Looks like he ran out of fudges: the UK will break European borrowing guidelines soon. While the rules are designed to keep the Euro stable – and Britain’s not in the Eurozone – any major deviation by an economy the size of Britain’s will affect the zone’s stability. Especially with so many countries on the edge; at least a dozen are in technical or overt breach of the S&GP.
More so than just after the election – when Blair et al won what’d normally be considered a landslide, yet suffered weeks of doom and gloom as pundits pondered all the seats he lost – this, I think, is the real beginning of the end for the New Labour project. I sense Brown’s support starting to ebb.
After all, a trained monkey would’ve made a better Chancellor better than Brown. Somehow he’s turned a £50bn surplus and a constantly growing economy into a £20bn hole in the public finances, despite raiding pensions and raising taxes everywhere.
Perhaps I’m being too hard, though. Chancellors aren’t project managers, they’re project administrators who think they’re project managers. (An administrator’s job is to note things down; a manager’s is to make things happen.) Any influence they have on the UK economy is at best minimally positive and more often disproportionately negative. As that little tussle with the ERM (that ended John Major’s PMship) proved, the weight Britain’s government can bring to bear on the economy (a few clumsy billions) mean nothing when trillions move through world markets day by day, finding homes and influencing development faster and more efficiently.
As with other areas of government, the best thing it can do for the economy is to get out of the way. Unfortunately, no Chancellor of any colour is ever likely to realise it.