fiscal Studies spelt it out earlier this week in typically frank terms. Labour and the LibDem plans imply the biggest squeeze on public services since the 1970s, when the IMF was in town. The Tory plans imply the biggest set of cuts since records began in 1948.

And according to Andrew Lilico of Policy Exchange, who wrote the definitive guide to previous spending cuts a few months ago, the most comparable period of austerity was probably the 1920s. The ‘20s – in case anyone was in doubt – was a far tougher period for Britain’s economy than were the 1930s – the UK was deflating like mad to try to regain membership of the Gold Standard in the 1920s; in the 1930s Britain’s early departure from the gold standard meant the decade was far less painful than for many other countries. The problem is that unlike the 1920s we can’t simply take millions of women (who had been called up in WWI) off the public sector payroll. Unlike in the 1970s we can’t inflate our way out of the debt disaster (at least with the current monetary policy stance).

But the main point I would take away from King’s (alleged) comments is this: no-one yet comprehends just how tough the next five years will be. For obvious reasons: we have not experienced anything like it in our lifetimes. We have been insulated from the full pain of the financial/economic crisis so far by unprecedented low interest rates and by the bank bail-outs. At some point, the anaesthetic will wear off and we will face a period of austerity that may well make the ruling party so unpopular that it effectively becomes unelectable for decades. There will be strikes; there will be stagnation; there will probably be a double dip of some variety. But this time the pain will be unmistakeably imposed by the politicians.

Tonight in the final television debate, my bet is that the most-used phrase from each of the party leaders (and particularly Brown) will be “difficult decisions”. But I wonder how much any of them understand just how difficult those decisions will be.

UPDATE 15:00

It turns out that it was actually last month that Hale was in town, and if there were any doubt about it, he did have a meeting with King. There are plenty of examples of King issuing veiled and less-veiled swipes from the Governor to the Government, but a contact remind me of this one, from the Treasury Select Committee last year, which really stands out:

I have to say, I think the most interesting and potentially politically sensitive thing that MK has said was to the Treasury committee last in June last year:

“I think that we are confronted with a situation in which the state of the deficit is truly extraordinary, 12½pc of GDP is not something that anybody would have anticipated even a year or two ago, and this reflects the scale of the global downturn. It also reflects the fact that we came into this crisis with fiscal policy along a path that was not itself sustainable and a correction was needed.”

Not only a warning about the future but a pretty harsh critique of Government spending up to that point.