Say Hello To Ramsey MacDonald, Your New Tory Leader

The Tories have announced their new ‘We’re not just an inexperienced version of Labour’ policy agenda, and no one really likes it. Their core idea to save the economy circa now = don’t cut taxes and spend less. 69 years ago someone else came up with the same bright idea to get Britain through a large economic downturn, and it worked so well the country slumped into full scale depression for a decade (apologies here for quoting Wonkipedia):

“In May 1929 a minority Labour government headed by Ramsay MacDonald came to office. …[F]ew of the government’s members had any deep knowledge of economics or experience of running the economy. MacDonald’s Labour Party was not radical in economic thinking, and was wedded to the orthodoxy of Victorian classical economics with its emphasis on maintaining a balanced budget at any cost.”

Along with his sidekick Philip Snowden, Ramsay introduced emergency budget measures in 1931 that cut 10% from public sector wages and benefits, while also increasing income tax. What did that do? It decreased spending power, increased unemployment, and sent the country into the gutter.

Perhaps that’s why Mervyn King (Bank of England govenor), Miles Templeman (director-general of the Institute of Directors), Richard Lambert (director-general of the CBI), Steve Radley (chief economist at the EEF manufacturers’ body) and The British Chamber of Commerce all advocate doing the exact opposite of the Tories new plan.

Posted by Becky North in Other | November 19, 2008 12:51PM |