Amid dismal economic conditions, Alistair darling delivered his first budget as Chancellor of the Exchequer, dealing with a dire legacy inherited from Gordon Brown. Ten years of fiddling and meddling by Gordon Brown has resulted in an economy that has the largest budget deficit in Western Europe.
A high tax rate and a fiendishly complicated tax and regulatory regime are, according to the World Economic Forum, the two most negative factors for UK competitiveness. The institutions that underpin banking oversight have, as a result of the poor structure of Gordon Brown's Financial Services and Markets Act 2000, failed to deal with the Northern Rock disaster and have undermined confidence in the UK as a financial centre. And since 1996, 19 OECD countries reduced the budget deficits by more than the UK.
Mark Garnier, speaking not only as Wyre Forest's Conservative Parliamentary Spokesman, but also as an investment banker with over 20 year's experience, comments:
"For years we have been told about 'prudence'. Now we are to be lectured about 'stability'. The dismal truth is that Gordon Brown was never prudent. IN the good years, he spent more than should have and not once put money aside for an economic downturn. We have had ten years of growth financed by vast public spending; a consumer boom financed by credit cards and second mortgages; and a buoyant financial services sector making up for a declining manufacturing sector. But with financial services virtually paralysed by the credit crunch, personal debt at jaw-dropping levels and public sector borrowing rising faster than expected, the Emperor's new clothes have been exposed.
"This year's budget was the seventh in a row where we have been told that the Treasury have underestimated their borrowing requirement. So as we go, in all eventuality, into (at best) a very difficult economic period or (at worse) a recession or even a depression, we are being told that borrowing must go up and that we have no reserves. And this doesn't begin to address off balance sheet borrowing with PPI and PFI financing arrangements through the private sector for public services!
"Darling has just three options, and they are not good. As the economy inevitably slows down he must either raise taxes, increase borrowing, or cut spending. None of these options are what we should be doing at this stage of the economic cycle. So now it seems that what we have all been suspecting for years to be the case is now being proved.
"But here is one further dismal fact that is not spoken about enough. For those who decided a decade ago that they wanted to save their money rather than blow it in Gordon Brown's spend-fest, the return for prudence has been.......... Absolutely nothing! The UK stock market has not moved since 1998. PEPs, ISAs, pensions - anything you like - that have been invested in the UK stock market for the last ten years are worth no more than they were a decade ago. Thank you Gordon."