The text of Sir John Major’s article on the economy under Labour, published by The Sunday Mail on 4th April 2010.
SIR JOHN MAJOR:
On 7th May 1999, Gordon Brown announced that he was planning to sell off 400 tonnes of our natural stock of gold. The British economy was still in good health and required no cash injection, yet he threw away over a half a century’s worth of the country’s inheritance – at the very bottom of the market.
This catastrophic decision – unilaterally made by Gordon Brown – has lost Britain £6.6 billion – double the cost of Black Wednesday. In fact, to put Black Wednesday in context – the Exchequer now borrows almost £3.3 billion every week, simply to cover Labour’s debts.
Gordon Brown was warned about the gold sales. Senior Treasury officials cautioned him against it. Investment banks told him the price was too low and would rise. Yet he chose to ignore them all, and claimed he was acting “on the technical advice of the Bank of England”. We now see from documents released under FOI that the Bank of England was, in fact, reluctant to back his proposal, but a key passage still remains blacked out. What is it that the Prime Minister wishes to hide?
The sale of gold is just one of many decisions that illustrates how the Blair/Brown years have wrecked the golden economic inheritance that the last Conservative Government bequeathed them. Alas, there are plenty more.
In 1997, as Chancellor of the Exchequer, Gordon Brown abolished the Dividend Tax Credit paid to pension funds and companies. It has been estimated that this reckless action may have cost pension funds up to £150 billion.
Indeed, Tony Blair’s own former pensions advisor stated that Gordon Brown “knowingly destroyed what was once one of the great pension systems in the world and he did it deliberately”. It was economic and social vandalism on a seismic scale.
The Prime Minister consistently argues that Britain’s deficit has been the result of a global financial storm that started in America, and that spending grew because he did not want to “do nothing” during the recession. This is sophistry beyond the point of deception.
A huge structural deficit – or government overspending that is with us year on year – has been built up by Gordon Brown since he stopped following the Conservative Government’s spending plans in 2001. As soon as he began to take his own decisions, the decline towards today’s economic train wreck began. Gordon Brown alone built this deficit. He alone is responsible for it. The British people will pay for it.
And what of “boom and bust”? For years we had to endure the Blair/Brown mantra that they would abolish what they called “Tory boom and bust”. The British people have now discovered the reality. Labour has certainly abolished the boom, and has created an almighty bust. The Blair/Brown “boom” was a fake, built on a mountain of consumer and corporate debt, and the bust has been the longest and deepest – as Alistair Darling himself has admitted – for 60 years.
Labour’s wild exaggeration about the cost of Black Wednesday was the beginning of a long history of bending statistics to distort truth and rational argument.
Much of what the Prime Minister himself says is worthy of satire. Last summer, he tried to carry on the pretence that public spending would be increased over the next few years. He claimed repeatedly that expenditure would grow. This was patently absurd. Thankfully, David Cameron managed to change the terms of debate and won the argument that cuts are needed to get our record borrowing under control.
But some of what the Prime Minister tries to claim is downright deception.
When his sleight of hand was discovered over the abolition of the 10p tax band in 2007, he dismissed claims that this would hurt the poorest in society, saying “no one would lose out”. But the Institute for Fiscal Studies disagreed. Their own estimate was that 5.3 million families would suffer as a result of this policy.
Most shamefully, the Prime Minister has deployed the same statistical chicanery on our Armed Forces. In October 2007 – in a cynically-timed visit – he flew to Iraq and told our troops that 1,000 of them would “home by Christmas”. In fact, the troops were just moved around the Gulf region, with an increase of over 500 personnel at sea, and an overall increase of 380 supporting operations in Iraq. Between September and December 2007, there was a reduction of only 430 troops in Iraq.
Errors of fact in party political dispute can be excused, and even forgiven. But errors of fact affecting our Armed Forces in the field – and their families here at home who live in daily fear for the safety of their loved ones – can neither be excused nor forgiven. If any Prime Minister gives his word to service men and women – especially when they are engaged in active combat – this must be honoured to the letter. They deserve, and should expect, nothing less.
And yet the deceptions continue: in the past few weeks alone, the Prime Minister has misled the public not once, not twice, but three times. First, he misled the Chilcot Inquiry, then the House of Commons, over defence spending, stating that spending had risen every year, when in fact it fell. Even his apology was disingenuous. He asserted that spending fell in “one or two” years, yet in fact it fell in four years since 1997.
The Prime Minister then claimed 300,000 businesses had received “cash flow help” from the Government in the recession. Yet he must have known that the actual Government figure is only 160,000.
Finally, by mingling two entirely separate sets of statistics, the Prime Minister claimed immigration is falling when, in fact, it is rising.
Such a catalogue of errors is either incompetence or deception. Neither is acceptable nor worthy of the Office of Prime Minister.
Gordon Brown’s personal decision to sell our gold at rock bottom prices – and for no good reason – cost Britain the equivalent of two Black Wednesdays. He has destroyed pensions. He has wrecked the economy. He has doubled the national debt and will do so again. Most regrettably of all, after thirteen years of this Labour Government, the word of the Prime Minister can no longer be trusted.
When New Labour came to power it was hailed as a new dawn. But the sun is now setting. In May 1997, they inherited what Tony Blair’s own economic adviser termed a “better [economy] than that of any [incoming Government] in living memory”. They had the trust and goodwill of the British people. They have squandered it all.
“A future fair for all” is Labour’s slogan in this election year. But having been let down so badly by this Labour Government in the past, how on earth can the British people believe they will be any better off with them in the future?
Labour has had long enough to prove it is a Party fit to govern and has comprehensively failed that test. Time has finally run out for them and I hope that, on Tuesday, the Prime Minister will call the Election for which the country has been crying out for so long, and which he can no longer avoid.