So, what has Gordon Brown done for us?

On the day of his pre-Budget report, the Chancellor's seven-year reign at the Treasury is examined
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Indy Politics

Gordon Brown delivers his 16th Budget statement today as the longest serving Chancellor of the Exchequer since the Victorian era. He will tell the Commons that the economy has achieved the longest period of uninterrupted growth since the Industrial Revolution.

Gordon Brown delivers his 16th Budget statement today as the longest serving Chancellor of the Exchequer since the Victorian era. He will tell the Commons that the economy has achieved the longest period of uninterrupted growth since the Industrial Revolution.

Michael Howard, the Conservative leader, will retort that Mr Brown has left Britain encumbered with record public and private debt that will require huge tax hikes to sort out.

Overall, most observers credit the Chancellor with exorcising Labour's reputation of having irresponsible tax and spend policies. But concern is mounting over imbalances in the economy, the Chancellor's tendency to meddle in the micro-economy and the growing burden of tax and regulation.

So who is right? The Independent examines main areas of the Treasury's record.

THE ECONOMY

Positive growth in the final three months of this year will mean the economy has grown for 50 successive quarters, an all-time record.

During the world downturn, annual growth in the UK averaged 2.5 per cent, more than France, Germany, Italy, Japan and the US. But while services have grown by 29 per cent, manufacturing has risen by less than 1 per cent.

Interest rates have varied between 6.5 per and 3.5 per cent, the lowest in half a century. Inflation has averaged below the Government's target.

Verdict: The Chancellor can claim to be the only finance minister of a major economy to have weathered the storms of the global downturn without incurring a recession or even negative growth.

But the Tories point out that, since Labour came to power, its growth has been the slowest in the English speaking world. Critics also say that the headline growth covers up problems at a lower level. The continued strength of the pound, assisted by the Treasury's policy on the euro, has punished exporters and contributed towards an expected record annual trade deficit this year of almost £60bn.

PUBLIC FINANCES

The Government has turned a substantial deficit into surplus.

Mr Brown put in place fiscal rules to control debt and balance the books over an economic cycle.

The Government will rack up debts in every year between 2002 and 2009 but insists it will meet the golden rule.

Verdict: Mr Brown has restored Labour's credibility in the City of London and the increasingly globalised financial markets by getting control of public spending.

By curbing public spending for the first two years and successfully auctioning mobile phone frequency rights he turned a Tory deficit into a Labour surplus.

But since the 2001 election victory the Treasury has embarked on probably the largest public spending spree in Britain, pledging an extra £100bn. There is little doubt that Mr Brown - or whoever succeeds - will be left with a hangover in the next cycle.

HOUSING

The average house price has risen from £68,085 to £160,857 - an increase of 136 per cent.

The total stock of household debt has doubled from just under £500bn in May 1997 to more than £1trn now.

Housing and financial wealth has risen over that period from about £2trn to roughly £3.5trn. Property taxes as a share of state revenue have risen from 10.5 per cent to 12 per cent. The top rate of stamp duty has risen from 2 to 4 per cent. Last year, the share of first-time buyers in the mortgage market fell to its lowest level in history

Verdict: While the boom in house prices is far and away the most dominant feature of the economy under New Labour it is a double-edged sword for Mr Brown.

The surge in house prices created a feel-good factor that encouraged households to carry on spending in the face of a global recession and the sharpest slump on the stock market since the Great Depression of the 1930s.

That alone helped Mr Brown hang on to his cherished record period of uninterrupted growth. But it has left a string of problems that will unwind over the coming years.

While the record volume of debt is outnumbered by household wealth, many fear it is a circular argument - as much of that wealth is tied up in housing where the bulk of the debt sits.

That has led organisations such as the International Monetary Fund to warn that a house price crash - which some pundits believe could hit next year - could topple the economy.

Meanwhile the surge in prices has made it virtually impossible for a whole generation of young people to get a foot on the housing ladder.

TAXATION

Labour has cut the basic rates of income tax, corporation tax and small business tax since 1997. The share of national income tax has risen from 35.8 to 36.5 per cent and will hit 38.3 per cent by 2009. The Tories have identified 66 tax rises since 1997.

The CBI says the tax burden on business has risen by £29bn under Labour. New regulations have been introduced including the minimum wage, the working time directive and paid maternity leave.

There are plans to extend paid maternity leave and create rights for the disabled at work.

Verdict: Arguments over taxation are swiftly lost in a mess of smoke and mirrors.

Labour can rightly claim to have cut key rates of taxes. The opposition can equally rightly list new or higher taxes on everything from domestic cleaners to casinos.

From a bird's eye view, the tax to GDP ratio rose, then fell and is now on an unembarrassed upward path to rates not seen since the mid-1980s.

Most of the increases were so-called stealth taxes such as raising insurance premium duty or playing around with alcohol duties. The Government also gained from rising wage levels that pushed more people into the top bracket.

But, finally, in 2002 the Government came clean with the electorate and hiked National Insurance in exchange for a pledge on improved public spending.

EMPLOYMENT

The number of people claiming unemployment benefits is close to an all-time low at 836,700 - down from 1.62 million when Labour won power.

Employment is at a record high of 28.43 million, reflecting 1.92 million jobs created since May 1997. The number of economically inactive people has risen by 360, 000 to 7.91 million. The number of long-term sick has risen by 64,000 to 2.19 million Manufacturing employment has fallen by 793,000 to 3.35 million.

Verdict: Mr Brown can probably be credited with achieving full employment. But the figures conceal a large section of the population who have simply withdrawn from the labour market. Economic inactivity - those of working age who don't want, or are not looking for, a job - has jumped by 360,000 over Labour's term.

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