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Paul T Horgan: Never fall for Labour’s “Big Lies” about its responsibility for the crash

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Labour has several theories as to why it lost the election, some of which are mutually exclusive. Here are just a few:

  1. The strongly negative electoral appeal of Ed Miliband
  2. The deliberate failure to engage voters beyond Labour’s core support
  3. Threatening tax rises on modest earners
  4. Invading Iraq
  5. Voting against invading Syria
  6. Economic mismanagement while in government, including: ramping up the national debt while in office, failing to acknowledge their part in this, promising to do it again
  7. Not being left-wing enough
  8. Being too left-wing
  9. Being anti-business
  10. Being austerity-lite 
  11. Being anti-austerity
  12. Being too close to the unions
  13. Being seen as able to let the SNP into government
  14. Being soft on immigration
  15. Having a mug promising ‘controls on immigration’
  16. Sneering at English pride
  17. Harriet Harman and her pink bus

Of these the strongest was Labour’s responsibility for the recession that accompanied the 2008 financial crisis and the fact that Labour was running a deficit even in economically beneficial times. The latter is summed up by the accusation that it did not ‘fix the roof while the sun was shining’.

Labour also forgot to talk about the deficit, literally. Ed Miliband decided to speak without notes at his final party conference as leader to convince the British people to vote for him because of his allegedly prodigious memory. Instead he had a bacon sandwich moment of the brain.Labour also refused to apologise or take any responsibility for the impact of the 2008 global financial crisis on the UK, even when its leaders were directly challenged to do so.

This killed them in the polls in England.Instead of owning up to the past, Labour’s leadership candidates have decided to use the Big Lie, well actually two of them. There is historical evidence that Big Lies work and has worked very well indeed for other socialist parties. 

The first Big Lie is that ‘Labour was not responsible for the global financial crisis’, so they should not have to apologise. This is Labour’s standard response to the economic disaster that our grandchildren will be paying for thanks to typical socialist incompetence.

The second Big Lie is that if running a deficit meant paying for free education and health care, then so be it, Labour is proud of their deficit spending, not ashamed. The ends justify the means. More typical socialism.

To start with the first Big Lie, No-one is actually accusing Labour of being responsible for the global financial crisis, and they never have. Labour uses this defence as a stock response to any mention of Gordon Brown’s record as Chancellor or Prime Minister. This is classic political misdirection.

Labour is, however, directly and completely responsible for the British financial crisis, as it was the Government of the United Kingdom at the time and had been for eleven years before the crisis hit. Although we are a top 5 global economy, Britain having a financial meltdown will obviously not cause businesses to fail in Baltimore or Beijing. However the fall of Lehman Brothers in the USA triggered the serial collapse of the UK banking sector, and this was on Labour’s watch.

People are not actually blaming Labour for SS Great Britain for hitting an American iceberg. However Labour is responsible for not having enough lifeboats for all of the people and for failing to ensure that the economy was watertight when gashed below the waterline.

Labour is directly responsible for incompetent regulation of the banks that failed en masse through its creation of a weak regulator in the form of the Financial Services Authority that allowed itself to be staffed with the bankers it was meant to regulate. Now Labour blames these bankers but is conveniently ignoring its own part in the disaster. Gordon Brown was meant to be overseeing the bankers, not the other way round.

This would not have matter had it not been for Labour’s economic policy using the financial services sector as the cash cow for their spending plans and there being no contingency should the sector catch a cold. The ‘Iron Chancellor’ was also running a deficit during the boom years caused by weak regulation. Even Chile under the socialist hate-figure General Pinochet had a stabilisation fund built up in the good times. Britain under Labour had no choice but to increase the national debt in the both the good and lean years. The economic devastation to Britain, its people and unborn generations is equivalent to that of a major war. We have been weakened as a country.

The incompetent regulation of the banks introduced by Labour under Brown saw Royal Bank of Scotland having a CEO and Chairman, who had no banking qualifications, over-expanding the bank with catastrophic takeovers until it ran out of money to operate properly. It also saw James Crosby, the CEO of HBOS, firing his board-level risk manager and adding a number of dodgy borrowers to its loan book until it had an unmanageable loan impairment rate.

This under-regulated mismanagement was so ridiculous to me that, before Crosby was stripped of his knighthood, I made a computer-animated cartoon about it. The regulator also backed away from prosecuting bankers for accounting misstatements at Northern Rock, instead opting for a fine and a ban. I made a cartoon of this nonsense as well.Gordon Brown made specific pledges for an ‘end to boom and bust’.

He unashamedly broke these and then blamed foreigners for the fine mess he had gotten us into and expected to be re-elected. Labour, for some reason, do not expect to be punished at the polls for this bogus promise.Portrayed as the ‘Iron Chancellor’ by his propagandists, Brown’s economic policies floated on taxes raised on the criminally negligent profit-seeking of the banks because Brown could not tell the differences between laissez-faire, light-touch regulation and regulatory capture.

Brown was just a below-average Chancellor, a ditherer unable to manage events, and has to be without doubt the worst Prime Minister we will have in the 21st Century. Any credit he deserves for what he described as ‘saving the world’ has to be tempered by the hard fact that most problems can be solved to some degree by throwing stupendously huge amounts of borrowed or artificially-created money at them.

But Labour is not sorry for the Brown Mess it left the country to deal with.Labour is, however, promising to apologise to the Iraqi people for its record. Clearly there is a queue the British people could join here.

The second of Labour’s Big Lies is that running a deficit is something to be proud of if the money is spent on good causes, like building new school and hospital buildings. A variation of this is that paying for more doctors and nurses and teachers is always money well spent, no matter what.

By the end of the Labour government, wealth-consuming state-sector workers were being paid more than their wealth-creating private-sector counterparts. There were also considerably more of them. They were not just doctors, teachers and nurses, but expensive additional layers of bureaucrats, especially in the NHS, hired to manage all the extra cash.

Labour typically confused jobs with work, believing that a Stakhanovite mining of additional human resources was an end in itself. Also, if you assemble a sufficiently large pile of taxpayers’ and borrowed cash, it will not spontaneously convert into a nurse or a doctor, but Labour never understands this, which is why the UK depletes other countries’ medical teams instead of training and educating our own. This requires proper governance. What matters in any case is, in fact, outcomes. Labour falls down badly on this.

At the same time as Labour was shovelling piles of money into the NHS, patients were dying of abuse and neglect at Mid-Staffs. More than £11 billion was wasted on a failed NHS computerisation programme. The Labour movement always objects to new technology, so perhaps it was doomed from the start as automation could put the unionised clerical workers who maintain paper files out of a job.

While Ed Balls was running his ‘Building Schools for the Future’ programme, there was exam grade inflation that failed to conceal Britain sliding down the OECD education standards tables. Employees enjoying pay rises in numerous local authorities looked the other way while girls in their care were targeted by rape gangs.

The extra cash did not fix any of these, indeed Mid-Staffs was actually running a deficit during the period of largesse, so the spending Labour is keen to defend was not actually going on front-line-services. What was needed during the boom years was competence. Labour’s continuing worship of state-sector workers over genuine wealth-creators prevented this. Tony Blair promised state-sector reform before 9/11 diverted his energies.

The hospitals and other new buildings were being constructed with money raised under the private finance initiative, a scheme vastly expanded under Labour, which uses an expensive accounting method in the same vein as those employed by Enron and Greece to conceal liabilities by repackaging them so they are evaluated differently. It is all a costly sleight-of-hand used to mislead auditors. But we will all have to pay for this in the years ahead.

So Labour do, in fact, have a lot to apologise for.

But should they? I do not recall Winston Churchill apologising for the Conservatives’ role in appeasement – although he was always less than complimentary about Stanley Baldwin – still less his returning Britain to the Gold Standard. Macmillan did not apologise for Suez. Margaret Thatcher did not apologise for Edward Heath’s three-day week or for his mismanagement of the union militancy with his ridiculous Industrial Relations Court. She just took terrible revenge on the forces that brought down his government.

Major did not apologise for the community charge. To get elected in 1997, Blair did not need to apologise for the 1967 devaluation, winter of discontent or Labour needing an IMF load to stave off national bankruptcy. But it was Blair who started the fashion for governmental apologies when he showed contrition for the government’s response to the Irish potato famine, despite the curious fact that the Labour Party did not actually exist at the time. Since then there have been numerous acts of official revisionism unassociated with the outcome of recent inquiries as well as pardons for people executed or persecuted in the past by the State or the subject of historic official incompetence. People are now expecting apologies. It has entered our political culture.

Perhaps politicians should not apologise. Voters should be left to punish parties at the polls for past misdeeds even if they are really sorry and promise to do better next time. That’s politics. The Conservatives scraped home with a 21-seat majority in 1992 after voter dissatisfaction over the government’s economic and taxation policies. They were slaughtered in 1997 and kept out of office for 13 years, 18 if you do not count the coalition. I do not think any kind of apology would have arrested the decline in electoral fortunes or triggered a revival.

Denouncing past governments of your own party still seems unnatural in British politics. Labour lost for a variety of reasons this year, but failing to apologise was not one of them. Acknowledgement is a different matter. Had they had a policy that recognised that virtue does not come from spending other people’s money but instead from competent governance they may have had a chance, but then they would have ceased to be the Labour Party. They need to work out how a democratic socialist government can function when there is no money left instead of covering up their past with Big Lies.

Saying sorry should not be a vote-winner. Neither should using the Big Lie technique, as Labour is doing now. The crash of 2008 reset British politics. Labour needs to reset itself as well.

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Paul T Horgan
Paul T Horgan works in the IT Sector. He lives in Berkshire.

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