Oberon Houston: Britain is not working
This Christmas day, after the turkey and bubbly have gone down, take a short stroll outside before the light goes. During your walk, the chances are that the only others you’ll see are children lucky enough to get bicycles from Santa. I remember a Christmas ten years ago, when my son was six and we got him his first ‘proper’ mountain bike. It was a big present and we had to save up to afford it, however it is probably one of the most important moments in a child’s youth, and we can all still remember spending a joyful afternoon, despite the grey and drizzle, in an empty car park teaching him to ride his shiny new bike.
Today, that bicycle won’t be such a costly present. A Mountain bike that would cost you £400 a decade ago, can be bought today for less than £100. The only difference is that they are now imported from developing countries for a fraction of the cost of one made here a few years ago. Globalisation is here, and it is benefiting us all in remarkable ways. The cost of goods is falling, we get more for our money, interest rates are low, meaning cheaper mortgages and credit for consumers. The slight downside is that to fuel the expansion of manufacturing capacity in the east, the price of natural resources have risen. However, on the whole, we are better off now than we’ve ever been. Things are good, and why shouldn’t it continue? Well after your stroll, as you settle back in the sofa to enjoy the special edition telly programs, you might want to ponder this, if the rest of the world is working so well, how do we compare?
Gordon Brown boasts today that there is no need to worry about this; he has, and is, achieving for Britain. Before Labour were elected, Gordon Brown said that he wanted to create a ‘classless society with equality of opportunity’. He believed that to achieve this, the poor would need access to education to allow them to participate in the opportunities that they would need to succeed in life. This would be done through the ‘University for Industry’ and ‘Individual Learning Accounts’ (ILAs). This would then create a ‘new society based upon learning, skills and a work ethic’. Markets could be improved by the state, Brown believed, by introducing regulation. He would scrutinise company directors to make markets work more effectively, ‘where they create external costs that are not fully priced in the market’. Heady stuff this, for the former student of history, a potent mixture of meddling in markets and social engineering on a grandiose scale. So how is his project going so far?
Not good. Brown has pushed Britain from fourth to fourteenth in the world competitiveness league. Because of the waste and bureaucracy Brown has created, workers in Britain will have to work the equivalent of ten years longer than their counterparts in France, Germany or the States during their lifetime, just to achieve the same results. In manufacturing the growth in productivity has fallen back to the level of 1974.".
Brown boasts that his ‘New Deal’ created thousands of jobs, unfortunately there is nothing new about this deal, virtually every country has tried this form of job creation, despite the evidence that it is ineffective and expensive. In Brown's case £3.5 billion worth of ineffectiveness. ILAs were not new either, they were considered by the Tories in 1994 and rejected as ineffective. Undeterred, Brown forged ahead and 2.5 million people signed up for training in new skills, 3 times more than expected. By October 2001, the scheme was in crisis. Corruption and fraud was rife, phoney companies and phoney students were stealing hundreds of millions from it. Estelle Morris tried to get the scheme abolished, the Chancellor refused, and therefore she had to stand up in the commons to announce the ‘temporary stop to this successful program’. Ivan Lewis, the parliamentary under secretary of state admitted that ILAs were ‘one of those glossy strategies that do not lead anywhere’. Meanwhile the number of researchers working in Britain is falling and the closure of university physics and chemistry departments is sky-rocketing and our universities are facing a funding crisis.
That’s the result of Gordon Brown's education revolution. What about the business environment? In a CBI survey, 75% of members complained of Governments poor understanding of business and 80% blame increased regulation for inflicting ‘significant damage’ on their performance. Brown boasts at the health of Britain’s economy, but the strength he cites is illusionary. Expenditure as a percentage of Gross Domestic Product, 35% under the Conservatives, through taxation, has soared to 42% of GDP today, and is still increasing. This is fuelling a public sector boom that has masked a sharp reduction in the country’s manufacturing output. Two million public sector jobs have been created by Brown, yet the manufacturing jobs that pay for them have decreased by one million since he came to power. Public spending increases are at record highs under Brown, yet the benefits to frontline services have been so poor that the Prime Minister wants to re-introduce policies that were in place when Labour came to power and were scrapped, by Brown after he was elected. On top of this, most public building programs have been financed with private money but do not show on the books as debt. Our future generations, outside on bicycles from Santa on Christmas day, will have to pay for it. Brown has mortgaged this debt to them.
Economic growth, again, is lower under Labour that it was with the Conservatives and Britain’s trade gap is the highest it has ever been. To top it all off, Brown has had to recently break his own ‘golden rule’ and is spending more than he gains in tax receipts, thus fast accumulating debt that must be paid for by future generations. Despite this, he plans to accelerate spending until 2008 and further increase taxes and public debt to do so. Yet despite the money he has poured into the health, because of his strangling central control structure, the NHS struggles to improve front line services and many are deeply in debt.
Up until now, we have benefited from globalisation, but it’s a false dawn that we cannot afford to ignore any longer. As the capabilities of developing countries grow, the next generation of Britons will need to rise to the challenge and participate at the leading edge of the process. To help them succeed, it is vital that there is full participation from Government. From education, to business and health, every level will need to participate. But, just as Britain should be gearing up to face the future with optimism and strength, Gordon Brown is dragging it back into the 1970s. Thanks to Gordon Brown, this disaster of a man, Britain is not working.
If you would like to know more about our Chancellor and Future Prime Minister read the book “Gordon Brown” by Tom Bower.