Tories No Better Than Labour On Managing the Economy

9.51.00pm GMT Sat 31st Jan 2009

Labour and the Tories have both failed with the economy

This week, the respected independent research organisation, the Institute for Fiscal Studies released their forecast for UK's public finances. Interestingly, they showed that Labour and the Conservatives are just as bad as each other at managing the UK economy.

Charting the UK's progress, they demonstrated the structural budget balance had risen from minus 5% of national income under the Tories to 1% after three years in government from 1979, but then fell back to minus 3% after eleven years. It then fell to minus 5% after 14 years, closing at minus 3% again after 18 years. Everyone remembers the Conservatives' humiliating failure with Sterling and the Exchange Rate Mechanism (ERM).

And guess what. Under Labour the structural budget balance started at minus 3% in 1997, rose to 1% again after three years, but then fell back to minus 3% after eleven years. The Institute for Fiscal Studies now forecast that the balance will fall again to minus 7% after thirteen years before closing at minus 3% again. And so no better than where they started.

So neither party left the public finances in a healthy position after many years in government. It may be said they both made the very grave error of moving from 'prudence to hubris to nemesis'.

After seeing so much crisis and failure, its now time to give Lib Dem leader Nick Clegg and the very well respected Lib Dem Shadow Chancellor Vince Cable and colleagues a chance. After all, Britain's success and economic strength was built in the first place on Victorian Liberalism.