UK Labour Election 1997 & Todays Debt

Audit Commission chief executive Steve Bundred, who is in charge of monitoring how taxpayers' cash is used, said the next Government could face an economic Doomsday scenario.

It would immediately have to start paying back cash Labour has spent bailing out banks and trying to pump life into the economy.

National debt would otherwise add up to 65 per cent of Gross Domestic Product by 2010-11.

He added: "At that scale of indebtedness, the Armageddon scenario most feared by the Treasury - that there will be insufficient lenders to match the planned level of borrowing - begins to look a distinct possibility."

An all-round collapse in lending caused by over-borrowing would leave families, businesses and the Government with no credit at all.

Britain would be forced to turn to the International Monetary Fund for a bail-out, which it might not be able to provide. In effect, the UK would be bankrupt. Before the downturn began, total public debt was just 36.3 per cent. The EU caps member states at 60 per cent.

Mr Bundred added: "That's why tax increases and spending cuts are inevitable immediately after the election, assuming that there are signs of economic recovery by then."

He said in a newspaper article that the Government had already breached internationally agreed definitions of "reckless" fiscal policy.

Compared with what lies in the future, earlier recessions like the 1970s could "look like days of wine and roses quite soon".

Mr Bundred warned: "Any managers of a public service who are not planning now on the basis that they will have substantially less money to spend in two years time are living in cloud cuckoo land."

Shadow Treasury Minister Greg Hands said: "This is yet more evidence of how Gordon Brown did not fix the roof while the sun was shining and why the country desperately needs a Government that will ensure both fiscal discipline and spending restraint."

Westminster observers noted that Mr Bundred's outspoken attack was the third from a senior economist against Mr Brown this week.

And they pointed out that the fact such figures were now publicly prepared to pin the blame for Britain's economic meltdown on Mr Brown was the clearest indication yet that senior Establishment figures believe he faces a heavy election defeat.

Mr Bundred's attack came just hours after the Governor of the Bank of England, Mervyn King, also warned that Mr Brown had allowed debt to spiral out of control.

The Treasury has already said that that Government debt will go over £1trillion in 2012. But bank bailouts, the VAT cut and less coming in as tax will push it far higher.

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News & Politics

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• uk
• election
• 1997

[thedavewalkershow]

@lukespencer91 blair built the NHS,THE SCHOOLS AND MANY OTHER PROJECTS on a lend and lease policy over 12 years borring billions the country did not have .most of these projects costing 10 times the real value over the next 40 years which is how long it will take to pay the interest on the loans labour took out.the loan companys have now set up off shaw companys so britain dose not evern bennifit from the taxs on the massive proffits they are making off the loans.

[lukespencer91]

I don;t think you remember the lack of investment in the services which labour took over in 1997, thats why we had to spend more, to clean up the services the conservative messed up like the NHS, You can;t trust a tory on the NHS.

[TheBlackWhirlwind]

@lukespencer91

No we would not be in this mess. When the Tories left office in 1997 the books were balanced and Britain was *not* in debt. The Tories also left us with the healthiest pension fund in Europe, which Gordon Brown raided whilst Chancellor to support Labour inordinate and profligate spending.

I sometimes think that this country is now getting what it deserves for its apathy and ignorance. How can people be so easily duped? It makes me want to weep for this once great nation.

[TheBlackWhirlwind]

@stef1652

It was laughable back then, but unfortunately most people were either too stupid to see it, or simply didn't care. I never voted for the socialist bastards.

[GamerYetPolitical92]

Labour introduced record spending

A bigger NHS budget yet hospitals where closed and mangers where raised beds where sold and equipment unused for years only to be thrown away

and for education my school was falling to bits full of broken bricks shortage of tables and chairs

LABOUR FAILED THIS COUNTRY AT LEAST UNDER THE CONSERVATIVES

1979 - 1997 We had ups and downs with the economy but always returned to normal within months we had low but fair spending and low taxes

[BRUTUALTRUTH]

Things can only get BITTER!

[stef1652]

laffable now.

[stef1652]

wankers