Who is to blame for financial mess?

I suppose Nick Warren’s carefully scripted letter (Rye Observer 11/3/11), is the closest we’ll get to admitting his Labour party’s culpability in our nation’s financial crisis and unserviceable national debt which “all political parties would have been faced with to having to make cuts, if in power”. But then he spoils it by replacing historical fact with Labour’s fiction!

“Unfettered free market capitalism” (private enterprise and a handful of philanthropic bodies) did indeed get us where we are today: it brought us railways, aviation, bus services, forestry, coal, electricity, gas, telephone and mains water supplies, radio, TV, schools, universities, local cottage hospitals... all of which were nationalised by Labour at a huge ongoing cost to the tax-payer! All Labour ever brought us were stationary wind farms!

“The banking industry remains largely unregulated...” only thanks to 12 years of Gordon Brown’s failed Financial Services Authority! Devised as a single financial regulator for the supervision of banks and financial services, it relieved the Government regulated Bank of England of that duty in preparation for Britain’s entry into the Euro (a move too risky, even for Gordon)!

But, to be fair, the writing was clearly on the wall for a global financial crisis in the immediate aftermath of deregulation of the LSE - the ‘Big Bang’ of October 1986. However, these subsequent effects played no part in Labour’s uncontrolled rise in public spending which created our present unserviceable national debt! This crisis uncovered the FSA’s singular failure to have any effective regulatory control over the UK financial and banking sector.

Gordon Brown’s disastrous mismanagement came after inheriting, in 1997, Britain’s strongest and soundest economy through having left the disastrous ERM (to which Labour was committed!) and squandering the huge fiscal benefits from Big Bang!

As Nick points out, no two economists will ever agree, for economics truly is a black art, but had Labour committed as much energy to managing the economy as it did to its spin doctors, then we would not be in this crippling financial mess!

Barry M Jones

Bixley Lane, Beckley, Rye.