Its pretty much conventional wisdom to say that New Labour left the British economy in an appalling mess. The Conservative Party and its supporters in the right wing press never tire on saying so.. However, those of us with longer memories and with fewer reasons for rooting out bogeymen everytime we see a problem, should not accept without question this very comfortable narrative.
Firstly, we should recall the economic crash was principally a failure of the market. Adair Turner, head of the FSA, described it as perhaps being the ‘biggest crisis of free market capitalism’ ever. Secondly, the crash was a global economic one and not unique to the UK.
These two points are vital when trying to fully understand what happened. A properly balanced history of New Labour’s economic performance should recognise that there is little evidence to suggest that the Tory party would have either avoided the crash or would have done anything that make the UK better prepared to deal with its consequences.
One of the main thrusts of he arguments coming from the Consevatives is that there was insufficient regulation of financial institutions. Better regulation certainly would have helped us to avoid some of the outcomes; of this there can be little doubt. However, the question we have to ask is whether or not the banking sector would have been adequately regulated under the Conservatives. I think not.
Neither does the admirable Deborah Orr
In and opinion piece she wrote for The Guardian in December 2012, entitled “Why are the Tories laughing? Because they’ve got away with it yet again”, she says:
The Conservatives have had awesome success in promulgating the nonsensical idea that the crash was caused by Labour incompetence and overspending, when it was really caused by Labour’s failure to tackle the neoliberalism introduced by the previous Tory administration. Genius. Not only do the Conservatives fail to take responsibility for the results of the banking deregulation that their party “masterminded”, they also manage to look as though they are the poor sods picking up the pieces after a socialist failure. That’s such good insurance, too. They can carry on saying, for a while yet, that the problem they inherited was huge. And they’re right. It was huge, because it had been being stoked up since the Big Bang 26 years ago.
How do we explain the “awesome success” the Conservatives are having in continuing to lay the blame for everything at Labour’s door?