Gordon Brown, economic genius?

The Prime Minister's record on the economy has come under scrutiny recently due to turmoil in the stock markets and the impending downturn. Many commentators have been drawing on the successes of Mr Brown's chancellorship to provide a contrast to the latest difficulties, let's take a closer look at the 10 years.

Mr Brown declared in PMQ's this week that he inherited difficult economic conditions from the Tories in 1997. This is not true, the economy had been growing healthily for 4 years. Although there was a budget deficit, this was diminishing and due to go into surplus by 1998 - which it did. Mr Brown's policy was to keep to the Tory spending plans for the first 2 years of Labour in power. Surely this was to make sure that the thought of Labour in power would not frighten the horses! So rather than follow his own beliefs, he followed his opponent's plans which led to some reasonable surpluses.

His first decision, which has been rightly applauded, was to make the Bank of England independent. Although according to Mr Blair, in The Blair Years, he claims that it was his idea.

Mr Brown then started to reform the benefits system, bringing in the tax credit system. Tax credits are a reasonable system to get money to those in need, but the implementation has lead to major problems with overpayments, underpayments and attempts to reclaim money from people who need it most. Several billion pounds have been wasted.

Between 1999 and 2002 Mr Brown sold off half of Britain's gold reserves at a price of $215 per ounce, it now stands at around $800 per ounce. Not a great deal.

In the 2001 election campaign Mr Blair announced that NHS funding would increase to the EU average. His bounced Gordon Brown into it, who then allegedly stormed into number 10 saying, 'You stole my f***ing budget'. It just so happens that this was around the time that the dotcom bubble burst. So with a budget surplus and an election commitment, billions of pounds were pumped into the economy - effectively fighting off the prospect of recession.

After economic growth was secured, GB continues pumping money into the economy - leading to a large budget deficit. Now that we're facing the prospect of another downturn, the cupboard is bare.

So after 10 years, I think the verdict is that the early decision to make the BoE independent was a good idea - whether it was GB's we don't know. When GB went against his own instincts, staying to Tory spending plans then being bounced into spending by TB he has managed to keep the economy growing.

I think the best that can be said is that he didn't mess it up, but in the end all Labour chancellors run out of money. Which he has now. He has left a very complicated tax system which haemorrhages money through the tax credit system, he has run down our gold reserves, he's increased our taxes. Finally, his reform to the tripartite financial monitoring system, using the Treasury, Bank of England and Financial Services Authority has been found wanting with respect to monitoring of Northern Rock.

So I don't think the record is as good as people say, and we now have a problem. The chickens have come home to roost.

Squiffy.