Monday, October 15, 2012

Why Brown Shouldn't Be Prime Minister

Gordon Brown - World Economic Forum Annual Mee...

Gordon Brown never fails to sing his own praises. Brown’s budget speeches recall a Soviet style bureaucrat regurgitating long lists of statistics as undeniable proof of his mastery of the economy. On the face of it Gordon Brown looks like a very successful Chancellor, possibly the most successful for a century. The UK has enjoyed continuous growth since 1993, Labour came to power in 1997, and relatively low inflation. There’s been no sterling or budget crisis so far.

So after nine years at number 11, time to move next door to number 10 to work his magic as Prime Minister? No! Because Gordon Brown’s record as Chancellor is a great deal less flattering once it is properly analysed.

But, first let’s acknowledge Gordon Brown’s real achievements: One, making the Bank of England independent. That’s helped keep interest lower and more stable than they would have been otherwise and helped keep the Pound out of any serious trouble. Gordon Brown’s second achievement was to stop the UK joining the Euro. It would have been disastrous for the UK economy.

However, Brown’s record is flattered by the fact that the world economy has enjoyed a long period of benign economic growth, which has benefited the UK. But other Anglo-Saxon economies didn't even better than the UK. Firstly, there’s the fact that by 1997, the UK economy was already doing very well and looks healthier then than it does now in 2006. Indeed, it was the Tories who undertook a lot of the pain reforms to turn the UK into a competitive job creating economy.

Secondly, globalisation has seen UK sectors such as financial and other services, aerospace, telecoms and other high-tech industries thrive. In the meantime, the China effect of driving down the cost of manufactured products has helped keep a lid on inflation through-out the Western world. This has been particularly handy since the UK economy is largely consumer driven.

That covers the so called “mega” trends, which have helped the UK and have little to do with Gordon Brown. Then there are specific actions taken by Brown. Probably the one thing he’ll be remembered for almost more than anything else in the long run is for wrecking the UK private pension system. Back in 1997, it was the envy of Europe, today it looks dangerously inadequate after various tax raids by Gordon Brown. His legacy will be to leave many future pensioners impoverished.

This all forms part of tax and spend and Gordon Brown has started doing this excessively since Labour’s second term. In fact, he looks rather like a one trick pony, whose sole trick is looking rather dated and ineffective. The public sector now eats up 45% of the UK’s GDP, compared to 37.5% in 2000. He has added an extra one million workers to the public sector payroll. For all Brown’s talk of admiring the US and his lectures to European Finance Ministers he has gone out of his way to mimic the basically failed socio-economic models that these Minister’s practice in France and Germany.

Gordon Brown has allowed business to be strangled by an ever growing tangle of suffocating red tape, which is sapping the country’s competitiveness. The UK is sliding down one competitiveness league after another. The fact that the UK economy hasn't shuddered to a halt yet is due to its own strength rather than Gordon Brown’s ability to micro-manage it. But the camel is looking heavily laden, too much so, and it won’t take that many more sticks to break it‘s back.

Gordon Brown is all about short-term gain at the price of long-term pain. Those pigeons will come home to roost one day, in flocks. For those reasons alone, the spend, (stealth) tax and borrow Chancellor, Gordon Brown, does not deserve to become the Prime Minister. But as prime minister he is completely unsuitable. Famous for nurturing grudges, for being bitter, petty and a control freak are hardly the qualities of a great leader.

He is incredibly single dimensional and completely lacks the charisma of Tony Blair or Blair’s capacity to reconcile differences. Gordon Brown would fail to appeal to England’s middle classes increasingly tired of a Scottish dominated Westminster, high taxes, shoddy educational standards and the general air of sleaze and ineffectiveness, which grips New Labour.

If, Gordon Brown does become Prime Minister as seems likely, let’s hope his term is mercifully short and not for the 10 years he wants to do. Let him be remembered for his real legacy, that of destroying a viable private pension system. Although, one can be sure that his pension is safe.

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