22/01/08 - Gordon Brown Failed To Prepare Britain For Rainy Days That May Lie Ahead

How Gordon Brown failed to prepare Britain for rainy days that may lie ahead 

1. Economic Incompetence

• After fifteen years of global growth, our public finances should be in a healthy state - most other countries' finances are.
• However, after Gordon Brown’s ten Budgets, both the OECD and the European Commission estimate that we have the largest structural budget deficit in Europe - a deficit that is more than twice the size of the EU average.
• This is because Gordon Brown borrowed in a boom, when he should have saved. That is sheer economic incompetence.
• Yesterday’s public sector finance figures show that public sector net borrowing is at its highest ever level for December, at £7.8 billion. Net borrowing in the financial year to December is running at £43.6 billion, more than £11 billion higher than at the same point last year.
• In total, over the last five years, Gordon Brown has borrowed over £100 billion more than he originally planned. That’s more than was spent on the entire NHS last year.

2. Northern Rock – A second mortgage for every family in Brown's "Life on Mars" Britain

• Under the 1970s ‘Life on Mars’ style partial nationalisation announced yesterday, Gordon Brown wants British taxpayers to provide a £25 billion mortgage to Northern Rock for years to come. Taking into account the guarantees to depositors, the total taxpayer liability now stands at almost £55 billion.
• That’s equivalent to a £2000 mortgage for every family in the country – a second mortgage on every home.
• It would also be enough to build a new high-speed rail system covering much of Britain, transforming regional mobility and promoting economic growth.

3. Financial institutions

• It is clear that Gordon Brown’s tripartite regulatory system has failed. As Goldman Sachs put it: “The ‘Northern Rock’ factor has badly dented the UK's reputation for being the world's pre-eminent financial centre.”
• We also need to reform the way the Bank and the FSA supervise the liquidity of individual institutions. The BoE needs to be given new powers to take control of a bank on the brink of crisis.
• In addition, savings protection needs to be increased to cover at least the first £50,000 of savings. This would cover 95% of all deposits and is equivalent to the $100,000 that is protected in the United States.

4. Economists' verdict

• As a result of Gordon Brown’s failure to take advantage of fifteen years of global growth, economists and analysts agree that Britain is now poorly prepared for any possible economic downturn.
• Alan Greenspan, who now advises Gordon Brown, says, the UK economy is “more exposed” than the United States to financial instability.
• Goldman Sachs, the Treasury’s advisers, say “the UK is slowing more than the rest of Europe”
• The OECD states that the difficulties are “going to be larger in the UK than elsewhere”.
• One of the country’s leading economic commentators, Anatole Kaletsky, writes today in the Times: “It seems fair to say that Mr Brown's career as a serious politician ended yesterday.”

Cllr Justin Tomlinson, Swindon North Conservative Parliamentary Candidate, "Labour's spend, spend, spend mentality without thinking of the future has leaved Britain exposed with seemingly out of control high debts.  Labour simply can not be trusted with our economy."