Prudence defines careful management and it is something Labour celebrate.
Gordon Brown said today, “This is one of the most difficult years for the world economy. There’s absolutely no doubt, no doubt about it. We’ve seen a credit crunch. It obviously started in the United States of America.” Not Labour’s fault, but America’s. Let us understand who is architect of the current situation.
Between 1999 and 2002 Chancellor Gordon Brown sold off 395 tonnes of Britain’s gold reserves at rock-bottom prices and only made £1.88 billion ($3.48 billion). Britians finds itself in the current situation because Gordon not only sold our gold reserve, but also depressed the price. he flooded the market and sold it in 25 tonne batches, and in a depressed market aprice and lost £495 million. We now have only 296 tonnes of gold left, losing UK PLC £4 billion in the process
In his pre-budget report in October 2007 last year, chancellor Alistair Darling said “borrowing for the current fiscal year was likely to be 38 billion pounds — four billion higher than forecast in March.” This figure does not include the £26 billion loaned to Northern Rock. Financial forecasters say the government will struggle to meet its own revised targets.
The government’s fiscal framework revolves around two key rules devised a decade ago by Brown when he was Chancellor. The “golden rule” states the government can borrow only to invest over the economic cycle while the “sustainable investment rule” limits public sector net debt to 40 percent of gross domestic product.
We have lower rates of interest but they have been offset by higher rates of indirect and direct tax. This has caused people of Britain to have the lowest disposable income in a decade While the average household gross income has climbed over the past decade from £34,796 to £53,835, people have far less of that money to spend each month after they have paid essential bills. In 1997, when Labour came to power, people were left with 34.5 per cent of their gross income once they had paid taxes, national insurance, mortgage or rent. Now we left with 32.6 per cent. These essentials will continue to rise in 2008, 2009, 2010 with Labour’s progressive tax policy.
Slowly Labour spin and lack of substance come back to haunt them and it will the ordinary man and woman in the street who will suffer. But don’t expect Labour to take responsiblity for their bad management.
Tags: "Gordon Brown, Alistair Darling, Budget, Economy, Forcast", Gold, Golden Rules, Prudence
