I'll be returning to the emerging true nature of Tuesday's Budget shortly - in the meantime I'm indebted to my friends at Liberal Demolition for this timely corrective on the record of the outgoing Labour Government.
Today George Osborne claimed that “having inherited from Labour the largest budget deficit in Europe bar Ireland, the new Conservative-Liberal Democrat coalition has been forced to take drastic action”. http://www.thisislondon.co.uk/standard/article-23848140-george-osborne-we-had-to-deal-with-the-problem.do
The reality is that as a result of the prudent early decisions of Tony Blair and Gordon Brown we entered the recession with the 2nd lowest level of debt of any of the G7 countries. One of Labour’s key decisions was to use the £20 billion plus windfall from the 3G auction (the mobile phone spectrum) for debt repayments.
The OECD figures for G7 countries for the calendar year 2009 give general government net financial liabilities as a percentage of GDP as:
Japan – 108.3%
Italy – 101.0%
United States – 58.2%
France – 50.6%
Germany – 48.3%
UK – 43.5%
Canada – 28.9%
The OECD figures for 2010 show that the UK’s general govt net financial liabilities as a percentage of GDP is 53.5. Lower than the Euro zone average of 59.5.
Other EU countries which have higher levels of debt are:
Italy – 104.1%
Greece – 97.8%
Belgium – 83.3%
Portugal – 64.3%
Hungary – 60.1%
France – 57.2%
Labour put the country on a steady footing to weather the recession. Because of this the budget deficit could have been reduced at a steady pace, without the risk to future growth and without the raid on the most vulnerable in our society. Instead The Coalition has opted to slash public services and hike up taxes in a direct attack on hard working families in this country.