The wisdom of the coalition looks more settled now. I think that this is because Britain continues to retain it’s high credit rating whilst other nations have seen theirs slide. That means that the cost of our national borrowing is still relatively low. The conundrum now is how we stimulate recovery.
It was interesting to hear Labour MPs admitting ‘past mistakes’ at their conference. It seems to me that they made one huge one. Gordon Brown once famously claimed the end of ‘boom and bust.’ In actual fact, he presided over an almighty boom which was inevitably going to be followed by a bust of matching proportions.
Successive goverments of all hues have always made the same, fundamental economic mistake: they never apply the brakes when the economy is booming. The result is that they then have to apply the squeeze when we are already suffering from recession.
Gordon Brown could have told lenders to limit credit, for example, when experts were warning us about huge levels of personal debt. He could have outlawed 125% mortages – since they were clearly an insane business model which led directly to the collapse of lenders like Northern Rock.
As a Liberal Democrat, I have to hope that the long view is that we have been acting responsibly.
Labour still have many questions to answer, and only kneejerk responses to efforts to mop up the mess.