Brown left UK finances “ill-prepared for crunch”

The Institute of Fiscal Studies (IFS) said Gordon Brown’s management of the
economy as chancellor left the UK in “one of the weakest fiscal positions in
2010,” according to
the
Guardian.

The report stated that the government under chancellor Brown “put the UK’s
finances in a better shape before the credit crunch” than the Tories had prior
to the 1990 recession and “cut the level of borrowing and debt inherited from
the Conservatives in 1997”, but still left Britain’s finances in a weaker
position to weather the crunch than other G7 or OECD countries.

The IFS said: “While the UK public finances were in better shape when the
financial crisis began than they were when Labour came to power, the UK was in a
worse position relative to most comparable countries.”

“Most OECD governments did more to reduce their structural deficit during the
period from 1997 to 2007 than Labour did. This fiscal position formed the
backdrop to the financial crisis.”

Group chief economic adviser Peter Spencer said the UK will “struggle to
achieve growth of 1% this year”, although believes that growth of 2.7% is
possible next year. However, he added, consumer spending is only expected to
grow 0.5%. “Households are drowning in debt but companies are swimming in cash,”
he said.

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