Gordon Brown had a decade as Chancellor and jumped ship before things got difficult. But Labour’s record on the economy is bad. Despite fifteen years of economic growth Britain has the largest budget deficit in Western Europe and Gordon Brown has failed to prepare the UK for any global economic instability we may encounter.
Despite fifteen years of economic growth, Gordon Brown has massively increased borrowing. In the past five years Gordon Brown has borrowed £100 billion more than planned. The current budget has not been in surplus since 2001/02. This year’s borrowing forecast has increased by at least £8 billion in the last 20 months. In March 2006 Gordon Brown claimed he would have to borrow £30 billion in 2007-08; in March 2007 he upped this figure to £35 billion, and in October 2007 Alistair Darling upped the estimate again to £38 billion. The IFS estimates that if current spending trends continue borrowing will rise to £41 billion.
The ‘golden rule’ (that the Government should only borrow to invest, and not to fund current spending, over an economic cycle) would have been missed by almost £4 billion without the convenient decision in summer 2005 to add two years to the beginning of the economic cycle.
In 1997 the retail price index showed inflation at 2.6%, last year it was at 4.0%. Inflation is higher under Labour. Earnings are also falling. Consumer debt is also rising in March 1997 total household debt was under £500bn now it is nearly £1,400bn – that £1.4 trillion! Under Labour, lending has been rising at a rate of over 10 per cent per annum, making the debt mountain now greater than Britain’s total gross domestic product. We are all feeling the pinch in our pocket at the supermarket checkout or at the petrol pump.
During his ten years as Chancellor, Gordon Brown introduced 111 tax rises, including the abolition of tax credits on pension funds’ dividends and increases in stamp duty. Gordon Brown also burdened the UK with the longest national tax code in the world. His 2007 Budget took the UK’s tax code to just short of 10,000 pages, surpassing India, which previously held the record with just over 9,000 pages of tax legislation.
According to independent experts, taxes have risen by £5,400 since 1997 for every family in the UK after allowing for inflation and the poorest fifth of households pay a higher proportion of their income in taxes than any other group – under a Labour Government!
Under Gordon Brown chancellorship, ‘green taxation’ has fallen from 9.4 per cent of total tax receipts in 1997 to 7.3 per cent in 2006 – which is why today Alistair Darling will be presenting his so called ‘green budget’.
But it’s not just hardworking families – high tax rates are the ‘most problematic factors for doing business’ in the UK according to the World Economic Forum.
I, like my party, will not promise up-front, unfunded tax reductions. Our commitment to sound money means that we will always put the stability before promises of tax cuts. That's why I am so concerned about the way the Market Rasen Pool project is being handled - £4.1m to build a £4.7m pool which will run at a £250,000 deficit each year that will be picked up by council tax payers in Nettleham who are unlikely to use it.
We need to build a sustainable, low-tax economy. Therefore, as the economy grows, and increased revenue flows into the Exchequer, the Conservative Party will share the proceeds of that growth between increased spending on public services and reduced borrowing or lower taxes.