I don’t watch Andrew Marr’s Sunday morning politics
programme because I’m at church at the time it is broadcast and never seem to
be able to find “catch-up” time. However I understand that two weeks ago (30th
April) Theresa May persistently evaded Marr’s questions about nurses having to
go to food banks because they couldn’t afford to buy food, but three times referred
to the need for a “strong economy” and a government which “understands the importance
of the strength of the economy.”
Well, who would argue against the desirability of a
flourishing economy? But the impression
Mrs May gives, and clearly intends to give, is that Conservative governments
provide this strength and Labour governments don’t and won’t.
Sadly I suspect that most of the electorate accept this, but
it is the triumph of slick PR and a lick-spittle press rather than an objective
appraisal of the truth.
Simon Wren-Lewis, a professor of Economics at Oxford University,
has attempted to provide such an appraisal
on his blog Mainly Macro. I strongly
recommend reading the entire article at
But in case you haven’t time here is an honest summary. (My own additional comments in Italics in
brackets). The survey looks at the major economic decisions by British governments
over the past forty years or so: 1979 - 1997 (Conservative Chancellors of the Exchequer), 1997 - 2010 (Labour), post 2010 (Conservative)
Howe’s (Conservative) 1981 budget.
Imposed tax rises in the middle of a recession. Was famously opposed by 364 economists in a
letter to The Times. Generally
accepted to have delayed recovery by some 18 months. (This
was the period in which Britain’s manufacturing capacity was reduced by a fifth, and unemployment
rose to over 3 million, with the consequent loss of skills and export potential – not to
mention devastated communities and much human misery)
Lawson (Conservative) Boom in the late 80’s: a dash for growth (that produced little growth but lots of
Exchange Rate Mechanism of the EU (The ERM) in 1990 (John Major, Conservative chancellor). (Most
of us welcomed this as a good move. The problem was that we joined at too high a
rate – almost 3DM to the £. John Major
was not necessarily to blame: Mrs Thatcher is said to have decided on the figure
unilaterally, and imposed it on her cabinet. )
from the ERM. Black Wednesday,16 September 1992, Norman Lamont Conservative chancellor. ( The above rate proved unsustainable Britain was ignominiously forced to leave the ERM)
failure throughout this period to use
the revenues from North Sea Oil to set up a Sovereign Wealth Fund (as did, for
example, Norway) (Instead the bonus was squandered on tax cuts and the funding of the
high level of unemployment)
The ERM debacle led to the loss of the Conservative's
credibility on economic matters and, eventually, to Tony Blair’s Labour landslide
Wren - Lewis highlights three
major decisions made during the period of the Blair Brown governments and argues that all three were correct. They are:
The independence of the Bank of England (from 2nd
The decision, engineered by Gordon Brown, not to
join the Euro in 2003.
The fiscal stimulus (Alistair Darling Chancellor
of the Exchequer) after the crash of 2007 which stabilised the economy and
restored some growth.
Wren-Lewis excuses the Labour government’s failure to
regulate the banks and financial sector more tightly, and thus perhaps avoid
the crash of 2007, on the grounds that they were following the consensus view
at the time. The Conservatives were arguing for even lighter regulation.
(Wren-Lewis does not mention the financing of public sector infrastructure
projects, especially hospitals and schools, by Private Financial Initiatives,
PFIs, which I believe is a major mistake for which we shall be paying over the
odds for years if not generations)
On George Osborne’s tenure as Chancellor, Wren-Lewis praises
the decision to set up the Office of Budget Responsibility, OBR, but condemns
the decision to embark on austerity from 2010 as a “huge mistake.” He also points out that the decisions to leave
the Single Market and Customs Union are not mandated by the Referendum but are
“down to the Conservative government alone.”.
All in all, it is hard to argue with Wren-Lewis's conclusion that "[The track
records ] show clearly that Labour tend to get things right while the Conservatives have created a number of major policy induced disasters."