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Britain isn't ruined

Ed Bowsher
by Lovemoney Staff Ed Bowsher on 24 December 2009  |  Comments 7 comments

One lovemoney.com user thinks Britain is ‘ruined.’ I strongly disagree. The UK still has many strong points.

I wrote a blog about bank charges on Monday that sparked a flurry of comments on several issues. But there was one comment that really stood out for me: 

"it was not the banks that ruined the country it was 12 years of blair / brown squandering our money and wasting every penny of it ( no improvement in education or health service , or anything else come to that)  , and of brown encouranging the banks to undertake reckless lending and changing the law to ensure that they did." 

I've read similar comments before, so it didn't surprise me. There's a lot of depressed people out there, and a lot of very angry ones too. And they all seem to blame Gordon Brown. 

Thing is, they're wrong.                     

For starters, the country isn't 'ruined.' The economy has had a very tough year, but there are still plenty of people out there with good jobs and pleasant lifestyles. I'm definitely in that camp. I live in one of the world's greatest cities, I do a job that I enjoy, and I have fun. I see plays, go out to restaurants and bars, I have nice holidays. And yes, I manage that even though Gordon Brown has put up taxes! 

What's more, I haven't been the victim of crime since 1993, and I've had some good experiences with the NHS. (Not universally good, admittedly, but some good experiences. I've seen an improvement since 1997.) 

Now I admit that I earn more than the average UK salary and I don't have any children, which gives me more disposable income than many folk. But still, when I look around the lovemoney.com office, I see plenty of people who are leading happy lives. And it's the same story when I look at my neighbours and friends. 

Think how many British people live in warm comfortable homes, have two cars, and go on at least one good holiday a year. This country isn't ruined! 

Who caused the economic crisis? 

Now, yes, we've been through a very serious financial crisis and I suspect economic growth will be pretty anaemic over the next few years. What's more, the government's finances are in rotten shape. 

But that isn't all Gordon Brown's fault. His big mistake was to increase spending by too much from 2002 onwards. That made it harder for the UK to cope with the crisis and its after-effects. But government over-spending isn't the sole reason we're in this mess. And overspending certainly didn't cause the collapse of Lehmans, Northern Rock and AIG. 

I can understand why many people are angry. I can understand why they want to find someone to blame. But let's get real. Britain isn't ruined. And Gordon Brown isn't some monster who single-handedly caused the biggest financial crisis in 70 years.

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Comments (7)

  • Mike10613
    Love rating 414
    Mike10613 said

    It's not ruined, we haven't tried selling snow to Dubai yet! 

    Report on 06 January 2010  |  Love thisLove  0 loves
  • Ed Bowsher
    Love rating 76
    Ed Bowsher said

    Hi all,

    Let's look at the original quote I was commenting on:

    "it was not the banks that ruined the country it was 12 years of blair / brown squandering our money and wasting every penny of it ( no improvement in education or health service , or anything else come to that) , and of brown encouranging the banks to undertake reckless lending and changing the law to ensure that they did." 

    I believe that much of the above comment is wrong.

    a) the country isn't ruined

    b) Many banks (in the UK and elsewhere) played a very significant role in causing the financial crisis

    c) Yes, Blair/Brown spent too much from 2002 onwards. That's made it harder for us to cope with the crisis. It was a big mistake. But it's not the sole cause of the mess we're in. Far from it.

    Moving on to Landofconfusion's post:

    Yes, there have always been prosperous people in previous recessions. But that just backs up my point that the country isn't ruined.

    I also agree that taxes will inevitably go up in the next couple of years. And public spending will be cut. I've said that for ages. Doesn't mean that Gordon Brown is the sole cause of the mess we're in.

    You mention Canada: you're right, that country has suffered a lot less than us. That's partly due to stronger public finances. It's also due to the fact that the Canadian economy is less tilted towards the financial services sector.

    spending from 2002: that was partly a response to the 2001 slowdown. But it was also driven by a political desire to push up spending on the NHS and other areas. We're both agreed that it was a mistake. He was wrong to do that.

    No, experts seem to agree that those actions in fact caused the crisis.

    Well, different experts have different views. I think most pundits would agree that banks' use of derivatives and so forth were a major factor in causing this crisis.

    You're also conflating spending and interest rates. They're seperate issues. I agree that interest rates were too low for much of the noughties. Many experts say that now. Those low interest rates - here and elsewhere - were a cause of the crisis.  But let's not forget that Gordon Brown didn't set those interest rates, the Bank of England did. (He did grant independence to the BoE in '97 admittedly.)

    Of course, it wasn't just low interest rates in the UK that caused the global crisis. It was low interest rates in the US. Nothing to do with Gordon Brown.

    I don't accept that government overspending - here or in the US - was a major cause of the 2008 crisis. But it has made it much more difficult for the US and UK to deal with the crisis. And it's a big factor in the anaemic recovery that we face over the next few years. So we agree on a lot.

    Ed

    Report on 07 January 2010  |  Love thisLove  1 love

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