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February 26, 2013 - Bill Esterson's Westminster Diary

Bill Esterson



Since the general election, many people in the media have happily repeated the line that the financial crisis was caused by the last government. And of course it suits the coalition government to keep saying that they inherited a mess. 

The truth is rather different. Labour's economic record is in fact strong. 

Despite the Tories' success in putting over the Laurel and Hardy mantra "this is another fine mess you've left us in", Labour delivered unprecedented UK growth between 1997 and 2008. 

In 2008 the financial tsunami that hit our shores was due to the earthquake of US sub-prime debt and it was the Labour government and more especially Gordon Brown who worked with the American President Barrack Obama. They agreed the fiscal stimulus and bailed out the banks. 

This transformed an imminent world depression into a mild recession with Britain even enjoying fragile growth by the 2010 election. Yes, we had a deficit, two-thirds caused by the bankers and one-third from the government pump-priming growth, but that was the price of avoiding a depression. The alternative would have been far far worse and the banking system would have collapsed which would threatened the survival of our society and our ability to buy basic items including food and fuel.

But the Conservatives and Lib Dems won't let the facts obscure the Tory fictional bestseller that has given them a historic opportunity to reduce the state on the pretext of "clearing up Labour's mess". 

Their first move – to announce half a million public sector job cuts in the 2010 budget – backfired with millions of public sector workers spending less and saving more hitting consumer demand, tax revenues and deficit levels. As workers lose full-time jobs and take on part-time work, the number of jobs goes up but economic output hasn't.

That's why we are in a recession for the third time in five years and it's why the deficit is going up not down. The cuts by the coalition government have meant no growth and few if any full time or well paid jobs.

So next time you hear a Tory or Lib Dem talk about "Labour's mess", remember that Labour's record in government was much better than they claim as we were on the road to recovery by the time of the last election after a crisis which was created thousands of miles away.

Remember too that the recovery was stopped dead in its tracks by this coalition government supported by Tory and Lib Dem MPs alike.

And remember that government policies now are making matters far worse by stifling growth and prosperity for the many while giving tax cuts for  the wealthiest few.

 

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