Full extent of Gordon Brown's economic failure revealed

September 19, 2008 1:03 AM

On the eve of the Labour Party Conference, and with the City in turmoil, an explosive report from the TaxPayers' Alliance (TPA) demolishes what is left of Gordon Brown's reputation for effective economic and public sector management. Using detailed international comparisons and official statistics, the report reveals that in terms of economic growth, workforce productivity, tax levels and complexity, inflation, pensions, energy policy, public service quality, value for money, real disposable income, national debt, welfare dependency and other key measures, Britain's performance has been poor across the board as a result of Gordon Brown's policies.


Far from being better prepared to weather the credit crunch thanks to his good governance, as the Prime Minister claims, our research suggests that the Government pursued numerous ineffective policies over the last decade that have left Britain more vulnerable to the downturn than our international competitors. The full report can be found here.



PLUS: INTERNET GAME LAUNCHED - THE BROWN CALCULATOR



To accompany the new report, the TPA proudly presents The Brown Calculator, an online Flash game which allows you to do some maths - the Gordon Brown way! Try out any sum you fancy; the answer you get might not be what you expect, but it will reveal a key aspect of Gordon Brown's economic record. The Calculator is the first stage of a large new TPA campaign that will employ new media, social networking sites and Web 2.0 to drive home the message of low taxes and better government. The calculator can be found at www.browncalculator.com. If you would like to link through to the calculator, the downloadable button (see right) and the button's HTML for your web site are here.



KEY FINDINGS



ECONOMIC GROWTH: Whilst Britain has outperformed our European neighbours, all other English-speaking wealthy countries have seen faster growth since Gordon Brown became Chancellor. Had Britain matched US levels of growth since 1997, the UK's GDP would have been £14 billion higher by 2006.



TAX REGIME: Since 1997, the tax burden has increased in real terms by 51 per cent, placing an unsustainable burden on ordinary families and drastically slowing the rate of growth in disposable income. Government spending as a percentage of GDP has soared above the OECD average, corporate tax has remained high whilst competitors have introduced successful cuts, the size of the British tax code has doubled and the cost of administering the tax system has increased by at least 75 per cent.



PUBLIC DEBT: Since the Government's commitment to match Conservative spending plans expired in 2000, public debt has risen by 5.1 percentage points of GDP. When public sector pensions, PFI debt, nuclear decommissioning, Network Rail and Northern Rock are taken into account, actual Government liabilities total £1,898 billion - a massive 129 per cent of GDP.



PENSIONS: Gordon Brown's infamous tax raid on pensions has cost private pension funds between £100 - £150 billion through lower dividends and reduced growth. As a result, the number of private sector workers with pensions has fallen 41 per cent in the last 12 years. If the rate of decline were to continue, there would be no active members of private pension schemes in just 12 years' time. At the same time, the number of public sector workers with largely unfunded defined benefit pensions has increased by 1 million since 1995. The estimate of public sector pension liabilities now stands at over £1 trillion - almost £40,000 per household.



PUBLIC SERVICES: Despite vast increases in spending on the NHS since 1997, the rate of improvement in performance has not increased. Similarly, despite large increases in schools spending Britain's international standing in education has fallen across the board, whilst the number of young people not in employment, education or training has risen against the international falling trend. Spending on law and order has risen substantially, but recorded crime has risen by 9 per cent whilst violent crime has leapt 275 per cent in the last ten years.



BUDGET DEFICIT: Between 1997 and 2008 the UK went from having only the 13th largest budget deficit in the developed world to having the 5th largest. Treasury forecasts have consistently proved to overestimate tax receipts and underestimate public spending over-runs.



INFLATION AND INTEREST RATES: In the last ten years, the British rate of inflation and interest rates have been on average higher than those in the USA and the Eurozone, suggesting that the low rates we have experienced are more an effect of international conditions than Government policies.



PRODUCTIVITY: British workforce productivity continues to lag behind that of many other countries, and the rate at which the UK was catching up has slowed since 1997. In the NHS, productivity fell by 2 per cent a year between 2001 and 2005, a far faster rate than between 1995 and 2000.



TRANSPORT: Public spending on transport has more than doubled in the last decade, but the UK still has fewer miles of motorway per car than all other major EU economies.



WELFARE: The complexity and cost of the welfare and benefits system has boomed under Gordon Brown. This is undermining incentives to work, shown by a 147 per cent rise in the number of people who lose 60 per cent or more of any increase in their income through taxes and lost benefits. People are increasingly being trapped on benefits.



The full report assesses many areas of Gordon Brown's economic record, and can be found here.



Matthew Elliott, Chief Executive of the TaxPayers' Alliance, said:


"For all Gordon Brown's boasting, his economic stewardship has failed people on every count. Ordinary taxpayers have seen their bills rise and rise but our services have not improved in return. With the credit crunch tightening its grip, it's clear that the country is poorly prepared for tough economic conditions, and it is Gordon Brown who is to blame. He has pursued flawed policies, wasted taxpayers' money and further complicated a government structure which is chaotic and in dire need of reform."

On the eve of the Labour Party Conference, and with the City in turmoil, an explosive report from the TaxPayers' Alliance (TPA) demolishes what is left of Gordon Brown's reputation for effective economic and public sector management. Using detailed international comparisons and official statistics, the report reveals that in terms of economic growth, workforce productivity, tax levels and complexity, inflation, pensions, energy policy, public service quality, value for money, real disposable income, national debt, welfare dependency and other key measures, Britain's performance has been poor across the board as a result of Gordon Brown's policies.


Far from being better prepared to weather the credit crunch thanks to his good governance, as the Prime Minister claims, our research suggests that the Government pursued numerous ineffective policies over the last decade that have left Britain more vulnerable to the downturn than our international competitors. The full report can be found here.



PLUS: INTERNET GAME LAUNCHED - THE BROWN CALCULATOR



To accompany the new report, the TPA proudly presents The Brown Calculator, an online Flash game which allows you to do some maths - the Gordon Brown way! Try out any sum you fancy; the answer you get might not be what you expect, but it will reveal a key aspect of Gordon Brown's economic record. The Calculator is the first stage of a large new TPA campaign that will employ new media, social networking sites and Web 2.0 to drive home the message of low taxes and better government. The calculator can be found at www.browncalculator.com. If you would like to link through to the calculator, the downloadable button (see right) and the button's HTML for your web site are here.



KEY FINDINGS



ECONOMIC GROWTH: Whilst Britain has outperformed our European neighbours, all other English-speaking wealthy countries have seen faster growth since Gordon Brown became Chancellor. Had Britain matched US levels of growth since 1997, the UK's GDP would have been £14 billion higher by 2006.



TAX REGIME: Since 1997, the tax burden has increased in real terms by 51 per cent, placing an unsustainable burden on ordinary families and drastically slowing the rate of growth in disposable income. Government spending as a percentage of GDP has soared above the OECD average, corporate tax has remained high whilst competitors have introduced successful cuts, the size of the British tax code has doubled and the cost of administering the tax system has increased by at least 75 per cent.



PUBLIC DEBT: Since the Government's commitment to match Conservative spending plans expired in 2000, public debt has risen by 5.1 percentage points of GDP. When public sector pensions, PFI debt, nuclear decommissioning, Network Rail and Northern Rock are taken into account, actual Government liabilities total £1,898 billion - a massive 129 per cent of GDP.



PENSIONS: Gordon Brown's infamous tax raid on pensions has cost private pension funds between £100 - £150 billion through lower dividends and reduced growth. As a result, the number of private sector workers with pensions has fallen 41 per cent in the last 12 years. If the rate of decline were to continue, there would be no active members of private pension schemes in just 12 years' time. At the same time, the number of public sector workers with largely unfunded defined benefit pensions has increased by 1 million since 1995. The estimate of public sector pension liabilities now stands at over £1 trillion - almost £40,000 per household.



PUBLIC SERVICES: Despite vast increases in spending on the NHS since 1997, the rate of improvement in performance has not increased. Similarly, despite large increases in schools spending Britain's international standing in education has fallen across the board, whilst the number of young people not in employment, education or training has risen against the international falling trend. Spending on law and order has risen substantially, but recorded crime has risen by 9 per cent whilst violent crime has leapt 275 per cent in the last ten years.



BUDGET DEFICIT: Between 1997 and 2008 the UK went from having only the 13th largest budget deficit in the developed world to having the 5th largest. Treasury forecasts have consistently proved to overestimate tax receipts and underestimate public spending over-runs.



INFLATION AND INTEREST RATES: In the last ten years, the British rate of inflation and interest rates have been on average higher than those in the USA and the Eurozone, suggesting that the low rates we have experienced are more an effect of international conditions than Government policies.



PRODUCTIVITY: British workforce productivity continues to lag behind that of many other countries, and the rate at which the UK was catching up has slowed since 1997. In the NHS, productivity fell by 2 per cent a year between 2001 and 2005, a far faster rate than between 1995 and 2000.



TRANSPORT: Public spending on transport has more than doubled in the last decade, but the UK still has fewer miles of motorway per car than all other major EU economies.



WELFARE: The complexity and cost of the welfare and benefits system has boomed under Gordon Brown. This is undermining incentives to work, shown by a 147 per cent rise in the number of people who lose 60 per cent or more of any increase in their income through taxes and lost benefits. People are increasingly being trapped on benefits.



The full report assesses many areas of Gordon Brown's economic record, and can be found here.



Matthew Elliott, Chief Executive of the TaxPayers' Alliance, said:


"For all Gordon Brown's boasting, his economic stewardship has failed people on every count. Ordinary taxpayers have seen their bills rise and rise but our services have not improved in return. With the credit crunch tightening its grip, it's clear that the country is poorly prepared for tough economic conditions, and it is Gordon Brown who is to blame. He has pursued flawed policies, wasted taxpayers' money and further complicated a government structure which is chaotic and in dire need of reform."

Latest Blogs:

TaxPayers' Alliance Icon

Working for the taxman

6:00 AM 26, Nov 2016 Harry Fairhead

TaxPayers' Alliance Icon

Further thoughts on the Autumn Statement

4:56 PM 24, Nov 2016 James Price

TaxPayers' Alliance Icon

Have we had too much austerity?

10:57 AM 23, Nov 2016 Alex Wild

TaxPayers' Alliance Icon

Launch a War on Waste and simplify taxes

9:45 AM 23, Nov 2016 The TaxPayers' Alliance

TaxPayers' Alliance Icon

Reforming capital taxes

6:00 AM 19, Nov 2016 Harry Fairhead