[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Sunday, 18 March 2007, 17:37 GMT
What has Mr Brown achieved?
BBC Economics Editor Evan Davis
ANALYSIS
By Evan Davis
BBC economics editor

Gordon Brown
It was Mr Brown who gave the Bank of England its independence

As we prepare for Gordon Brown's 11th and last Budget, this week is perhaps as good a chance as we'll get to take stock and analyse his overall record as chancellor.

After all, when he leaves his current post, we will undoubtedly be looking forwards to a whole new era in politics, so we will probably lose the chance to look back over his reign at Number 11.

So how has he done in his mammoth 10-year chancellorship?

Interestingly, it seems to me that of all the things Mr Brown will be remembered for, it will not be his budgets.

BROWN'S BRITAIN
A guide to the British economy under Gordon Brown

Firstly, he tends to pack his speeches with long lists of small detailed measures, and he frequently uses the budget occasion to remind us of his previous achievements, most of which are familiar.

So they have not been as radical or as strategic as those of say, Nigel Lawson; they have been less enjoyable to listen to than those of Kenneth Clarke.

No break

Secondly, where he has been very radical in his budgets, it has been in redistributing billions of pounds to low-income families through tax credits.

Even if his budget speeches can be dull, Gordon Brown has been managing the economy

But as Mr Brown invented tax credits and then reinvented them under a confusing array of different names, it was easy to dismiss or miss them as too baffling to be important.

And then thirdly, many of the other measures announced in the budgets have involved forgettable, small scale micro-economic tinkering: tax relief for employer-loaned computers, for example, in Budget 1999.

Or the removal of VAT on adult cycle helmets in 2001.

There have been a lot of such measures, many under the laudable heading "Meeting the Productivity Challenge".

But in terms of altering the supply-side performance of the UK economy, they don't seem to have made very much difference.

Productivity has improved under Gordon Brown, but the performance has not represented a break with Britain's long-term performance.

Independent bank

Finally, on the theme of budget speeches, Mr Brown's fiscal record has been very mixed. The prudence of the first parliament has been more than used up in the second two, where the borrowing has just persisted long after it was meant to.

So unfortunately, the most memorable feature of Mr Brown's fiscal performance on Budget days is his repeated insistence on reading the borrowing figures so quickly that no-one can hear how bad they are.

But if Mr Brown's Budget speeches are less than vintage, that's not true of his stewardship of the economy overall.

It has been a memorable period for Britain and especially for a Labour chancellor.

And what is most obviously striking about his period is the performance of the macro-economy.

The record on growth and inflation is strong, even if the Bank of England must take some of the credit.

Chancellors from Lawson to Lamont to Clarke had toyed with the idea of making the Bank independent. Gordon Brown actually did it.

Strong sterling

The growth performance has been helped by two international factors: a big influx of migrant labour; and cheaper Chinese and central European imports that have allowed spending in the British economy to grow slightly faster than in the past, without inflation emerging.

However, these recent macro-economic events have made for some paradoxical outcomes to Mr Brown's period as a Labour chancellor.

As for so many of his predecessors, the exchange rate has been something of a headache for him.

But in contrast to every Labour chancellor before, his problem is an exchange that is arguably too strong, not too weak.

Global confidence in the UK economy has been high, so international money has flowed into the country, not away from it, keeping the pound up.

And partly as a result of that, the Brown years have been pretty bad for the old pre-occupations of Labour governments, such as manufacturing.

And they have been pretty good for the business and financial services sector centred on the City.

It is not what anyone would have predicted, but it has been a significant reorientation of our economy that has occurred on Mr Brown's watch.

Surprising direction

And lastly, linked to the availability of cheap imported manufactured goods, the strong exchange rate, and low global interest rates, Mr Brown's period has been marked by strong consumer spending, a decline in saving, a boom in personal borrowing and a related upswing in the price of property.

Some of this may come to be regretted, and some of the house price inflation may be speculative froth.

But even if things do reverse, the broad change of strategic direction in our economy will not revert to the patterns of a decade ago. Something did change under Gordon Brown.

So even if his budget speeches can be dull, Gordon Brown has been managing the economy, as it has evolved in a surprising direction.


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



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

PRODUCTS & SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific