PMQs was much the same as ever; I thought Clegg had the best line, about Labour: "Look at them now. You've failed. It's over. It's time to go." Cameron focused on Brown's major mistakes - Army funding, the economy and so on, especially increasing National Insurance Contributions. One of Brown's claims made me want to deliver leaflets even more: that by reducing the NI tax, the Conservatives would take "£6bn out of the economy". Sadly he wasn't challenged on that. Only someone whose entire life has been lead at someone else's expense could say that leaving money with taxpayers, so keeping people in paid work, was taking money out of the economy. Government taking money from taxpayers isn't putting money into the economy; if anything, given greater public sector inefficiency, its the opposite.
Its a really scary thought of Brown's: he knows how to spend money better than we do.
He peformed well against Humphreys this morning in that he managed to blame everyone else for the current economic position - especially the US regulatory system and "The global banking crisis". And said that when he said he had abolished "boom and bust" he meant he had turned the UK into a low inflation, low interest rate economy.
The only trouble is that he didn't: the transformation came when Ken Clarke started as Chancellor after we delinked from ERM and decided to have formal inflation targeting (which was in 1992/3; there's a good paper from Mervyn King in 2002 on the subject):
He does deserve credit for not messing it up but he can't take credit for the improvement in the UK's position. (There's also an argument that low inflation was mainly caused by China's economic development as a low cost provider of consumer goods, but lets not go there - it's all too complicated). He can however be criticised for giving the Bank of England the wrong targets: he did not ask them to review asset price inflation, which boomed unsustainably and caused much of the UK's current problems. He did not create a low inflation economy; he did oversee a boom and bust in asset prices.
And I do think the system of financial regulation, which was his, and the massive public sector spending increases without efficiency improvements, which was his, meant he can genuinely claim to have created the boom and bust in asset prices.
His last point was that he worked hard to protect the financial system and the banks by the action he took in 2008. I've earlier set out thoughts on why he made the recession worse by doing too little too late, but the key fact is this: other countries - even the US - didn't have such a bad crisis in their banking sector because they had a better system of financial regulation.
So overall - he didn't persuade me that he was fit to control our financial affairs. He messed up and is now blaming everyone else and changing history to prove it wasn't him.
1 comment:
It is quite unbelievable that Gordon Brown thinks reversing part of the NI hike is "taking £6bn out of the economy". Consumers and businesses are no longer part of the economy? Only the State is the economy? You couldn't make it up could you?
Marks & Spencers say the NI rise will cost them £13million. Profits down this much on their 11.7 P/E ratio would drop the company's value by £152million. On this basis GB's £6billion NI charge would have a £70 billion negative effect on pension schemes and other investment funds, adding to the black hole he's already made in what used to be the best pension plans in the world.
Good luck with your leaflet deliveries. I'm doing the same here in Suffolk. We're both doing our bit to rid the nation of the worst economic vandal in the country's history.
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