Slartibartfast
Senior Member
- Reaction score
- 2
I shouldn't have said Brown caused the recession; we were still riding the last few puffs of his/our decade-long debt binge. But it's this profligacy during the 'good times' (and addiction to 'big' government) that left us in such a weak position to counter the downturn - and guaranteed that post-recession Britain will be saddled with a truly awesome level of Govt. debt - moving swiftly towards 100% of GDP, and higher still once you factor in his off-balance sheet PFI dealings & the unfunded public sector pension liabilities.somone uk said:
It wasn't all bad from Brown's tenure: the creation of an independent BoE saved us from a re-run of late-eighties Tory insanity - cutting interest rates (& taxes) as inflation & housing pushed higher - which culminated in our joining ERM, making a bad situation even worse.
On the plus side, the Tories (before & after the '90s recession) implemented an array of policies which transformed the flexibility & competitiveness of UK Plc; and many would argue those acts helped underpin the period of strong, low-inflationary growth which came from '93 onwards, and that much of this advantage has since been eroded by Labour.
Pre-recession, financial services (a broad category) accounted for 9 - 9.5 per cent of GDP, compared with 13 -14 per cent for manufacturing. I'm with you on not expecting a 'springy' recovery: public-sector retrenchment, subdued wage growth, household indebtedness, a toppy housing market, and interest rates that can only go one way all make a strong, consumer-led recovery (a la the early nineties) less likely.somone uk said:
The number of economically inactive is at a record level; and I'm not convinced we've yet seen the peak on the ILO measure. Time will tell. That said, an extra 350,000 on the Govt. payroll, more mature students, and a welcome tendency for business to retain staff on reduced pay rather than sack them, have all helped keep the total down. Also, we seem to have avoided the retail sector meltdown of the 90s; credit to the BoE's savage rate cuts saving the housing market from total collapse and leaving the millions of variable-rate mortgage holders far better off.somone uk said:
I'm not sure why you slipped in the 'fiscally conservative' dig, as if to imply that adherence to this ideology sparked the '90 - '92 recession, there was nothing remotely fiscally conservative about what was behind the late-eighties Lawson boom.
Actually, the last thing we need is a gilt's strike (and the high interest rates/currency instability that accompany it) brought on by excessive Govt. debt. We can't just assume that there will be willing purchasers - at least not at today's low (4% ish) yield - if there isn't a credible plan/timescale to reduce the deficit.somone uk said:
Given the lag between announced cuts and implementation at a departmental level, I think the post-election Govt. should get started as soon as - wage cuts across (most of) the public sector. Personally I'd use initial savings to cut employer NI contributions, try to get the private sector hiring again.
Some more reading in re our debt: http://www.telegraph.co.uk/finance/comm ... -room.html
Slarti
