The economic consequences of Mr Brown

Gordon Brown might be overstating his case when he ignores his Thatcherite inheritance and a benign global economic environment, and takes sole credit for Britain’s rather good economic performance during his tenure at No. 11. But, asked whether they are better off now than a decade ago, most Britons would have to agree that in material terms their lives have improved during Brown’s tenure at the Treasury, and that his decisions to keep Britain out of the euro and to grant a sort of independence to the Bank of England (Brown still selects the Bank’s inflation target, and decides whether the Governor is to be reappointed or let out to pasture) were good policies indeed.

And the Prime Minister’s critics might be overstating their own case when they claim that Brown’s policies have led us to the brink of a collapse of the financial system, but they are certainly right that we are entering a period of financial strain and slower economic growth with the nation’s finances in worrying condition, and have a reasonable argument that at least some of today’s problems are the consequences of the tax, spending and borrowing policies pursued by the Prime Minister when at the Treasury.

There is no denying that ten years of New Labour’s economic management are now severely limiting policymakers’ freedom of action. It is interesting in this regard to compare the tax-and-spend policies of Gordon Brown with those of George W. Bush, who is contemplating the fiscal stimulus that is beyond Brown’s reach. Both launched spending sprees to support their visions of an expanded welfare state, Brown concentrating on the NHS, Bush on prescription drugs for all elderly folks. Britain’s chancellor attempted to fund his spending spree by launching a series of tax-raising measures; America’s President cut taxes, in the belief that the incentive of greater rewards for work and risk-taking would increase the US Treasury’s take.