It is one of the many myths that was made popular by this government that Britain’s national debt was caused by Labour ‘borrowing too much’. In fact, the crisis had many causes, and state spending only started to spiral out of control only when the then Labour government pumped hundreds of billions of pounds into the ailing banking sector (we are still waiting for the return). Furthermore, given this governments record on borrowing you would think it would like to reconsider its critique of governments gone by.
As Fraser Nelson helpfully explains;
The Prime Minister does know what should be done, as we heard yesterday: radical reform, and accepting that you can’t (as he puts it) “borrow your way out of a debt crisis”. But his government is attempting to do precisely that, borrowing more over five years than Labour did over 13.
However, this government isn’t borrowing money to service the national debt, it is rather borrowing money to institute a 1001 crazy reforms that will only damage Britain’s economic productivity and in the long-run damage its quest to balance the books. For example, billions are being poured into the NHS reforms that nobody actually wants.
Labour has been too shy when it comes to criticising this aspect of government policy. If the government was borrowing money to invest in the real economy, to offer debt relief help, to raise wages, to build houses (thus creating jobs), etc then actually this would be money well spent and in the long run it is money that would be a real investment in making a dent in the deficit. I suspect Labour’s shyness comes from the fact it feels it is vulnerable on this issue but it shouldnt let that cow it and silence its attacks.
In fact, this is yet another example of this government funneling obscene amounts of money to those who already have plenty of it, something else that will exacerbate, not solve our economic problems. Mr Miliband and Mr Balls should be planning a daring raid into ‘enemy territory’, to destroy this inept governments record for economic competency once and for all. No contradiction exists between building a socially just and sustainable economy and solving the debt crisis. You need to do the latter to answer the former. It’s about time Labour pointed this out and stopped approaching this aspect of the economic debate as if it was walking on egg-shells all the time.