GroundHeroics

Duncan, do us a favour and answer this one as honestly as possible. We would appreciate politicians just admitting whatever machinations go on behind the scenes, rather than just imagining some sick version of House of Cards mixed with The Thick Of It

I challenge you to back up this last claim. The NHS is suffering under the coalition but the idea that such a massive institution can be practically destroyed in 10 years without anything close to a mandate is a stretch to believe. Labour needs to do a better job than scare people

Will a Labour government legally separate Investment and Retail banking? People are tired of bailing out reckless bankers. I do not want to see this country still at the mercy of its financial sector in 2020.

Thanks! :)

Hi peatoire, I'm not Duncan but I am a Labour member and Economics student and can try and explain some of this

Q1 - Borrowing a lot of money as a government (especially to spend stimulating the economy) does not make a recession or slump worse. There's no mainstream reasoning that would support this. What it does do is build up government debt that has to be paid off when the country is in better shape. Some economists (Keynesians) suggest its a good idea because if government isn't spending in bad times, nobody is and therefore will make the recession worse.

Q2 - The sale of our gold reserves at a low price was an eye-opening event. A mistake, most probably. But it isn't related to the financial crisis years later, or how well Britain coped.

I'm not a Brown fan, but his handling of the crisis when the shit properly hit the fan was amazing. Few politicians in the world are capable of such a level-headed response to the crisis (he essentially made sure that banks remained stable and didn't bring the global economy down with them), and indeed he proved that in the moment.

My opinion is that Brown is partly to blame for leaving the financial sector unregulated and not repairing the defences that Thatcher took down. But his management of government spending did not endanger us or cause the economy to tank - this is an important point. Again, there is no mainstream reasoning to support this myth. Spending and debt were within reasonable levels until a crash in America spread across the world and decimated our tax revenues.

The Tory economic policy was to cut, cut, cut. They are (rightly or wrongly) uncomfortable with the size of the state. They reduced government spending in an attempt to shrink it and pay our debts. The negative impact this would have on the economy was underestimated by even the IMF. The economy has picked up, in my opinion, because that's what economies do after slumps. It would be difficult as an academic to claim that coalition policy has caused this. What we do know is that some of it has come from population growth and some more from financial services dangerously expanding again. Meanwhile wage growth is anaemic and so this recovery seems unbalanced and not beneficial for most people. A Labour government with higher minimum wages and control on the cost of living is almost certain to address this. Let's also not forget that the Bank of England has all the while been keeping rates record low and introducing money into the economy through quantitative easing. They deserve more credit than anyone.

It makes me rather sick that Cameron and Osborne are taking credit for growth, but politicians are almost always taking credit or abuse for the economy when they don't deserve it.