08 June 2009
It's time for blame to be given where it's due. I'm fed up with hearing the spin that "Gordon's done a great job for Britain." Gordon Brown has messed up almost everything he's touched.
On the credit side, he freed the Bank of England in May 1997 to set interest rates. Sadly, quite soon after, in June 1998, he screwed up banking supervision, and that is the root cause of the current financial crisis. The Bank was, at the time, a world-renowned centre of excellence for banking supervision. Famously, a 'raised eyebrow' was all that was needed when supervisors wanted a change made. This was replaced by a rules-based supervisory regime under the Financial Services Authority which had power to penalise and set rules, but lacked the reputation and clout that had enabled the Bank to keep a tight rein. Whenever there's a published set of rules, clever people will find ways to push the envelope - which is what's happened in spades in the sub-prime loans scandal and Credit Default Swaps debacle.
He's also messed up the UK pension system. Our defined benefits system was the best in the world before he and his mate Ed Balls got their dirty fingers into it. They axed the dividend tax credit in 1997. Very few private sector organisations can now afford to offer defined benefits pensions - thanks largely to Brown's pension grab which in March 2007 was already estimated to have taken more than £100 billion out of private sector pensions (Daily Telegraph article).
Finally, he's saddled us with unaffordable obligations that won't go away. Public sector spending has been a diarrhea of give-aways to anyone whose acquiescence needed to be bought, much of it funded by present or future borrowing. Rather than work out a cost-benefit analysis for new initiatives, money has been sprayed into wild ideas that have been more to do with popularity or grabbing headlines than solving the needs of the country. Many Government IT projects have been a complete shambles. Pay settlements have been much more generous than those available to most private sector workers. MPs and many other public sector have defined-benefit pensions, on massively generous terms, that they will go on collecting for the next forty or fifty years.
We'll be paying for Brown for two generations. Brown did a great job for Brown.