Wednesday, 7 March 2012

Over-the-top apology from Ed Miliband (whoever he is)

The Labour Party spin-doctors must have been tearing their hair out when they heard the following from their party leader on Radio 5 yesterday: ‘the last Labour government...didn’t do enough to regulate our banks properly. That’s what caused the financial crisis’. 

After years of Labour claims that the Brown government was totally innocent of economic mismanagement and had been swept off course by a global phenomenon, Miliband went to the opposite extreme. Most serious critics would not put all the blame for the credit crunch on Labour, though he is right to apologise for the failure to regulate the banks. One of these, RBS, was for a brief period the largest in the world. Its failure therefore must have influenced the financial melt-down. He might also have mentioned the accounting loophole in London which enabled Lehman Brothers, a major contributor to the disasters on Wall Street, to conceal its dire situation from its investors.

What Miliband and Balls should apologise to the British people for is the increase in government borrowing when the economy was booming so that there was, in the words of Liam Byrne, "no money left" when the time came for Keynesian measures to be taken to revive the economy.

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