The buoyant economy New Labour inherited from the Tories in 1997 gave it and the country seven ‘fat years’. Instead of prudently managing national resources during this period by cutting public debt and addressing long-term infra-structural problems in housing and pensions, New Labour went on a public spending-spree. Billions were poured by the government into countless pet schemes to end ‘social exclusion’, increase social equality, and generally improve standards in public services.
The Chancellor proudly boasted of his fiscal prudence and ability to outguess the IMF on what national growth would be. The economy was safe in his hands, he smugly reassured doubters on several occasions, and the country, or at least those employed in or maintained by the public sector from whence comes New Labour’s core electoral support, never had it so good with the result there have been three successive electoral victories for New Labour.
But now the worm has turned, ,and, as with all cases of over-indulgence, the price will be for the revelry a nasty hang-over the following morning. Today’s Times reports that, with lower economic growth forecast for from the IMF whose accuracy the Chancellor looks as if he will be obliged to accept this time, the Exchequer faces a coming crunch when it will be forced to decide between raising taxes or decreasing public spending. This is a Hobson’s choice that is going to discomfort the government as it well as its core supporters whichever option it take. As Patience Wheatcroft remarks in her column in today’s Times, ‘the party’s over’.
And what has the country had to show for this massive spending spree?
Very little.
Recently published statistics from the ONS show the government has, in the last eight years, failed signally to meet its cherished target of reducing social inequality. Likewise, as reported in today's Times, figures recently revealed by the Higher Education Funding Council and the Department for Education show it has been no more successful in its much vaunted campaign to increase the participation rate in higher education of state sector pupils, which has gone into decline and which annually wastes half a billion pounds from the high drop out rate it has manufactured, or to reduce truancy rates which, despite a massive £$1 billion being sunk into this venture, have risen by a staggering 43% since 1997. Meanwhile, it is reported , again in the Times today, that the country faces a massive shortage of housing stock created by the unwillingness of successive government’s, but of none more so than the present one, to relax planning controls.
Truly, the country is in a mess. The only consolation for those who would like to see some kind of retribution visited on those primarily responsible for it is that, through his lack of progress in solving the present budgetary crisis of the EU during his current Presidency of it, the Prime Minister’s stock there has fallen to an all-time low, probably scuppering forever his chances of being able to forge out a future career for himself there, as used to widely thought he had his sights on, after stepping down from the Premiership to make way for the Chancellor. The deserved penalty the latter will have to suffer is surely stepping into predecessor’s shoes just as they are starting to pinch. He shall surely inherit the wind, just as we all certainly shall as a result of his government’s profligacy.