SOON AFTER THE landslide election victory of New Labour it became clear that Tony Blair and Gordon Brown thought unbelievably and arrogantly, and indeed bluntly declared, that the interests of the British people and New Labour were synonymous. As a consequence they could justify anything that would sustain their majority in Parliament and ensure their re-election and believe it was in the best interests of Britain.
The toxic combination of moral blindness, contempt for our institutions and evolved constitutional practices, utter incompetence and perhaps, above all, total disregard for the fundamental laws of economics, made it certain that nothing could avert an unprecedented economic catastrophe for the country they so cruelly misled.
Labour incited profligate financial behaviour by recklessly printing money far beyond the level merited by any productivity improvement and did this at an ever increasing rate, year after year. They promised that things could only get better with New Labour, and turned on the spending and lending taps. They shifted, fiddled with and falsified all their own targets, especially with respect to cyclical spending and investment, encouraged people who could not afford to buy houses to borrow money to buy houses, incentivised people to borrow against unprecedented multiples of self-assessed joint incomes and passively watched them misuse such excessive mortgage borrowings for current expenditure.
Brown promised an end to boom and bust, but the fact remained that the only way to honour that pledge of perpetual growth and stability was through an everlasting bust economy. Unbelievably, Labour, the so called people’s party that so vilified Margaret Thatcher by claiming falsely that she had destroyed British manufacturing went on to do precisely that. Labour Government profligacy led to inappropriate real interest rates that sustained an artificially high value for the Pound. This inanity helped to undermine British industry, saw its prized assets sold off cheaply and flooded the country with artificially cheap foreign goods, enriching importers and retailers and rentiers, and of course New Labour’s merchant banking pals, funders and future employers.
Raids on pension funds, crippling airwave auctions and similar opportunistic despoiling acts were selling off assets in a counterproductive and pointless way that was simply stunning given their criticism of Thatcher’s privatisation of inefficient state owned industries. She increased more or less everything in real terms by 50% from take home pay to National Health spending and the size of our economy while maintaining manufacturing’s share of GNP. She addressed over-manning and the criminal and thuggish abuse of Trade Union powers which had laid our country low.
Yet the people who vilified Mrs. Thatcher, over their three terms of Labour governments, managed to reduce the size of our economy, reduce our real standard of living, and half the size of our manufacturing sector as a percentage of GDP, and bury us all in debt. By setting the Bank of England free; as free to roam as a train between the inflation figure rails he set, and making interest rates the Bank’s sole economic control lever, the Chancellor committed us all to drive like passengers trapped in an increasingly out of control vehicle with only one control – the accelerator. We had no steering and no brakes. Interest rates would be used to control inflation, ignoring the ever increasing money supply. The harsh reality was that interest rates were set by an inflation figure that was an average and while the cost of manufactured goods collapsed as the Pound soared and as we imported more and more cheap substitute Chinese products, this seemingly moderate average value for inflation helped to conceal the fact that service sector inflation soon ran up to beyond 12% per annum.
When simple folk like me criticised all this we were ridiculed or reviled. A column I wrote for one of our national newspapers was pulled because my criticisms of Chancellor Gordon Brown and his policies, and my predictions about their effects were considered utterly over the top. The idea that a delusional fantasy that involved buying prosperity with money borrowed from our future would lead to ruin was simply disregarded. Now we are told that few if anyone could have foreseen the consequences of New Labour’s irresponsible avarice and ignorance. However, I was not the only one to see trouble ahead, but people like me, manufacturers and others who valued the prudence that Gordon Brown had misleadingly promised while he debased every aspect of our country, constitution, economy and indeed our Union, were also all caught up in the feeding frenzy that New Labour created. No-one could escape the constant propaganda telling us how wonderful our great leader, the ineffectual Tony Blair was, and how wicked were his detractors. Conservatives and others were vilified constantly for expressing support for the past practices and policies that had built and sustained our freedoms and prosperity.
All this arrant nonsense was supported by loose money, and unsecured credit that led to Government debts in excess of five times our GDP, and by the BBC and in their view expressed the settled will of the British people. The BBC became quite simply a propaganda organ of the Labour Party that vilified its opponents at every opportunity. Almost every BBC news broadcast was led with the words “The Prime Minister, Tony Blair and latterly the Prime Minister, Gordon Brown.......” Any references to the Tory Party were rendered in comical terms. Clever decent people who led that party were vilified and characterised as buffoons. The impact of all this was that the Tories sought a leader that could match the blow-dried hair appeal of Tony Blair, and its consequence was the selection of David Cameron, and his sidekick, George Osborne, to the pivotal leadership positions in the party. To win power, they believed they had to outdo New Labour. They had to “detox” the Tory brand. They were going to accelerate our economic progress and so to beat New Labour would promise even more prosperity under their Tory stewardship. They were going to share the proceeds of growth. That meant keep on wasting hard earned and borrowed money to buy votes! They promised all this even as the storm clouds were clearly visible and the thunder and lightning had begun.
Commentators who ridiculed this flawed and immoral notion, when we were facing an economic catastrophe and had become arguably the most indebted country ever in history, were dispensed with by their publishers. They disappeared from the comment pages of our leading newspapers, consigned to exile or oblivion for not toeing the party line and for scaring the horses.
I heard George Osborne speak in Glasgow some time before the last election and met him afterwards. He was not very friendly towards me because I had the audacity to ask him a question that he did not like. Having heard him pontificate about sharing the proceeds of growth and so on, I asked him how he was going to deal with the greatest peace time calamity to hit Britain since the Black Death; the sick bankrupt economy which he was going to inherit if the Tories won the election. He took visible umbrage at my question and stated baldly that it was absurd to suggest that the country was in such dire circumstances, that nothing was as remotely as bad as I was suggesting and that we all had a rosy future if the Tories were elected. I also noted when another business person asked him if he was going to change the employment protection legislation that has blighted the relationships and prospects of countless small businesses and honest employees, that he countered this by saying that all the best companies that he visited in Britain had standards of employment terms above and beyond the minimum and that employment protection legislation should not be relaxed. In fact, he might even seemed to have implied the opposite. All this I assumed at the time was part of the new caring image being projected to detoxify the brand but it was clear, especially in retrospect, that he had no understanding of the issue or sympathy with the questioner.
Big companies can afford a greater regulatory burden than small ones. Employment protection is always counterproductive. It encourages temporary contracts and outsourcing. It strips companies of real skills and talents, destroys businesses, creates a disincentive to employment, imposes punitive costs on small companies, poisons workplace relationships and rewards fraudsters and charlatans and connivers and their lawyers at the expense of honest employees and their employers. Sound bite policies which one hoped would end with the election of an alternative to New Labour, were clearly still in situ and the prospect of much improvement became dimmer and dimmer.
It is no wonder that the Tories didn’t win a clear victory, not just because Cameron was ineffectual and that Clegg appealed to the British inclination to fudge every decision with his infantile arguments and short-lived boyish appeal during the television debates that contrived to ignore the economic elephant in the room. The prospect of more Gordon Brown was unthinkable by that time and so the post election decision to form a coalition government no matter how misguided it was, seemed to offer some salvation from a catastrophic result for Britain and our future. We all waited, after the PR love story and the initial coalition honeymoon and extravagant promises, for the essential big, strong, painful medicine that was required to save the country, address our escalating and unserviceable private, corporate and government debt, an impending employment collapse and industrial strife and perhaps even worse.
At the very least, one would have hoped that benefits would have been cut across the board by at least 10%, that eligibility for most benefits would have been restricted to those who had lived here and worked for some time and that some would only come into play after a period of unemployment and only last for a year for so,as happens elsewhere in socialist Europe. One would have expected the retirement age to be increased with immediate effect to sixty seven and a half, for Government and Local Authority pensions to be drastically cut on a sliding scale and that local authority wages would be similarly cut up to as much as 50% for the very highest paid employees with a pension limit being set in line with the private sector norm and with indexation linked to national productivity and with public sector salaries frozen or capped until the deficit was removed.
We would have also expected all government departments to take an immediate budget cut of at least ten per cent and that foreign aid expenditure would be terminated other than if it involved the purchase of British manufactured goods or supported direct investment of British manufacturing in underdeveloped countries both to help us and to help them. One would have hoped that quangos would be eliminated, that there would have been a genuine bonfire of regulations with employment protection law abolished or with significant changes. These should have included charges made on claimants, the abolition of no win, no fee claims and subsidies to lawyers with a cap put upon the size of any claim award equivalent to no more than the redundancy pay that would have been applicable and that all redundancy payments, including those in the public sector, would also be restricted to the statutory minimum.
All these tough measures should have been accompanied with a radical reform of corporate and personal taxation, but none of this occurred.
Instead George Osborne gleefully announced that his programme of spending cuts meant that he was spending even more than even Gordon Brown and Alistair Darling envisaged, and the rest is history. A failure to grasp the metal, to live up to their responsibilities and absurd promises and the terminal impact of the Liberal veto, has consigned our country to a dreadful prospect. Yet Miliband and Balls barefacedly now deny their and their party’s responsibility for creating this nightmare. They cry from the sidelines without any embarrassment that the government should be borrowing and spending even more to avoid the consequences of their excess borrowing.
The economists who ignored the gathering clouds, who sought to explain the genius of Gordon Brown’s new economics, who could never fail to see and applaud the emperor’s new clothes, are now shifting their position, arguing with simulated Keynesian credentials that when the facts change, they change. However, the facts have not changed, other than to get worse, and these facts have been constant for over three parliamentary terms. While we have to say that economics has long been described as the dismal science, such dismal buffoonery could never have been envisaged. Dismal is far too kind a description for the failure of Britain’s Left which has dominated academia, the media and politics for a few generations and has cast doubts over our ability to survive as a civilised society, let alone recover. The Left now apparently includes much of the Tory Party leadership.
Without our excessively generous and indiscriminate welfare system we would not have millions of unemployables. We would not have attracted cynical lazy opportunists from all over the world. New Labour set out to attract prospective Labour voters who sometimes even despise our country and our values and hate our beliefs and institutions, and for the same reason to encourage illegal immigration and the unskilled and backward to immigrate or claim asylum. Indeed many such incomers openly revile democracy and yet live at public expense in luxury, sometimes in central London townhouses catered for by a vast army of non-productive wealth destroying carers and social workers ministering to their every need, with in some instances, ten or twenty social workers per family and tax free incomes of as much as five times the average wage.
This madness cannot continue, so it will not, but the consequences and upheaval of the collapse we face cannot be pleasant and the outcome might be very unwelcome. The price we have paid and will pay for Labour gerrymandering our politics and corrupting our political system and even undermining the integrity of the ballot box and debasing constituency representation is vast.
The coalition shows no desire to face these issues. Indeed the Liberal Democrats are intent on making things worse in an attempt to save their own skins. All this has led to ever more demented Lib Dem proposals that would do even worse damage. The uninformed, misinformed, political naïve collectivists who got us into this mess and who refused to pay attention to or try to understand cautionary warnings and historical precedents are all still in denial about the consequences of their greed and their selfishness and instead try to scapegoat those who opposed their corrupt self-serving insanity.
He who the gods wish to destroy, they first make mad, and the madness of Blair and of Brown, it seems, is infectious and terminal.