Opinion by Michael Fabricant MP.
PM?s ARROGANCE IS MISPLACED
Are we ?Reykjavik-on-Thames?? The British economy officially sank into recession on Friday. We all knew it was coming. The political narrative repeated by Gordon Brown and his ministers is that this is ?a global problem?, that Britain is best placed to recover from it due to the financial management of the Labour Government?s 11 years in office, that Labour had nothing to do with the cause of the recession, that the Government are solving the problem, and that the Conservatives would ?do nothing?.
This undoubtedly is a global problem, but significant question marks hang over the rest of these arrogant assertions.
Certainly if economists thought Britain were best placed to recover from the present situation, the foreign exchange markets would not be marking down the pound against both the US dollar and the Euro. And the New York Times would not be referring to the City of London as ?Reykjavik-on-Thames? – a reference to Iceland?s bankrupt economy and their need for emergency aid from the International Monetary Fund. This is a stark reminder of when, under the last Labour Government, Britain had to seek aid from the IMF in 1976.
Gordon Brown?s perpetual bombast is misplaced. Now that boom has turned to bust with a vengeance, despite the promises by Blair and Brown that this would never again happen under Labour, the British economy is expected to shrink by 2.9% this year compared with 2.6% on continental Europe and 2.1% in the United States.
Under the 11 years of Gordon Brown?s financial charge, we were far from prudent. Our budget deficit will be a staggering 9.4%of our gross domestic product compared with just 4.9% in continental Europe. Manufacturing in the West Midlands and elsewhere has been decimated. Gordon Brown has very little to be proud of.
And the Government is making matters worse! Firstly, they put up National Insurance which is a tax on jobs at the very time we want to keep people in work. Secondly, we wasted untold billions cutting VAT by 2.5% which has totally failed to stimulate the economy. It cost retailers millions to reset their prices without generating additional sales which has resulted in still more pressure on a volatile market ? some 3 million people are employed in retailing.
But perhaps the biggest of Brown?s mistakes stems back to 1997 when as Chancellor he stripped the Bank of England from regulating banks and other financial institutions. It was that single move which created the reckless environment from which we are now suffering.
What of the charge that ?the Conservatives are the do nothing party? ? a mantra repeated constantly by Labour MPs? Not true! At Prime Minister?s Question Time last Wednesday, David Cameron said ?The Prime Minister talks about action, but the fact is that when we suggested a national loan guarantee scheme, he attacked it?and he has now introduced it. We suggested changing the terms of the bank recapitalisation; he attacked it, but he has now introduced it. We said that he needed to extend the special liquidities scheme; he attacked it, but he has now introduced it. The fact is that he is behind the curve on every single issue.?
Across the Atlantic, the election of Barack Obama faces him with a whole series of problems. The millions of Afro-Americans and Hispanics who voted with hope for the first time have high expectations. At a time of economic stringency, these will be difficult to fulfil. Despite a vote in the House of Commons – which inconveniently occurred in the middle of the inauguration ? I found it hard not to see the similarities been President Obama and the body language of Tony Blair when he was first elected Prime Minister in 1997. The whole world must hope that Obama?s legacy will be more enduring.