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Tuesday, 22 May, 2001, 14:38 GMT 15:38 UK
How's the economy for you?
The economy is booming - unemployment is at its lowest for a generation and inflation is low - but is the boom benefiting everyone?
Labour says its careful management of the economy under a "prudent" Chancellor has ended the years of "boom and bust".The Conservatives say he inherited a golden economic legacy from them, and the Liberal Democrats point to the sectors of society where the economic success story is more patchy.
There are still unemployment blackspots and jobs in manufacturing industries are disappearing. But youth unemployment has dropped sharply and the export industry has weathered the impact of the strong pound.
Is the economic success working for you? Can the opposition parties do better and who has got the right solution to steer UK plc in a globalised economy.
In 1995 I started a business here in Vienna importing British safety clothing. The pound was valued at 15.6 Schillings. This morning the pound is worth almost 23 Schillings. This means that prices have risen more than 45% since 1995. Can you imagine for a moment anything so horrific for an economy? No wonder 100,000 jobs were lost during the last year alone. This week saw the announcement that Britain's balance of payments experienced the worst quarterly figures since the all time high of 1991. Since 1997 every subsequent quarterly BOP has been deeply out of balance! Can you still believe in the wonderful chancellor? This is a catastrophe waiting to happen. Handing over the management of the economy to the Bank of England has the same effect as giving control of the economy to insurance companies, speculators and a group of people working in a square mile of London! Wake up before it's too late.
Ken, Vienna, Austria
Much of the regulation impacting on small business would have arrived if the Tories had been elected in 1997 as most has been introduced through European directives which Britain is to bound by treaty. Given that more than 60% of exports go to the EC and we enjoy huge benefits as small businesses through the single market, we have to be prepared to accept the rules of the club!
When people complain about being "strangled with red tape" and "unnecessary regulation" this usually refers to the introduction of the minimum wage, the Working Time Directive and paid paternity leave etc. These policies, which are a start to achieving decent working conditions, would never have been implemented by the Tories, who are too concerned with the effect on fat-cat director's pay. UK business is already competitive and some extra regulation to protect workers would not harm this significantly.
What's best for business isn't necessarily the best for the rest of us, and vice versa. The fact that 140 predominantly large businesses (which, lets be honest, tend not to have the interests of their host countries at heart) have supported the Tories is neither surprising nor significant. Perhaps it's because Labour has shown so effectively that they can run the economy successfully and invest in our public services for the benefit of us all they're very worried that the Tories may never get in again.
The economic climate is not in the least bit due to the tweakings of politicians. Britain plays such a minor role in the world's economy. The economy is a global one these days. It really makes no difference who's in Number 10.
Congratulations to Labour for introducing the minimum wage - when are the registered carers week going to receive it?
Time to hand the economy and the reins of power back to the Conservatives. It was John Major's previous government's treasury which set the ball rolling for a sound economy. Labour have just ticked along with the process. However, America's economy is in decline and heading for recession. If the Tories don't win back power, the same will happen in Britain as well.
Any attempt to suggest that this government has immunised the country from boom and bust is complete hogwash. Governments are nearly powerless in the face of free market economics. Let's see how Gordon Brown´s "prudence" stacks up when the world economy really slows down in a big way. He´s simply setting himself up for a big fall.
Eric Porter, Aylesbury, UK
Isn't it hypocritical of the Tories to keep banging on about "stealth taxes" when it was they who introduced the fuel duty escalator, insurance premium tax, airport passenger tax, VAT on domestic fuel and many more? I also seem to recall that under the Tories the rate of VAT was increased from 8% to 17½% - but very stealthily of course.
The most important action the Labour party took to stabilise the economy was to make the Bank of England independent and let them set interest rates. All the parties are stating how they intend to get involved in running peoples affairs but the way forward seems to be to give more choice and freedom to people, businesses and other organisations.
The best thing Labour have done with the economy is not to mess it up. Labour came to power at a time when the world economy was growing. With such a huge mandate Labour should have been more radical. Let us not forget that this government had a thirty billion dollar windfall when the new mobile phone licences were auctioned. Where has this money gone?
In response to Rahul: the £23bn raised through the 3G licence auction went to pay a substantial chunk of this country's national debt. All in all a good idea as it frees up future government expenditure.
Gordon Brown's stewardship of the economy has undoubtedly been impressive, but it is still too soon to talk about Labour being the "party of economic competence" after one term. As for William Hague, nobody can take him seriously. His sums are so ludicrous that he has no credibility even with the majority of natural conservatives.
I find it hard to understand why the Labour government are still refusing to raise income tax further on the highest earners.
In answer to the question 'Why are the highly paid not taxed more?' there's a very easy answer. They are paid more because the skills they possess are needed world-wide. Tax them to much in this country and they just move to say the USA, All we end up with is the brain drain and like it or not we all suffer. The answer is balance tax revenue between tax on earnings and tax on spending. The better off will still pay more tax, but it will be in the form of VAT, not income tax.
The curious thing is that Labour are telling us that there are more people working than ever and unemployment is at record lows. So with more people paying tax and less dependent upon state benefits, why so many tax increases over the past five years? Where does the cash go? I think we all know the answer to that one!
What people forget is that Blair did not promise the earth at the last election. Time and again he repeated, no quick fixes and no magic wands. He also said it would take two Parliaments, (ie 10 years) to put our public services right. For goodness sake have people forgotten already what we endured under 18 years of Tory rule.
At least under the Tories we got a boom. All we've got from this Labour government is higher taxes and now we're heading for bust. Don't kid yourselves if you think the economy will be in good shape in 12 months time. It won't.
Scott Wilson-Billing, Bournemouth, UK
The economy has largely done well under Labour. But although Gordon Brown is a worthy Chancellor, he owes a lot to the last Conservative incumbent of his post. Unfortunately I don't believe that William Hague's Cabinet would be anywhere near as effective as John Major's.
Does the Prime Minister know how stupid he looks when he says no more Boom and Bust? It is an inevitability that there will be a bust in time. They kept to Tory spending plans for the first two years of the Labour Government, and they admit it, does that not mean that our current economic position is thanks entirely to the Conservatives? It was the Conservatives who had the balls to take Britain into harsh economic reforms, and it was they who brought us out the other side.
The Government is always criticised for spin but reading many of the comments it struck me that people's opinions reflect the drip drip of disinformation put out by Tory supporting newspapers. The facts are that inflation is low, economic growth is steady and people's incomes are still rising. Personally as a single man on a good salary I don't feel better off but I know I'm not worse off.
To even consider that pro Tory newspapers are responsible for the 'drip drip of disinformation' is laughable. The Sun newspaper virtually controls the electorate and Tony and Rupert are drinking partners. Anyone who feels that the economy is strong as a result of the 'prudent' Gordon Brown must be a Sun reader.
I want the Tories back in and fast! OK, William Hague may not win any personality contests (or beauty contests), Another four years of Labour and the country will be wrecked, economically and morally. I am Asian British, and proud to be British! I hope the voters will have the presence of mind to save at least some remnants of what was once a great nation. The Labour goons with the brass knuckles will definitely work the place over properly this time, given the opportunity.
Pritham, Brussels, Belgium
What is this obsession with paying less tax? We have one of the lowest rates in the world, anyone who thinks we should be paying less, is saying: "I don't care about, education, welfare, health etc, all I care about is my back pocket."
The only group in society that the Tories want to look after are the extremely wealthy. History shows that they don't give a stuff about ordinary people and their concerns. They have opposed every progressive economic and social development over the last century, from the creation of the NHS to the introduction of the minimum wage.
The Conservatives constantly bleat about tax increases under Labour. Yes we have seen a much more rapid rise in tax payments under Labour than under the previous Conservative administrations. However, this is explained by the fact that the economy has done well under Labour whereas it did relatively poorly under the Conservatives.
The conservatives may give the people money but it will be soon be taken away in the form of mortgage payments and day to day living costs. This country needs a government that will control the economy and stop it from overheating. The Tories record is a record of high inflation and interest rates and unemployment.
I'd love to have tax cuts, but it wouldn't mean much to my family - just a few pounds a week. What does make the difference to us is my wife working. I can't risk Tory economics, because whatever cuts they make, they aren't going to compensate for my wife being out of work along with 3 million others, if they perform like they did last time they were in power.
David E Flavell, Liverpool, England
I am told I am well off. I have always voted Labour, but for the first time I will be voting Conservative. I have learnt that under Labour those who do less get more and at the expense of hard-working people.
Like Justin, I'm told I'm well off - all I can say is that over the last 2-3 years I feel worse off. I can't claim Children's Tax Credit because I earn too much - but where do my contributions to the country's economy go? Not into a woefully inadequate transport infrastructure, money poured into a heavily over-administered NHS, adequate education. The global economy is slowing down and yes, Labour (as would any party) claim credit for a stable economy - but what about next year?
New Labour has been in effect four more Tory years but with Tax increases. However, under Labour the wealthy pay less tax as a proportion of their income than compared with the Tories. No wonder so many wealthy individuals now support New Labour.
The government hasn't reminded people of why they had to stick to Tory spending plans in the first place - a £28 billion deficit. When Hague says taxes have risen too fast it was to stop the situation where national debt was rising to a vast level and almost doubled in the last 10 years of Tory rule.
It is ridiculous for Labour to claim they will build an enterprise economy with opportunities for all.
Labour has imported a stream of wretched red tape and legislation from Brussels.
The economy is undoubtedly heading for a slowdown. Many factory closures around the country and to worsen things, the US is facing an up-hill struggle to cope with the deflation of the internet bubble. I think if Britain is to join the euro, the value of the pound will have to fall, hopefully, Britain will regain its global competitiveness in this arena.
Even a wishy-washy liberal like me has to admit that when you look around after four years of this government, things don't look at all bad. There is certainly are signs of more prosperity, investment is being spent where it should be. Our government, viewed from abroad, is viewed as very capable. I see no reason why we would want to change a steady ship.
Mike, Bridgend, UK
I really do feel sorry for people in UK. As a relative outsider (who only spends money in UK) I believe we expats get a more balanced view of the world scene and the values of European membership. We also get a comprehensive view of UK politics without the rabid tabloid press
hysteria. If Labour win then I can only say that you will have got the Govt you deserve. You may interpret that any way you wish.
I don't get anywhere near value for money for the tax that I pay. Why does the Government think that it knows more about how to spend my money than I do?
The Conservatives are quite clearly the best-qualified for running the economy. Most of them are very good at maths and have lots of money themselves.
There is more work to be done to recover from the many years of neglect and under-investment under the Conservatives. The current government has much to be proud of and deserves another term. Tax cuts are not the answer but sustained levels of public investment are needed.
The stability and growth we have seen has been due mainly to a stable expanding world economy, not Labour. It has not helped me, a student who now has a debt of £7500 to society, an overdraft of $1600 and who still has 1 year of a Bsc left. If neo-liberalism economics can not provide for those in need of help, I don't think a civilised culture should put up with them.
I recognise the need to pay even more tax than we currently do, but how about some honest and up-front tax raising measures, as opposed to the ongoing rise in indirect (and not entirely honest) taxation?
Frank W. Meaden, Edinburgh
The Tories are saying changing from the pound to the euro would be a national disaster. Hague says he is fighting to 'save' the pound because Labour will ditch it. The Labour Party's stated position is that there will be a referendum on the issue and only if a majority of the voters vote in favour, will we join the Euro.
Why are the Tories afraid to allow the British electorate a vote on this issue?
In response to Brian's comments, there's no way on this Earth that Blair will give the public a free vote on whether or not to join the Euro - he would have no chance of getting a Yes. The question will be loaded in his favour, spun out of all recognition.
Thankfully the Tories are a dying breed, but Labour have a long way to go to claim they are the right party for the country. Governments always appear to get elected on short memories. This country has one of the worst transport infrastructures in the developed world together with the highest taxes for road users. Don't forget what happened last September!!! It's about time motorists stopped subsidising the rest of the economy. Indirect taxation has gone too far and it needs redressing.
Considering that Labour inherited the economy in excellent health, all we've seen is more tax with nothing for our money. Include in this Labour's intention to manipulate the economy to align us with the euro zone rather than for the best advantage to our country and we are heading for the end of the current good times.
Thank goodness we've finally got a chancellor who understands economic management and that an 'economic miracle' or 'boom' is as damaging in the long-run as a recession. For the sake of my business and many others, please let's not go back to the situation where political opportunism creates economic instability.
Oh dear Mike. So you think Gordon Brown has ended political opportunism? Are you blind? The economy is less competitive now than it was five years ago, productivity has declined, inflation is now higher than the EU average, which it wasn't five years ago, the tax burden has risen significantly and there is a recession on the horizon. I look forward to your comments a year from now if Labour are re-elected!
You get the public services you're willing to pay for. In this country we pay very little tax compared with Europe and most other western countries. The result: a failing public health service, dangerous, expensive and unreliable trains, poor quality housing, homeless people on the streets, litter everywhere etc. I'd be happy to give a little more to help make my country a better place to live, unfortunately my feelings aren't shared by most, who think in terms of their wallets. I'm going to go out now and buy a badge that says "Don't blame me, I voted Lib Dem."
Tom, London, UK
With the continuous reduction in mortgage interest rates in response to banks reacting to the slowing down of the US economy, will the government legislate to maintain the current rates (which are now in line with the rest of the civilised world), or will the British return to the artificially high mortgage rates of the past?
The economy can only be described as 'nervous' at the moment.
The government is sensible to hold the election now, as job-losses are on the horizon, and any feel-good factor which people now have will be long gone by Christmas. Watch out.
Income tax hasn't gone up, but tax on everything else has, and I for one am not happy. Tax people on their income not on the petrol in their cars, or food on their table.
People do not seem to realise the long range of cause and effect in economics - the 18 years of Tories making the public pocket smaller and smaller cannot be significantly addressed in four years. We may be able to see a U-turn of public service standards after a few terms in office by a socially moral party, but in such a small stretch of time (in economic terms) nothing can be viewed in terms of real impact on the economy. People expecting Labour to miraculously repair the years of Tory mismanagement of public funds in one term are slightly naïve.
With the amount of tax I pay I don't feel better off after four years - and I see no possibility of ever so doing. Only one major party is proposing to cut taxes at all - and that by a paltry £8 billion. Gordon Brown steals that much every eight days. And he'll have to steal even more to meet his crazy spending targets. When will a party have the courage to say "we pledge to reduce overall tax to American levels within 10 years"? That one I'd vote for.
Derek Thornton, Bracknell, England
The economy has done well in the past years of Labour's administration. It would also have done well under the Tories. You're not voting for the party who can sustain the boom but the party who spends the wealth accrued by the economy in a way you agree with.
There has been stability under Labour and an independent Bank of England was a great start. But remember that while politicians try to take credit for economic prosperity, we are at the mercy of the global economy so in reality politicians have little to do with economic success.
The curious thing is that Labour are telling us that there are more people working than ever and unemployment is at record lows. So with more people paying tax and less dependent upon state benefits, why so many tax increases over the past five years?
The emphasis on the economy is important to control boom/bust cycles. However the lack of increased public spending and wages in the first three years of Parliament combined with no repeal of anti-union legislation imposed during the previous 18 years of Conservative rule, points to the economic success being at the expense of workers. Also there is an increase in absolute poverty in Britain, and this should be regarded as a true economic indicator that needs to be addressed. I suggest that revisiting Clause Four of the original Labour party may win the hearts and minds of party members old and new.
The economy is a given - end of story. Think of it as weather and dress accordingly. As soon as we accept this, then we can REALLY start to reduce government and red tape, freeing individuals and companies to navigate the economic seasons according to their skills and motivations. Maintain the state sector for safety net and non-market functions only, through taxation at 10% of GDP.
John H, Reading, UK
Whatever else has happened we have had 4 years of economic growth and more importantly stability under Labour. When in power the Tories always give us boom and bust, short-term benefits that are always undermined by long-term losses. When will the Tories admit that their economic policies have been to the long-term detriment of the country?
When are politicians going to end this obsession with destructive neo-liberal free market economics? They say we have democracy in this country, but where is the choice? Liberalism is dead.
The majority of the electorate tends to forget that the Labour Party came to power after 18 years of opposition. To change things around in 4 is a tall order to say the least. But most people would say that the economy is at least a lot more stable than it ever was and that this creates the proper conditions for sustained growth. The Tories just seem to be jumping on the bandwagon of popular and topical issues without a real long-term strategy.
This is the first time I can recall when I know the economy is doing very well but I feel worse off. This doesn't bode well for a party asking permission to do more of the same for the next five years.
Paul R, UK
Unemployment and inflation are rock bottom. People are beginning to share in this prosperity with free TV licences, increases in police numbers, reducing class sizes, £500 handouts to new born children. I find this all rather amazing in 5 years. Don't worry Paul R the effects of our economic strength will be wider felt as long as we don't go back to the other lot!!
Economic stability is essential if a sustained improvement in public services is to be achieved. Allowing for the fact that it inevitably takes time to repair the devastation of 18 years of Toryism, the true test of this Government is how to transmit the benefits to those who are most in need and who should be 'core' Labour voters. Sorry Mal - this aguement is about greater quality of life for all and that means even more investment in the NHS.
Like every party in opposition, the Conservatives under William Hague have far flung ideas on how better to run the country. It does seem that all of these ambitions cannot be substantiated with coherent arguments and satisfactory mathematics. We all know that these pledges are purely for the election, and are not going to be produced. What is needed for William Hague is to persuade the electorate that he is as much a people's leader as Blair, and that he truly can deliver. Unfortunately, there is not much sign of this over the four years, and only time will tell whether he will achieve this over the next four weeks.
Governments are too weak to control the world economy. They just claim credit for the good times and blame the last lot for the bad.
A truly prudent chancellor wouldn't throw £40bn into the bottomless pit that is the NHS - he would save it for the inevitable rainy days to come.
Mal Lansell, UK
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