Last updated 12:18, Thursday, 30 October 2008

THESE days it is a very small world. This has been all too well demonstrated by the sudden near collapse internationally of the banking system.

There were warning signs a year ago and even before then it was obvious to those following the financial scene that chickens would eventually come home to roost.

However, in the United Kingdom things are now far worse than they need have been as we are ill-prepared to cope with the deteriorating economic situation.

One person is primarily responsible, namely Gordon Brown, as his 10 years as Chancellor were an unmitigated disaster.

Indeed, he appears to be a charlatan, giving the impression he is an economic wizard, when his actions demonstrate the reverse.

Mr Brown inherited a strong economy from the outgoing Conservative administration. He immediately decided to give the Bank of England control of interest rates with a specific remit to control inflation.

This was an abrogation of the Government’s duty and recently the Bank’s decisions have contributed to our economic difficulties.

He removed control of financial regulation from the Bank by establishing the Financial Services Authority. The former had generally been successful in its remit, but the authority was not given the necessary powers, so when things began to go wrong 18 months ago (it should have acted months before Northern Rock’s collapse) it did nothing.

Brown then proceeded to sell around half of the country’s gold reserves at rock-bottom prices. this has cost us billions. 

Then, having adhered for a while to the previous Government’s spending plans, he began to ‘spend, spend, spend’.

He continually asserted he was a prudent Chancellor. That he got away with it for a long time was only due to a period of world economic expansion.

He had already withdrawn tax concessions on dividends, thus garnering £5 billion a year and destroying arguably the finest private sector pension industry in the world.

One has lost count of the number of stealth taxes.

Brown has remorselessly squeezed the pips from Middle England. Dennis Healey, another Labour Chancellor, must be feeling pleased!

He persists with his complicated system of Tax Credits, which has wasted millions.

He reduced the standard rate of Income Tax, yet hoped the electorate would not notice the abolition of the 10 per cent band.

Billions upon billions have been wasted throughout the public sector.

It is possible to make a case that our country is bankrupt, and not just regarding government finances, as Brown has encouraged people to borrow far more than is prudent.

There may not be a general election for 18 months. The country cannot wait for that long, especially as New Labour are to borrow yet more to spend their way out of the recession.

JOHN PAYTON
Bitterbeck Close
Cockermouth