In the library of car-crash television, the video tape will be filed under "Nasty Shunt" rather than "Multiple Pile-Up". Even so, Gordon Brown's sulky exit from an interview with Sky's political editor Adam Boulton told us much about the Prime Minister's frame of mind. Having whinged that he was not asked appropriate questions, the self-appointed saviour of the world was unable to rescue his own dignity. In effect, he spat out the dummy. This is how losers behave. What Mr Brown would have preferred, or so he said, was an exchange on the economy. Surprised? Me too. A rational man, carrying a record of mismanagement akin to the Prime Minister's, would surely put a session with the proctologist ahead of a discussion on debt-slave Britain. Rationality, however, no longer resides inside No 10. It was banished along with humour and self-deprecation. But if the Prime Minister is really serious about chewing over the country's economy, let's offer some gum. Turn back the clock to March 17, 1998, the day on which the then Chancellor set out his stall in his first proper Budget. Headed "New Ambitions for Britain", it was an opportunity for reform, as Mr Brown conceded, that comes but once in a generation. His speech was long and detailed, containing observations on past failures, as well as future goals. In a way, it was Mr Brown's Ten Commandments, a framework for government. He said that we had to "break for good from the conflicts and dogmas that have held us back for too long", and spelled out his vision for a national economic purpose built around new targets. These were his criteria for success, the yardstick by which he would be judged. So much has happened since then, it's easy to forget the kind of economy that Mr Brown had in mind: one based on "prudent monetary and fiscal rules", with a tax system that "makes all work pay", and "a modern welfare state that, instead of trapping people in poverty, provides opportunity". As Mr Brown's few remaining loyalists pick through the rubble of his reputation, wondering how it collapsed, an explanation will not be found in what some call his lack of "emotional intelligence". Voters would happily forgive him for an absence of touchy-feely stuff, if only he had delivered the Shangri-La that was promised 11 years ago. In his 1998 Budget, Mr Brown declared with admirable awareness: "The Chancellor is above all the guardian of the people's money." Yes, the people's money, out of which he has now run. Britain is skint in a way that not even Mr Brown's worst enemy could have predicted. One sentence from that speech highlights the scale of what has happened. Admonishing the Conservative benches, he said: "Last year [1997], spending [by government] exceeded revenues by £23 billion, and when we came to power we inherited not only a cyclical deficit but also a structural deficit in excess of two per cent of national income." It sounded grim at the time, but if that were the extent of Britain's troubles today, Labour would already be home and hosed at the next election. This year, government borrowing will be about £200 billion and Britain's structural deficit (the in-built overspend that has nothing to do with recession) has raced up to 10 per cent of GDP. We are in this mess because at the peak of the economic cycle, 2005-07, Mr Brown did what the recently rehabilitated J M Keynes advised against: he ran a sizeable deficit to pay for a spending spree. In his last three years at the Treasury, Mr Brown borrowed more than £100 billion, much of which was poured into unreformed public services. The money went through the system like prune juice – in and out very quickly – funding an explosion of administration costs and paper-shufflers' salaries. The public sector's pay bill rose by 30 per cent in the five years to 2008-09. At £158 billion, it now accounts for nearly one quarter of government outlay. As the Organisation for Economic Co-operation and Development concludes in a report, Doing Better for Children, the upshot is dismal: "High public spending on child welfare and education in the UK is failing to produce results in many key areas… The UK spends more on children than most OECD countries… but the proportion of youth not in school, training or in jobs in the UK remains high… Under-age drinking and teenage pregnancy rates are high. [Youth] Drunkenness is the highest in the OECD." I have no idea if Mr Brown is popping pills, though I guess not. He doesn't seem the type. Much more of his economic wizardry, however, and the rest of us will be on elephant tranquillisers. It's such a shame that he did not heed his own warning: "To balance the Budget for one or two years and then let it run out of control in the years that follow is simply to fail." Out of control is a subjective judgment. But with our annual deficit running at 13-14 per cent of GDP (double what it was in 1976, when Denis Healey was forced to grovel for a bail-out from the International Monetary Fund), with the biggest part of the bill being accounted for by welfare payments, it's difficult to see Britain's fiscal position in terms other than miserable failure. Ironically, the merit of saving was another of Mr Brown's important themes in 1998: "There is broad agreement that we must do more to encourage savings by everyone." It never happened. Far from promoting thrift, his Government endorsed a culture of cheap money and mindless consumption, awarding gongs to the very same bankers whom it now demonises. This hit a zenith – or do I mean nadir? – in the first quarter of 2008, when Britain's savings ratio (how much we put by as a percentage of what we earn) turned negative for the first time. At that point, the electorate and its leaders were in perfect harmony: a credit-card nation living on borrowed time. According to the Institute for Fiscal Studies, the long-term gap between Britain's tax revenues and public spending is £90 billion. It was entirely disingenuous of Mr Brown to imply this week that the hole can be filled in a painless way, through "efficiencies" and "cutting waste". In order to halve the deficit in four years, as Downing Street suggests, Alistair Darling will have to slash state hand-outs and brutalise the taxpayer. In Thursday's Guardian newspaper, for so long a Labour cheerleader, there was a picture of four ministers with a cruel caption, "Life on death row". They and the rest of their Cabinet colleagues are condemned because Mr Brown did what he pledged not to do – he murdered the economy.Gordon Brown must be mad to want to discuss his economic record
The Prime Minister has smashed the Ten Commandments laid down in his first Budget 11 years ago, says Jeff Randall
Friday, 2 October 2009
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