There is an inevitability in politics that your unguarded, or for that matter your carefully delivered words will come back to haunt you. Here are some of Gordon Brown’s.
In his 1997 Budget speech, Gordon Brown said, “I will not allow house prices to get out of control and put at risk the sustainability of the future”. He went on to say that he did not want a return to ”instability, speculation and negative equity” of the 1980’s and 1990’s.
Now lets remind ourselves of what has actually happened. In the 10 years from 1997 to 2007, the average house price rose by some 200%, even higher in some areas. During the same period, average earnings rose by just 52%. The price rises were as a direct consequence of the free flow of easy credit, low interest rates, an explosion in ‘buy to let’ schemes pushing limited housing stock even higher, lenders taking much higher risks with loan to value (ltv) mortgages often approaching 125% and multiples of 6 or 7 times salaries used to calculate a homeowners ability to pay.
Gordon Brown knew what was going on and in spite of his assurances that he would not allow it to happen, that is precisely what he did. Everyone was telling him that is was not sustainable, he had studied the effects of the same problem experienced under the previous Tory government and he still chose to do nothing. A sceptic may surmise that he knew the economic growth, for which he claimed credit, was built on the back of easy credit, reckless lending and property equity releases.
Now we are witnessing monthly falls in price prices, often of 2%, a return to negative equity and rising house repossessions. Furthermore, with the rise in inflation, the bank of England are virtually powerless to do anything for the borrowers in terms of rate cuts. The bottom line is the so called ”iron chancellor” failed in his commitment to the people of this country.
Gordon Brown and some of the press would argue that Gordon Brown is the best qualified person to sort out this mess. I would argue, that unless, or until he can admit his responsibility in this fiasco, rather than blaming everyone else, he is probably the least qualified. The public can forgive mistakes and take account of incompetence, but they will never understand delusion.
September 19th, 2008 at 2:24 am
This is the problem with politicians, they only have four year terms so rarely plan further ahead than the next election. I am sure Gordon was well aware of the consequences of what was happening but was hoping that it wouldn’t go pear shaped during his tenure.
September 19th, 2008 at 8:45 am
I agree Charlie 180, he did once say that there were two types of Chancellor, those that failed, and those that got out in time. I guess he loses on both counts, even if he is currently the PM. He is being judged harshly, but perhaps, if he was man enough to admit that he (and his party) has some responsibility for where we are today, the British public would be more forgiving and provide him with more time to get it right. That does not appear to be his mission.
October 14th, 2008 at 3:04 am
He fights, swings claims and then watches as the property market takes yet another downturn. House prices are out of control, over the past 12 months I have seen many people watch as their properties devalued quicker then a speeding bullet due to the unstable economy.
So much for holding out on the property prices Gordon!
October 20th, 2008 at 12:40 pm
Unfortunately to achieve what Brown promised would require inflation to be dampened in the good times to prevent a bubble, and not to try and support prices once the bubble busts (futile).
A boom means popularity for the government, in the sort term anyway. They will never risk tempering it.
July 7th, 2010 at 10:13 pm
Gordon Brown just didn’t change nothing he just made it difficult for us to manage.