When discussing the economy (and even when not discussing the economy) our political opponents continually refer to “Labour’s legacy” and “The mess we inherited from Labour”. They are briefed to repeat one or both of these phrases at every opportunity. The Con/Dem Government uses these mantras to excuse itself for its inability to deal effectively with the debt, which is still rising, and blame Labour. They are clearly using the Joseph Goebbels approach to propaganda; “If you tell a lie big enough and keep repeating it, people will eventually come to believe it”
http://www.huffingtonpost.co.uk/ramesh-patel/growth-cameron-austerity_b_2007552.html
The enormous debts and budget deficit was caused by the financial crisis, i.e. the banks, not by the Labour Government. Data from the OECD, IFS, ONS and OBR Supports this. Public sector net debt, net borrowing, and the budget deficit were all lower in 2007, i.e. prior to the financial crisis, than Labour inherited in 1997. The structural deficit did increase very slightly. No one suggested that the economy was in a mess in 1997.
| Year | 1996-97 | 2007-08 |
|---|---|---|
| Public sector net debt % | 42.5 | 36.5 |
| Public sector net borrowing % | 3.4 | 2.4 |
| Budget deficit % | 3.9 | 2.1 |
| Structural deficit % | 2.2 | 2.5 |
Massive amounts of public money were used to prevent the collapse of the banking system. That is why by 2010 the debt had risen to 85.6% and continued to rise to 105.2% in 2012.
Interestingly, writing in the Spectator (21 November 2013) Fraser Nelson, a Conservative Party supporter, agrees with Labour that, without adjusting for inflation, George Osborne has borrowed more in under four years (£417 billion) than Labour borrowed in thirteen (£407 billion). He asks the question “is this recovery real or another debt-fuelled illusion?” His answer “the annoying truth is that we just don’t know”.
The Labour Party is proud of what we achieved in Government, spending for the future of our country on new and updated hospitals and schools many of which were in very poor condition prior to 1997. Right now we really need much more investment in house building to stimulate the economy. This would create jobs; reduce spending on unemployment and make houses affordable for people trying to buy their own house.
Instead of cutting taxes for millionaires the Government should not be making the lives of the poorest miserable by savagely cutting benefits and instituting the vicious and iniquitous “bedroom tax”. Poor people will spend any additional income, giving a boost to the economy; the rich will just save it.
The quickest way to reduce the budget deficit and the debt is to grow the economy. Labour was doing this in 2010 when they left office. The temporary cut in VAT stimulated the economy. The Tories Increased VAT which choked off the recovery. Tory cuts and lack of investment have prolonged the time taken to get the economy back on track.