Dog Days of New Labour

The Government is trapped in the middle of a sharp divergence between the economic and political cycles. We are heading for the rocks but, with a general election looming, Gordon Brown wants to delay the inevitable cut-backs in favour of one last, desperate burst of vote-grabbing profligacy. However, our annual deficit is now so huge, we risk being the first G10 country to suffer a crisis of investor confidence, with a flight of domestic capital, a collapse in the value of sterling, and an exodus from government bonds. We need a route-map to viability demonstrating in detail how we are going to live within our means and reverse the PM’s monstrous public spending. After all, his employment “miracle” was little more than an explosion of pretendy state jobs. After a decade of his micro-meddling, we are left with an industrial base in which manufacturing has declined more rapidly than it did under Margaret Thatcher. In 1997, it accounted for one fifth of British output; today even that has been halved. Meanwhile, poverty is more widespread as it was 10 years ago. The number of very poor families in the UK is now 6 million while a further 14 million people live in low-income households. Contrary to his assertion that all our problems were caused by the global situation, it is clear that poverty, unemployment and home repossessions began increasing in 2004, long before the sub-prime mortgage implosion.

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