Gordon Brown’s recession (his team, including Ed Miliband and Ed Balls, must take some of the blame) created the deepest UK recession since the war. Manufacturing output declined 7% by the end of 2008, and it affected many sectors including banks and investment firms, with many well known and established businesses having to fold. The unemployment rate rose to 8.1% (2.57m people) in August 2011, the highest level since 1994. Labour, the BBC and their fellow travellers try to blame this on the banks and the hard of thinking believe them, however look at the facts and it is very clear who is to blame, Gordon Brown. Proof here here and here. (Click highlighted text to open document).
The bank “rescue” orchestrated by Brown was abysmal. Under capitalism the shareholders and bondholders pay for a management failure. Under Brown’s cronyism the state paid. A Scottish prime minister throwing (mainly) English taxpayer’s money at Scottish banks to save Scottish jobs. Look at Washington Mutual to see how it should have been done, with assets valued at $327.9 billion, that went bust in 2008 with capitalism sorting out the mess.
Also worth noting is that the headline figure bandied around for the bail out is £500 billion. Another lie. The RBS Group raised £5 billion in preference shares and £15 billion in ordinary shares. HBOS and Lloyds TSB together raised £17 billion, £8.5 billion in preference shares and £8.5 billion of ordinary shares. So £37 billion in total. An amount that was then a little over two weeks of the average spending for the UK government.
And Brown, far from solving the banking problem was actually instrumental in making it far worse. He vetoed Barclay’s proposed rescue of Lehman’s. “We don’t want US problems infecting the UK system” the US government was told. Lehman’s went bust and contagion on both sides of the Atlantic was the result. Labour do not, never have and never will understand business or economics, if they did they wouldn’t be socialists.
So back to Labour’s austerity lie. And their cost of living crisis, NHS crisis and other assorted crisis lies.
The coalition government with George Osborne as chancellor have followed a clear and well thought out long term economic plan. The IMF and Ed Balls said that it would not work. They were both very, very wrong. It has worked spectacularly, brilliantly well and we now have one of the world’s best performing economies.
Unemployment has fallen to 1.91 million, its lowest level for more than six years. The UK is creating more new jobs than the whole of the rest of the EU put together. There are now 30.8 million people in work, the most ever in the history of this country. The ONS say wage growth outpaces inflation. In the September to November 2014 period, average earnings were up 1.8% from a year earlier whilst inflation was just 0.5%. So people’s real incomes are increasing. No austerity there.
The UK is the world’s fastest growing advanced economy. Whilst the US growth was 2.4% in 2014 the UK’s GDP rose by 2.6%, the strongest growth since 2007 and the best performance out of the G7 nations. The UK economy is now 2.9% above the previous peak, and has recouped all of the loss in output recorded in Gordon Brown’s recession. No austerity there.
George Osborne has rapidly increase personal income tax allowances from £6,475 in 2009/10 up to £10,000 now. Massively favouring poor tax payers. Rich people do not get these allowances. Millions of lower paid people no longer pay any income tax at all as a result of this. No austerity there.
The government deficit has been brought down by George Osborne by one third in cash terms or one half as a proportion of the economy. Despite the difficult global economy. Without needing austerity.
As you can see Labour’s claims are a complete lie.
However there are a couple of areas where George Osborne is rebalancing the economy. Which was much needed.
The first was controlling public sector wages. These had grown to become far, far bigger than private sector wages for comparable jobs, despite all the extra benefits that public sector employees enjoy. The was immoral, unjust and unfair. So public sector pay restraint is gradually bringing the two sectors back in line. No fair minded person can complain at that.
The second area is the overall reduction in the size of the state and the increase in the size of the private sector. This is brilliant because it is the private sector which creates all the wealth in our economy, the public sector just spends it. It is obvious that this change will create a more powerful and faster growing economy. Something that has been proven here and here and here. (Click highlighted text to open document). Gordon Brown increased the size of the public sector to 52% of the total British economy. This was fundamentally stupid and did massive harm. Osborne has corrected this to the limits possible by the global economic situation, it is not something that can be changed overnight. In the 2014 budget he announced that he intends to continue doing so till the state is down to 35% of the total economy. This is brilliant and it is not austerity, it is making Britain Great again. The left try to call this austerity, but it isn’t. Austerity is what Attlee did to Great Britain with the whole population on starvation rations for six and a half years till he was voted out.