If there is one date future historians may look back on as having heralded the eventual self-destruction of Britain – let alone that of the New Labour "project" – it is July 14, 1998. That was the day Gordon Brown first indicated that, after initially sticking to the strict curbs on public spending he had inherited from the Tories (which by 1999 had cut back the Government's share of national spending to 36.3 per cent), he was now preparing to let rip. As The Economistput it at the time, it was the moment when the Iron Chancellor morphed into Father Christmas. By 1997, public spending stood at £322 billion. After Mr Brown's 1998 Comprehensive Spending Review, it was projected that it might almost double, over 10 years, to more than £600 billion. So it turned out. The public sector exploded in every direction, as these additional hundreds of billions began flooding into health, education, social benefits – and into the inflated salaries and pensions of our new lords of local government. Nothing better symbolised the way that much of this new money was spent than the fact, noted by the King's Fund a year or two after the start of the spree, that the number of managers in the National Health Service had risen by 66 per cent – much faster than the numbers of new doctors and nurses. And now we begin to see the consequences. As public spending rises this year to £661 billion, more than a quarter of it is having to be borrowed, giving us a larger public sector deficit than Greece, the country having to be bailed out by the IMF. The overspend is so colossal that the Government itself predicts that in just four years' time our national debt will have doubled, to £1.4 trillion – equal to our present annual national output. And if our international credit rating is downgraded, as seems very possible, we will have to pay even more to borrow the money. According to the Institute for Fiscal Studies, we may soon be shelling out some £74 billion a year – £60 a week from every household in the land – not to reduce our debt, but simply to pay the interest. The chief reason for this was reflected in last week's revelation that the public sector has become so grotesquely swollen by Mr Brown's 10-year spending spree that it accounts for 52 per cent of our economy, up from 36 per cent in just a decade. This leaves the other 48 per cent to foot a barely imaginable bill, still hurtling up with every week that passes – at a time when the private sector is steadily shrinking with each new tax and regulation laid upon it. Our manufacturing sector has already declined in the 12 years since Labour came to power from 20 per cent of our economy to 11 per cent. Our biggest remaining earner, the City, is now threatened still further by the EU's seizing of the power to clamp down on financial services – assisted by the Lisbon treaty that Mr Blair and Mr Brown were happy to sign up to. The weirdest thing of all, as we step out from the cliff edge over 5,000 feet of nothingness, is that neither of the parties competing for power at this election seems to have the slightest idea what to do about it. The last thing either is prepared to do is to consider taking an axe to that bloated public sector created on a flood of imaginary money. Like rabbits in headlights, they wait paralysed for the crunch that must inevitably come. And all this was set in train by that fateful day in 1998 when the hubristic Mr Brown, puffed up by the renaissance in Britain's economy that he owed to the Thatcher years, announced that he was going to abandon those financial constraints he had likewise inherited and float off into the stratosphere. At least when Icarus plunged to destruction in the sea, he didn't take a whole country with him. http://www.telegraph.co.uk/comment/7530947/The-day-Gordon-Brown-settled-our-fate.htmlThe day Gordon Brown settled our fate
July 14, 1998 was the day Gordon Brown turned from Iron Chancellor to misguided Santa Claus
Monday, 29 March 2010
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