Often, Labour get the blame for the country’s economic failings. However, how much of this blame is actually legitimate?
In recent months, one of the main weapons of criticism in the arsenal of the Conservative Party and other critics of the Labour Party is that Labour are somehow responsible for the economic decline and rising national debt that The United Kingdom has succumbed to.
Naturally, the Conservatives are going to utilize this as an instrument to gain them support – and at the same time, whenever they have any difficulties or poor economic results, they can fall back on one of their favourite claims which is that they “inherited a mess from Labour” which they have had to adjust to and which they’ve had to reverse the effects of.
Therefore, with all this stigma perpetuated by the Conservative Party, and of course notorious right-wing newspapers such as The Daily Mail and The Sun, which people are unfortunately still taking seriously (sigh), I will dispel this idea that it is down to Labour that the country is in large debt.
So, Labour were in power from 1997-2010. If you look at the above graph, you’ll see that under Tony Blair’s government, the national debt was actually very steady for many years at the time when he was in power. However, as we get to the 2008 mark, you’ll see that the level of debt rapidly shoots up, and carries on doing so.
In this exact year, the Global Banking Crisis occurred, where the banks lend out vast amounts of money which they didn’t have to large firms throughout the world, primarily financial firms, whilst charging extortionate interest rates. The financial firms however, eventually couldn’t afford to pay the banks back due to the increasing debts they owed – leaving the banks in a fatal situation which almost brought the global economy to its knees, until the countries affected had to bail out their banks, primarily using taxpayer’s money.
The United Kingdom had to pay a devastating £850 billion to rescue the banks. Yet it was not just the United Kingdom which suffered as a result of this – nearly every country in the world was affected by this economic miscarriage, suffering from increasing national debts and widespread unemployment. In Spain and Italy, about 50% of 18-24 year olds were stricken by this plague of unemployment for the subsequent couple of years following the crisis.
Anyone not having this knowledge fresh in mind would look at the statistics I’ve provided and most likely believe that it was down to Labour’s incompetence that the country endured such economic setbacks. Of course, newspapers such as the Daily Mail will take advantage of this and not inform the public of the truth – meaning that many of its readers will instead fall for its other headlines, many of which blame Labour for the diminishing economy.
As a result of this, the bankers are getting off scot-free, whilst others (Labour, in this particular scenario) are having to pick up the pieces and take the blame for their mistakes.
Okay, all this aside, I will now raise another important issue. David Cameron took over the country in 2010. According to the HM treasury, the national debt was £0.76 trillion at the time. However, after five years of the country being ruled by the Conservative-Liberal Democrat coalition, the national debt has almost doubled, and at the start of this year it was approximately £1.36 trillion.
The graph below confirms this statistic.
This was after five years of barraging the British people with overpowering levels of cutbacks on welfare and public services. Of course, it would be understandable if the debt had risen after much more borrowing and public spending, and investments which would pay off economically later down the line. But a debt which has almost doubled after five years of cuts? Something is not right here.
Either way, the two statistics I have implicated should leave no doubt that it is more to do with the Conservative government that the debt has spiralled out of control, and has very little to do with the Labour Party.
Finally, back to the banking crisis. If anything, it was the Big Bang in 1986, which largely deregulated the economy and introduced a more neo-liberal free-market variation of society. It was originally Margaret Thatcher’s allowing of this policy to be introduced in the 1980’s which arguably set the scene for Britain to be affected more significantly by the banking crisis.