Comments: Brown's reputation wilts as the political heat turns up

isn't it the case that brown's 'boast' of record employment and a 'stable' economy derives from his raiding of taxpayers, pension funds, telecom companies, so as to squander the money on the mickey mouse 'employment' of more and more civil servants and nhs staff. The other side to this coin is the worsening environment for the real wealthbuilding activities which have declined under brown. at long last the voter is realising that he has been duped by all the brown self-righteousness he has had to endure for 8 years. the worm is slowly turning

Posted by john cornford at June 11, 2006 10:54 PM

Actually, I think there is little evidence to support John Cornford's bile ( and that of the commenters on today's Niall Ferguson Daily Telegraph article).

While public sector employment may have grown, virtually all the growth has been in education and health, much of it on the back of reckless election promises made by Tony Blair not Gordon Brown.

The regional public spending issue I think is little changed over recent years, although there has been a shift from direct state aid to business to state aid via the tax credit system encouraging lower wage costs - which I think is economically literate. Those who talk about regional public spending have to demonstrate (a) that the spending proportion has changed and (b) that this is in some way detrimental to the overall economy. Neither have been demonstrated.

The poll results are much more likely to result from a sustained campaign in the media.

Posted by Paul Bivand at June 12, 2006 12:18 PM

I think Brown is suffering from having been in the job too long and because, after a while, people take stability for granted. I do think, however, that articles as daft as Niall Ferguson's probably help him. Brown doesn't even holiday in Martha's Vineyard. There is legitimate criticism about Brown's tax and spend, and about over-regulation, and the tax credit fiasco, but the 'we're all doomed' approach doesn't really work.

Posted by David Smith at June 12, 2006 12:32 PM

The recent stability (since 2004) has only really been acheived because of cheap credit and fierce competition amongst consumer finance companies. In this respect it hasn't been stability so much as kicking problems into the long grass. After all, borrowing is not the same as output-driven wealth creation.

This I think is why at the G8 meeting at the weekend, Brown has been tactfully warning that oil-driven inflationary pressures might damage the world economy (he's actually talking about the UK economy of course, because of our economy's depleted resilience to interest rate rises).

Dull competence, or fiscal serendipity? As inflation has started catching up, the MPC has been holding off the rise - which it can't do for ever.

Posted by Barry at June 12, 2006 03:30 PM

I meant the rather longer-term stability, which dates back to 1992-3, since which time inflation has averaged roughly 2.5% on the RPIX measure and growth has continued, quarter-in, quarter-out. Brown, of course, inherited an economy in 1997 that had already embarked on this long period of stability. His main contribution to maintaining it, in my view, was Bank of England independence.

Posted by David Smith at June 12, 2006 05:19 PM

I feel that the lowered competence rating might in part be due to our fading memories, and I agree that this period of stability is probably unprecedented.

If I remember correctly, the decoupling of the BofE from the elected government was meant to foil the rate-induced boom-bust cycle for which the drumbeat was the general election.

I think that what we have now isn't wholly without side-effects though. Instead of an elected government running the show we have a small group of rate deciders with mixed levels of acquaintance with the UK economic situation who seem to be influenced by whoever is shouting the loudest around monthly decision time (be it retailers, mortgage providers or foreign banks). And they're not immune from making mistakes - hasn't last August's rate cut now been acknowledged by the MPC as short sighted(?)

Not to sound overly critical, john cornford's billowing smoke isn't without fire. Gordon's pensions raid has undoubtedly left companies' schemes reeling, to the taxpayers' significant future loss (contrast Norway's prudently managed pension surplus).

The 3G licenses fiasco generated around 30bn (if I remember correctly) for the UK government to slosh around the public sector between 2002 and 2004. My brother was working for Motorola in Swindon at the time, and for them they saw it as their cue to leave the European market to it's own devices - almost literally!

Personally, I don't disagree with the licenses fiasco though! I think it was good old-fashioned Labour government wealth re-distribution exercise from the wealthy telecoms to the public sector. But again, we have the Gordon the helmsman trading on promises (to realize their investments, those telcos would have had to make around 500 quid per adult as profit through 3G services!), and again we now have credit-based spending fuelling economic growth, which essentially looks like a reverse of the same principle!

If so we have had a half-decade of financial smoke-and-mirrors for which the price isn't paid yet.

Am I being unfair on the Scot?

Posted by Terry at June 12, 2006 08:31 PM

Terry,

I well remember the 3G licenses fiasco. Motorola in Swindon were one of my customers at the time. The 3G licences practically closed down all wireless infrastructructure development in this country - with the result that it is now done mainly abroad. Another clever move by Gordon Brown.

Posted by HJ at June 13, 2006 10:54 AM

David
I think there's a remarkable degree of agreement among scientists that global warming is a reality and that temperatures are rising faster than at any time in the last 500,000 years. Agreed many scientists shy away from arguing a difinite causal link to hurricanes, but that's not central to the case for global warming. The evidence for that is based on ice core studies which are generally thought to be a reliable measure of past temperature variations. And above all from the point of view of economics - global warming as a challenge offers businesses greater opportunities even that warfare - and the bottom line is that the precautionary principle that dictates you bring up your children not to play in the road/talk to strangers/eat unknown substances is a sound one; applied to global warming we take a precautionary approach because if the predictions are correct the consequences are simply unthinkable

Posted by jonathan at June 14, 2006 03:35 PM

Jonathan, You're arguing in good faith and I respect that, but don't overstate it. There's no reputable scientific evidence that this is the fastest period of warming in the past 1,000 years, let alone the past 500,000. What we know is that global temperatures have risen by 0.6 degrees C in the past century. What we don't know is that they will rise by between 2 and 6 degrees over the next century, as the IPCC claims. I agree in general about the precautionary principle but we have to be clear about what we are taking precautions against and why. If we really believed the alarmists we would stop hydrocarbon usage now. I think the climate change lobby is deliberately overstating its case to get some action - nothing wrong with that but we shouldn't confuse it with hard science. Also, there is a risk that such alarmism leads to poor decision-making. I don't have a problem with a new generation of nuclear power stations but others do.

My take on this is that some global warming is indeed occurring but that we need more precision and balance in the debate. I'm also slightly worried that some in the green lobby see this as a new anti-capitalist front.

Posted by David Smith at June 15, 2006 10:15 AM