The Tories clearly intend to fight this election by blaming Labour for the budget deficit. Nobody disagrees that our national deficit and debt are serious issues that the next government will have to address, but is it fair to blame Labour?
David Mowat and I had a brief discussion at the 2007 local election count. I suggested that National Debt was substantially below what was left by the Tories in 1997, he claimed it wasn’t, it was higher. Neither of us had the facts, but now, two years later, I have found them, and they come from the newly independent Office for National Statistics which is regulated to ensure its political impartiality.
The graph shows that in 2007 I was right, and the Tories accusation that Labour didn’t put money aside for a ‘rainy day’ was wrong. Labour paid off National Debt for its first four years in government and then borrowed, they would say prudently, to invest in hospitals, schools, universities and transport.
While that investment may not always have provided the best value for money at least it was there. I remember the worn out schools, inadequate hospitals and clapped out railway system the Tories left at the end of their period in office. I have no faith in the Tories’ ability or willingness to protect these vital public services.
The graph also shows the shocking extent of the bail out for the banks. If you remember the queues outside Northern Rock branches, imagine what it would have been like if that had been every bank. Imagine if your money stopped coming out of the cashpoint and your savings disappeared. That was the cataclysmic situation that our government and most other governments in the developed world faced when the modern banking system was in danger of collapsing
Weakly regulated international financiers, who benefited from the deregulation encouraged by Mrs Thatcher and Ronald Reagan, had invented means of lending money backed by assets that didn’t exist. Real people borrowed that ‘imaginary’ money to buy overpriced houses and consumer durables, that didn’t turn out to be all that durable. So as consumers spent money that wasn’t really there, often on manufactured items from China which were cheap enough to keep down inflation, a day of reckoning had to come. The graph shows how devastating that day of reckoning has been and how much the government has had to put into the banks to prevent collapse. The recession triggered by this disaster has inevitably led to much higher spending in addition to the money the government had to lend to the banks.
Politicians will oversimplify and distort this story. So far only Vince Cable has been straight with electors about the nature of the problem and the difficulty of resolving it. If ever there was a national disaster that called for a government of national unity, this is it, and neither of the old political parties that rely on passing power between themselves every decade or so, is offering that. A vote for the Liberal Democrats is the only vote for real change, I hope I will convince you of that in the coming months.
Happy New Year
Bob