UK plc is not in a great state and today’s PBR is a recognition that recovery is not just around the corner.
We are in a worse condition than our G20 peers; alone still in recession and with three quarters of recession ahead of us. The question to be asked is why we are particularly affected.
Did Gordon Brown make mistakes during his Chancellorship? Of course he did. I think pushing PFI has to be up there; that having been said, we did have a good decade and independence for the Bank of England is recognised on all sides as having been a good move. With the wonder of hindsight, we might criticise the Second Lord of the Treasury for having stuck to Conservative spending plans for the first few years of the first Blair government; it seemed prudent at the time. General management of the economy was good.
What, then, has led us to this parlous state?
Put simply, it is over-reliance on the City. We were over-reliant on the City for growth, jobs and tax revenue. We thought the goose would keep laying golden eggs, so we didn’t support manufacturing and industry. Metalbashing seemed so twentieth century. There is a term for a country that over-relies on a single export – banana republic. Christopher Hitchens’ definition is worrying in its accuracy: “a money class fleeces the banking system while the very trunk of the national tree is permitted to rot and crash”.
If this crisis had been in car manufacture, perhaps Germany would now be worst hit, mutatis mutandis for other G20 states, with the caveat that they weren’t as reliant as we were on our bananas of choice.
All of a sudden, we have rediscovered metalbashing and decided it’s a jolly good idea after all. All of a sudden, we have realised that relying overly on a single industry is a bad idea. Pity that it has taken a crisis in the very industry we chose to make us realise that we were rather closer to a banana republic than we thought!
Let us look now at the architects of our downfall; where as the Spartan, Dracontius, accepted his exile, the bankers want rewards – from us!
If Labour made mistakes in its administration of the economy, they came from being too close to the policies of the current opposition and I do not think a further move towards laissez-faire is warranted.
I’m not going to be making much of Osborne and Cameron’s crocodile tears; the crash is as much of their ideological making as anyone else’s; they made the wrong calls in crises; and the last thing we need is a return to their policies for the economy. Yes, my party made mistakes; they were the same mistakes a Conservative government would have made; we were both wrong but at least Labour appears to be recognising the fact.
xD.
that having been said, we did have a good decade
Which particular nation are you referring to, Dave? Not the Uk, of course, wsheich has been a total disaster in the last twelve years – mired in debt, Elfansafetee run riot, loss of personal freedoms, 3000 new crimes and sold out to the EU where even Milliband isn’t welcome in Brussels because they have their own unelected foreign minister now.
As the papers cried out this morning – Labour’s class warfare has backfired.
James,
If we look at the growth figures for the period 1989 – 2009, it’s been pretty good. I think we overheated and were too reliant on a single industry, so we were particularly badly hit when it went down the tubes.
We’ll have to agree to disagree on the other points, but they’re not massively relevant to the topic at hand.
xD.
Au contraire – the figures show the unmitigated disaster with the pound, the debt, the GDP, the lack of incentive for growth and you call these “good” figures, Dave?
.-= jameshigham´s last blog: Ladies and gentlemen, please adjust your links and feeds =-.
Dave, with deep respect:
link
.-= jameshigham´s last blog: Ladies and gentlemen, please adjust your links and feeds =-.
Edit – shortened link because it was screwing up the sidebar!
James,
Things have not gone well since 2007. I don’t contest that, although I contest how much they are in the ability of any PM to remedy. The link to Burning our Money relates to the period since 2007. I am not talking about that period alone.
We had had relatively fair economic winds for some time – since before, I think, Labour’s accession to power – but we did not prepare for the storm we are now experiencing and, indeed, made it worse for ourselves by putting too many of our eggs in that particular basket.
If you look at this graph, you will see that the trend for GDP is upwards until 2007.
xD.