Bursting Brown’s Bubble

Brown’s Bubble: these two words should come to sum up the last seven years of British economy. Today, George Osborne used the phrase. But it should become more than a soundbite, it should be a forceful and coherent analysis explaining how and why the economy has got to this point. That the “prosperity” of the Brown years was not real, but an avalanche of funny money, borrowed against made-up house prices. The pain Britain feels now is that of a bubble bursting.

My brief analysis: Brown kept to Tory spending plans at first, giving Labour cover to win a second term. Magicians refer to this stage as “the pledge” when they show you something like a solid hat, or a rabbit. Then comes the trick.

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Matthew Lynn

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The Brown trick started in 2001/02 with a policy of profligacy, encouraging a debt binge led by government.