A mini bank run in the UK is presenting Gordon Brown with his first (overt) financial crisis. Writing in the Telegraph, Ruth Lea grabs the opportunity to take a look at Brown’s record as Chancellor [finance minister]:
The Tories handed Mr Brown an economic legacy he would mercilessly claim as of his own making in order to attack them in opposition. Mr Brown’s legacy as Chancellor does not, however, stop there. With the exception of granting the Bank of England independence on interest-rate setting, he chose not to build on the improvements of his predecessors. On the contrary, he has undermined the economy’s ability to withstand the economic squalls it will inevitably face. The first such act has been his public-spending spree. His flirtation with Prudence was just that and, after two to three years of tightly controlled public spending, the taps were well and truly turned on. The consequence has been one of waste, a large increase in the public-sector payroll for little return and poor productivity outcomes. Even Sir Derek Wanless, adviser on Mr Brown’s misguided experiment of pouring large quantities of cash into an unreformed NHS, has conceded that much of the money has been squandered. Taxes have been increased to pay for this profligate exercise, but not enough to cover the costs of the higher spending. Last year the Government borrowed more than £30 billion and the debt/GDP ratio is increasing inexorably. Given the growth in the economy, this is irresponsible. In times of economic growth, war chests should be built up or taxes should be cut. The nation’s indebtedness should not be growing.The second act has been the undermining of the country’s international competitiveness. Britain’s skills deficiencies have not been addressed.Instead, the Government has relied on uncontrolled immigration to meet labour-market inadequacies irrespective of any potential social problems that may arise from it. Taxes have risen and the regulatory burden, part EU in origin, on businesses has undeniably increased. There is no doubt the UK has slipped down the league tables as compiled by organisations including the World Economic Forum and the International Institute for Management Development.Given his huge good fortune of a benign global background and a golden legacy, Mr Brown’s incumbency at the Treasury should have achieved more.And his boastful arrogance, as the economy risks turning sour, makes the Government look vulnerable.
And who was Prime Minister when this was going on? I think we all know.