One of Labour’s most powerful criticisms of the Thatcher/Major governments was that they had presided over “boom and bust”. The loss of its reputation for economic competence after “Black Wednesday” was undoubtedly one of the main factors that contributed to the Conservative defeat in 1997 and Labour’s landslide. Tony Blair and Gordon Brown promised “no more boom and bust”.
Figures released yesterday show that the economy shrank by 5.6% on an annualised basis to the middle of 2009. This is the worst recession since the Great Depression in 1929/31 when the economy contracted by 5.8%.
GDP shrank by 0.8% in the second quarter of the year, when economists had predicted a fall of 0.3%. As I have stated before, the Chancellor’s forecasts were wildly optimistic, with a prediction of “just” a 3.5% contraction this year. The consequences for taxation revenue, benefit expenditure and thus the public sector deficit will be even more dire than we thought.
The Government needs urgently to get a grip on spending if the UK is not to lose its international “AAA” credit rating in the money markets. The consequences of the UK being rated alongside developing nations are too horrendous to contemplate but that is where we are headed.
Gordon Brown as Chancellor and Prime Minister has brought this nation to the brink of bankruptcy and in so doing risks throwing away the hard won economic benefits of the Thatcher and Major governments. He presided over a massive boom as Chancellor and has led us into the biggest bust for almost a century. One of the reasons I became a Conservative was Labour’s previous record of economic catastrophe and the need for Conservative governments to clear up the mess. The need for a Conservative government is once again patently obvious to all but the ideologically blinded.
Here are just a few of the quotes that Labour might rather regret now:
“I want this to be the New Labour Government that ended Tory boom and bust forever.”
Tony Blair: 1997 Conference Speech
“Today, the Bank of England has agreed with me that, if we are to prevent the cycle of boom and bust, inflationary pressures in the economy, which the previous Government negligently failed to tackle, must be brought under control.”
Gordon Brown: July 1997
“I am satisfied that the new monetary policy arrangements will deliver long-term price stability, and prevent a return to the cycle of boom and bust.”
Gordon Brown: November 1997
“We will not return to the stop-go, boom-bust years which we saw under the Conservatives.”
Gordon Brown: April 1998
“The Government have put in place policies to deliver that objective and are determined to avoid a return to boom and bust.”
Gordon Brown: May 1998
“rigorous financial discipline that, together with monetary stability, ends once and for all the boom and bust that for 30 years has undermined stability “
Gordon Brown: June 1998
“Moreover, for decades we have been prone to far greater swings in the economic cycle than our continental counterparts. It has been boom and bust….Under this Government, there is an entirely new framework for economic management in place.”
Tony Blair: February 1999
“Indeed, Britain was set to repeat the old, familiar cycle of boom and bust. Since then, we have created and rigorously adhered to a new framework of modern economic management.”
Gordon Brown: November 1999
“On top of that, we have a healthy and stable economy and an end to the boom and bust that characterised the Tory years.”
Alistair Darling: January 2000
“We will not return to boom and bust.”
Gordon Brown: March 2001
“Labour economic stability has replaced Tory boom and bust.”
John Prescott : January 2005
“As I said, there are two approaches—first, a strong economy, stability and helping families or, secondly, the Tory cuts, the undermining of stability, and a return to the boom and bust of the 1990s.”
Alistair Darling: March 2005
“I have said before: no return to boom and bust.”
Gordon Brown: March 2006
“Boom and bust is a term that applied to the Conservative years and two of the worst recessions in history.”
Gordon Brown: December 2006