[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Monday, 14 June, 2004, 23:02 GMT 00:02 UK
Head to head - Gordon Brown
Ian Brinkley (left) and Digby Jones (right)
Ian Brinkley (left) and Digby Jones (right) debate Brown's record
The Trades Union Congress (TUC) and the Confederation of British Industry (CBI) go head to head in a debate over what Gordon Brown has achieved in his post so far.

Talking over the pros and cons of his record as the longest-serving Chancellor are Digby Jones, head of the CBI, and TUC chief economist Ian Brinkley.

Digby Jones, director general of the CBI

To his lasting credit, Gordon Brown has delivered a stable, predictable economy with sustained growth, low unemployment, low inflation and low interest rates for seven years. That is a major achievement.

Giving the Bank of England independence and the responsibility for setting interest rates is easy to take for granted now but it was an incredibly courageous thing to do.

The move was backed by business and the MPC has been hugely successful.

I'm absolutely convinced that he means it when he says he wants to make Britain a skills-based, enterprise-based economy.

But he is also a taxing and tinkering chancellor and he will not win business support by giving with one hand and taking with the other.

  • We reckon that business has paid an extra 50bn in tax over the past seven years. And the worry is that there is more to come.

    Firms will be utterly disillusioned if there are more tax rises.

    A decision to outsource overseas has many factors behind it and the level of business taxation is one of them. It is in everyone's interest that Gordon Brown listens to business and develops a tax system that will ensure that the UK remains a good place to do business.

    It is also critical that the Chancellor's campaign for economic reform in the EU is as successful as his management of the UK economy.

    He's got to move the EU's "regulate first think second" mentality which has been so damaging to the competitiveness of the European economy.

    Ian Brinkley, chief economist of the TUC

    Gordon Brown's tenure as chancellor has so far been one of the more successful in British post-war economic history.

    In 1994, TUC talk of getting back to full employment was derided as a pipe dream.

    In 2004, as unemployment falls below 5%, we are approaching full employment nationally. In much of non-metropolitan Southern England full employment is a reality.

    The trick has not been to drive down unemployment.

    Any fool can do that by pumping enough demand into the economy (as the Lawson boom of late 1980s showed).

    The real challenge has been to keep unemployment heading down without triggering a massive surge in inflation.

    Innovation in the macro-economic policy framework has had a key role. Independence for the Bank of England and the establishment of a clear set of fiscal rules have given us a monetary and fiscal policy framework capable of delivering economic stability.

    Innovation in labour market policy has also been a key feature of the Chancellor's tenure.

    New Deal has been one of the most successful large scale labour market programmes in an area littered with costly make-work schemes.

    And the tax credit system backed by the minimum wage has made work pay and encouraged people to take less well paid jobs without losing out.

    Both have helped bring many more people back into the labour market just as the pace of job creation was picking up.

    The chancellor has proved that policies for economic prosperity and policies for fairness can be introduced side by side.

    We have seen substantial reductions in poverty among families and pensioners since 1997 through tax-benefit reform, the minimum wage, and the return of full employment.

    It has been households in the bottom third of the income distribution who have benefited most from the chancellor's policies.

    Investment in the NHS to match the best in Europe may come to be seen as one of the most enduring successes of the Chancellor's tenure.

    Historically, previous Governments have matched the current rate of spending for a year or so - often in the run up to an Election - only to cut back as soon after. But sustaining such high levels for so long is an unprecedented achievement.

    Of course, all of these achievements can be qualified. The chancellor had the good fortune to succeed another successful chancellor, Kenneth Clarke.

    He had even better luck to inherit a benign world economy that has remained more or less benign throughout his tenure.

    And for all the success in the labour market on the overall numbers, major concerns about the quality of work remain - not least in the prevalence of excessive working hours and low productivity.

    Yet any chancellor whose term of office includes the near restoration of full employment, serious in-roads into poverty and one of the biggest ever investment programmes in the NHS must have something going for them.



  • SEE ALSO:
    Budget or bust? Test your skills
    14 Jun 04 |  Newsnight


    RELATED INTERNET LINKS:
    The BBC is not responsible for the content of external internet sites


    PRODUCTS AND SERVICES

    News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia
    UK | Business | Entertainment | Science/Nature | Technology | Health
    Have Your Say | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
    Americas Africa Europe Middle East South Asia Asia Pacific