Labour rewriting history again

Once again, we heard Labour in the form of Stephen Timms reinforcing the too-readily accepted wisdom that there was a global recession in 2008. (At least he did not go on to suggest that Labour had nothing to do with the credit crunch.) I would only add to what I said twelve months ago that Canada, which managed its financial affairs better than either the UK or US, was also relatively unscathed and that we should all be glad that the chancellor persuaded Mark Carney to take over as Bank of England governor.

Mr Timms was attempting to explain away Labour's poor record on youth unemployment. He was eloquent in presenting the case for Labour's "jobs guarantee" in a debate on Wednesday afternoon. Indeed, he was probably the only Labour front-bencher who could have made it sound plausible for more than a second. But he glossed over its crucial flaw, which is that it cannot be paid for without more borrowing or taxes. The proposed mechanism, a tax on bankers' bonuses, is as substantial as a crock of gold at the end of the rainbow. As the last Labour chancellor admitted shortly after the coalition replaced the bonus tax with a more reliable means of extracting money from the banks, "it will be a one-off thing because, frankly, the very people you are after here are very good at getting out of these things and... will find all sorts of imaginative ways of avoiding it in the future".

Earlier, at Prime Minister's Questions, David Cameron delivered this squelch, which I am sorry went unreported on BBC bulletins:

Last week, the Labour leader asked me six times about the tax treatment of hedge funds. Now it turns out that the treatment he is complaining about was introduced in the autumn of 1997 by a Labour Government. It further turns out that it was extended in 2007. Who was in power in 2007? It was Labour. Who was the City Minister in 2007? I think we’ll find it was Ed somebody.

It has to be said that though Conservatives voted en bloc against Labour's budgets and other major financial statements, neither David Cameron nor George Osborne seems to have raised the treatment of hedge funds in the House when Labour was in power. The coalition has closed some loopholes but not all. That does not detract from the Blair/Brown administrations', close as they were to the big financial institutions, readiness to create opportunities for certain people to shift large amounts of money offshore.