North East Beds MP Alistair Burt criticises a Labour minister for leaving a note saying 'there is no money', but I wonder how different things would have been if we had had a Conservative government before 2010? The financial crash was caused by the deregulation of the financial system, which began under Mrs Thatcher. George Osborne as shadow chancellor was always calling for even more deregulation.
If you choose to believe that Labour’s public spending was another factor, then the Conservatives were promising to match that, so either way it seems that the crash would have been at least as bad if the Conservatives had been in power.
Martin Wolf, the most respected Financial Times journalist writing on the crash and its aftermath, concludes that Gordon Brown’s government reacted correctly after the crash by providing a stimulus to get the economy moving, but considers the coalition’s idea of balancing your budget in the middle of a deep recession as madness (and deeply unfair on the poor).
I expect Mr Burt would want to point out that the economy is growing now. Yes, but it is not the export-led recovery which George Osborne promised. It relies far too heavily on house price rises and increasing public debt – both features of the last crash. As Lord Turner, former head of the CBI and the FSA has said “It is as if we have had a cracking great hangover, had a stiff drink and off we go again”. Perhaps we should stop passing the blame for the last crash and start to change policies which both Wolf and Turner fear may cause the next one!