Micawber Brown – taking Britain to Debtor’s Prison

Micawber Brown – taking Britain to Debtor’s Prison

As Chancellor, Gordon Brown played on the notion that he would be seen as prudent and that his management of the economy would be seen as strong

But reality has come home to bite as the people of Britain have learnt the bitter truth, in that, his management has been very poor.

Prices rising everywhere, from basics such as food and fuel, and now tax changes affecting the most vulnerable and poorest of our society.

An analysis of the economy that Mr. Brown inherited from the beleaguered Tory government, does not make happy reading.

In 1997, the economy, after the traumas of the early 1990s, was performing remarkably well. Post-Black Wednesday, Norman Lamont made hard, but very necessary, decisions on fiscal consolidation and introduced inflation targeting. Inflation moderated, growth was strong, unemployment fell, the balance of payments improved and the public finances were transformed.

Indeed, when Mr. Brown made his triumphant entry into the Treasury building, the healthy state of the economy was explained to him.

Fast-forwarding nine years, it is clear that, the economy has been wrecked, and it no longer performs as well as it did in 1997.

You will not be hearing this from Mr. Brown.

At a time when the world economy has been, on the whole, remarkably benign, the performance of the manufacturing sector has been dire. Even though there has been a rise in employment, much of it in the public sector, unemployment is also now increasing quite sharply.

The deterioration in the current account of the balance of payments has been dramatic. In 1997, it was almost in balance; but now the deficit is over £27 billion. Deficits of this size can be financed - but not without damaging Britain's net asset position with the rest of the world.

When the Conservatives left office, public sector finances were moving towards surplus. The Chancellor added to this potential treasure chest by raising taxes – by removing tax credits for dividends paid to pension schemes, which has so damaged occupational pensions.

The evidence of falling productivity and wanton waste of hard-earned resources is little short of scandalous. And, of course, taxes have been increased substantially to pay for Mr. Brown's folly. But even with Mr. Brown's tax increases, public finances, far from heading towards balance as they were in 1997, are now stubbornly, structurally, in the red. Even when Chancellor, his own forecasts, predicted that public sector borrowing was expected to exceed £36 billion.

Given that the economy has been growing since 1994, the unhealthy state of the public finances should be regarded as a major achievement of irresponsible mismanagement.

Sadly, too, general economic competitiveness has deteriorated over the past nine years.

As Chancellor, Mr. Brown’s record is nothing to be proud of. He inherited a golden legacy, and squandered much of it.

Now as Prime Minister he wishes to finish the job and ensure that Britain end up in Debtors Prison.

Following last Thurdays’ excellent elections results, along with Boris becoming the new Mayor of London, have we as a nation, at last awoken to the follies of Micawber Brown.