So Farewell Gordon Brown!

As Gordon Brown disappears into the dustbin of history as the man who saved the Union it is appropriate to take a look at his significance. There is no doubt that he was both the architect and builder of New Labour’s economic policy which has been so difficult for Ed Miliband to shake off.

This is probably because he has persisted in dragging the dead weight of Ed Balls around with him. Balls not only represents the Brown legacy but offers little hope that Labour has learned anything from those years.

My own view is that history will be much kinder to Brown the Prime Minister than to Brown the Chancellor. This is probably the exact opposite of the popular perception. Brown the Prime Minister may have offered up a Freudian slip in the Commons when he said he had “saved the world” but to a large extent he had.  When the banks teetered on the edge of collapse in 2008 he did the right things in saving the banks and putting up taxes.

It is worth remembering that the economy was returning to growth before George Osborne put the brakes on with his first emergency budget and derailed the whole process destroying billions of pounds in lost output.

That is only a small part however of Brown’s record. He was a slavish supporter as Chancellor of Alan Greenspan who for 18 years was boss of the US Federal Reserve. The man who finally admitted when the Banks where collapsing that he had found a flaw in the theory.  A flaw that had been obvious to most of us for years.

Having pursued policies of deregulation and liberalisation Greenspan had now found "he made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms”.

In pursuing the same policies and making London a safe haven for rogue global capital Gordon Brown turned the City in to the world’s largest tax haven.

One of his daftest ideas and one the establishment continue to praise him for was making the Bank of England “independent”. One of the greatest triumphs of the post-war Labour Government was the nationalisation of the Bank of England. The idea that the policies pursued by the bank can somehow be de-politicised is fatuous. At this level economics is politics.

What’s more an independent bank for years kept UK interest rates higher than those in mainland Europe doing untold damage to Britain’s manufacturing sector. Brown managed to destroy one and half million manufacturing jobs in the process.

As well as liberating the City and the Financial Services sector to do its worst his next crime was the way he structured the welfare state to create a set of subsidies to the private sector. His complex web of in-work benefits kept workers trapped on low pay and subsidised bad employers. Simultaneously housing benefit grew as private sector landlords had a field day ratcheting up rents to milk the subsidy.

What’s more because ordinary people received next to no benefit from his largesse they did not thank him at the ballot box for this spending.

There are other examples the way that private sector provision of care for children and the elderly has fallen in quality and risen in cost. A week does not go by without some scandal in these private services. He was truly naive in thinking ownership did not matter and you could use regulated markets to achieve better services for the public.

Clearly Blair and Brown both had a malign influence in the Labour Party he was ruthless in rooting out any opposition to his policies and spent an inordinate amount of time jousting with Blair in placing his cronies in safe parliamentary constituencies.

It is clear now that the golden years of Brown’s Chancellorship can now be seen as being funded by fool’s gold. The entry of China into the world economy reducing the costs of manufactures and ushered in a period of low inflation and individual spending was funded by a tsunami of debt. Rather than abolishing “boom and bust” he facilitated it.