NO THEY DID NOT, BANKS THE WORLD OVER CAUSED THE GLOBAL CRASH
Banks the world over were investing in riskier and riskier investments hoping to make bigger and bigger profits, because they felt they couldnt fail. That in a nut shell is the reason for the global crash. The crash of Lehman Brothers was a big factor in this again a greedy bank overstretching itself. [More here]
Its amazing how this one just seems to perpetuate despite being absolutely incorrect.
Probably caused by Labour's insistence on not dealing with the public belief, installed by the Tories, that the crash was caused by Labour. The fact is its just not true and they should have all have fought against the Tory propaganda.
But lets stick to facts and not what Labour should have done.
Lets not have rose tinted glasses on either because no government is going to be perfect and Labour wern't, but they were much, much better than they have been painted by the Tories and the economy the Tories were handed in 2010 was already in recovery. Unfortunately the austerity policies stopped the recovery in its tracks and instead we had the longest period of stagnation ever. [More here]
- On the eve of the crash, U.K. government debt was 28 percent of gross domestic product, compared with 48 percent in the U.S. and an average of 43 percent in the euro area.
- One of the biggest things that Brown did was kept us out of the Euro that shielded the UK when the crash came in 2008. [More Here]
- At the start of 2007, there were few economists expressing concern at government borrowing running at 36% of GDP. By post-war standards, UK government debt was low and the government appeared to be meeting its own reasonable fiscal targets. [More Here]
- Given the period of strong economic growth, it is unsurprising that Labour wished to increase spending on health care and education. If the financial crisis hadn’t materialised, we may have looked back on the great moderation with kinder eyes. [More Here]
- By 2007 Labour had reduced public sector borrowing slightly below the level it inherited from the Conservatives. And more of that borrowing was being used to finance investment rather than the day to day running costs of the public sector. Labour had also reduced public sector debt below the level it had inherited. [Source Institute for Fiscal Studies]
- Brown handed over the power to set interest rates to the Bank of England. This contributed hugely to economic stability. [More Here]
- In 1997 national debt was £352bil in 2010 it was £902bil = £550bill so over 15 years Labour increased debt by £550 billion and most of that debt was caused by the the subprime crash.
- In 2010 national debt was £902bil in 2015 its £1,637bil = £735bill so far in 5 years the Tories have increased debt by £735 billion, and there is no world crash happening and no banks to bail out that was all done under Labour.
THE Letter how could we not mention the letter.
Much was made over the letter or rather note left by Liam Byrne for the incoming Chief Secretary which turned out to be Liberal Democrat David Laws. The Joke note similar to one left by outgoing Tory chancellor Reggie Maudling in 1968 read. [More Here]
“Dear Chief Secretary, I’m afraid that there is no money. Kind regards and good luck! Liam.”
The note was disclosed at a press conference with one word changed by Osbourne and Laws that made all the difference. They added 'left' ... I’m afraid that there is no money left.
In 1964, outgoing Tory chancellor Reggie Maudling left a note for his Labour successor, Jim Callaghan:
“Good luck, old cock. Sorry to leave it in such a mess.”
Callaghan reportedly thought he was talking about the state of his office at first, before he looked at the books. [More Here]
The note was nothing more than a Joke but made into oh so much more by Laws and Osbourne who claimed they had no idea of the attention it would receive. Sorry, I'm not falling for that one, the pair of you knew exactly what you were doing from changing the word, to not releasing the actual letter. Everyone could have seen much earlier what was actually written if the letter was released sooner but that few days made all the difference.
CONCLUSIONWith hindsight, Labour prior to 2007 could have reduced spending and paid down some of the debt. At the time things were going well and an election was coming up. Would the Tories have done any different? Any goverment likes to get some good feel out there towards the end of their term. Noone was complaining about investment in Schools and Hospitals and the Finacial crash would have required someone with a crystal ball to foresee. Brown was a long way from perfect but the two main things he did keeping us out of the Euro and giving the Bank of England control of setting interest rates, have done unmeasurable good for the UK economy.
Its also noteable that the Conservatives backed all of Labours spending plans in the commons prior to 2008. Why didnt they oppose them if they were that bad?
Did Labour cause the Finacial crisis, NO.
In 2007 when Lehman Brothers went bust Labour was left with some hard decisions like bailing out Northern Rock and RBS. Had Brown not kept us out or the Euro things would have been much worse.
The question people should be asking is why, with all the Conservative austerity, has the debt risen by more than 70% to over £1.6 trillion?
Why? Where is the money going?
Why with the debt increasing did Osbourne in 2014 give £93billion away in tax concessions to big companies? [More here]
Government debt under labour 1997-2010
Jeremy Corbyn is right to blame the banks, not Labour, for the financial crisis
Labour overspending did not trigger financial crash, says senior civil servant
Government borrowing, debt and debt interest: statistics
A way forward for the centre left on deficits
United Kingdom national debt
United Kingdom Government Debt to GDP
Gordon Brown's U.K. Economic Record: A Reassessment
The origins of the financial crisis
Bankruptcy of Lehman Brothers
Case Study: The Collapse of Lehman Brothers
The Death Of Lehman Brothers: What Went Wrong, Who Paid The Price And Who Remained Unscathed Through The Eyes Of Former Vice-President
How One Hastily Scrawled Note Came To Haunt Labour In The Tightest Election In A Generation
Treasury chief's note to successor: There's no money
Labour Anger Over Ed Miliband's BBC Question Time Interrogator, Catherine Shuttleworth
Financial Crisis & Recessions
Hopes for UK economy
The myth of record debt
The £93bn handshake: businesses pocket huge subsidies and tax breaks
How big is the problem?
What’s the best way to reduce the deficit?
So, how was it for you, Gordon?
David Cameron and the national debt monster in three charts