Whoever is in government needs to be careful the recovery isn’t stifled by taxing spending further

Our last front page of 2009 proclaimed “It’ll be alright on the night”, and both the official and unofficial pronouncements show that’s just about how Christmas turned out.

On the whole, and with the inevitable exceptions, retailers prepared well for Christmas and customers defied the weather to come out and spend. At the time of writing we only have the earliest results, all of which look pretty good, although few major retailers are likely to better the John Lewis Partnership, which matched the right marketing, product and pricing with the improving mood of Middle Britain to achieve outstanding results.

Most retailers start 2010 in good shape too. Stocks have been managed well and the post-Christmas clearance Sales got off to a hectic start, helped by the January 1 VAT rise.

But there are clouds on the horizon, and whichever way the general election goes you’d be brave to bet against a further rise in VAT to 20%, particularly after shadow business secretary Kenneth Clarke went out of his way not to rule it out at the weekend.

Such a move would be a mistake, because two VAT increases in six months would put genuine pressure on consumers at a time when improvement in confidence remains fragile. Everyone knows the public finances are in dire straits, but whoever is in government needs to be careful the recovery isn’t stifled by taxing spending further.

It would be easy to emerge from Christmas and forget the UK is one of the few countries still in recession, that unemployment is still rising and that most forecasters are predicting house prices to fall further. But planning for 2010 needs to be based on cautious scenarios. Anything better would be a bonus.

On the subject of the Tories, their backing of a supermarket ombudsman this week was one of the earliest signs the election campaign is under way in all but name. But while it would be a populist measure, it is misplaced and would add expensive bureaucracy where none is needed.

While we might like to think that Farmer Giles supplies most of our food, in fact it’s giant corporations often much bigger than the grocers themselves. Of course grocers have to play fair, but penalising them for doing everything in their power to offer the lowest prices seems like an odd move from the supposed party of business.