TrinityIHC wrote:
To be fair it's not like the tories come into office and instantly plunge the country into recession,
Exactly - they aren't coming in to office inheriting recessions. It's after they've had chance to bring in their first budget, that the recession happens.
The Conservative party works hard to push the line that they always come in having to clean up the mess after an inept Labour government, so that they have a line 'its Labour's fault' to cover themselves. The facts are quite different:
The time when a government came into office having to clean up a mess, was the start of Harold Wilson's second term, in 1974.
There was a recession at the end of Ted Heath's Conservative government in 1973-74. This is when there were energy shortages and the government had to go to a three day week to conserve energy. The miners were on strike and the country was in disarray. The Tories got voted out. Harold Wilson inherited a country in recession with double digit inflation. Two years later, we had to go to the IMF for bail out money. Of course the Tories always use this as a claim that "in the 1970s, Labour ruined the country and sent us into the arms of the IMF", they don't tell you that what they left Labour 2 years earlier was a recession, double digit inflation and having to be on three day weeks because of energy shortages!
Wilson resigned in 1976 and handed over to Callaghan who had a three year term like Gordon Brown later did. This was a turbulent time with union strikes following the IMF bail out but in the final year of Callaghan's term the economy grew 5.4%. It was not an economy in recession - far from it. That is well above the UK normal growth rate of about 2.5%.
I expect the next guess will be "put I bet Callaghan left a big budget deficit". The budget deficit the Tories left in 1974 was 5.5% of GDP, the budget deficit Labour left in 1979 was 4.7% of GDP, so the deficit had fallen slightly.
The recession didn't come till a year later, from 1980-81, after Thatcher had taken the reins. She also left a country in recession when she left office in 1990, as John Major took over at a point the 1990-91 recession had already started.
In more recent times, the financial crash was 2008. The recession under Labour was 2008-09, but the economy was recovering after that - a point which is often forgotten. It's only since the Coalition has been in office that we have had the story of 'stagnation' and 'flat growth' or 'double dip recession'. The last year Labour were in office, which was the year after the recession, the economy grew at 2.1%. This is approaching the UK's normal growth rate.
We went back into recession from 2011-12 under the Coalition.
The irony is, now, the Conservative line is 'of course we are back in recession because we had to cut back on public spending to deal with the deficit'. But at the time of the election, they argued that Keynes was a myth, and that cutting public spending wouldn't damage growth. They said that cutting public spending would free up resources to the private sector and allow the private sector to grow. But the private sector isn't growing.
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