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FactCheck: Gordon Brown's greatest hits

By Channel 4 News

Updated on 20 March 2007

Longest period of growth, lowest unemployment, lowest inflation. How do Gordon's claims as chancellor stack up?

Gordon Brown presents his eleventh budget this week - and it is widely expected to be his last. But what has his record been like as Chancellor?

To mark this significant milestone in British political history, FactCheck runs the rule over his claims, and his record. As another part of Channel 4 might say, Gordon Brown, these were your best bits...

Has Gordon Brown managed the economy well?

Back in 1997, Gordon Brown made two commitments which have been endlessly debated ever since. These were the famous rules which committed the government to keeping the national debt at a sustainable level.

As Gordon Brown said at the time, "My first rule - the golden rule - ensures that over the economic cycle the Government will borrow only to invest and that current spending will be met from taxation."

"My second rule is that, as a proportion of national income, public debt will be held at a prudent and stable level over the economic cycle."


Brown tacked two years on to the economic cycle extending it to nine years. Then it was 10 years and by the 2006 budget it was up to 12.

He's still on track to meet the second rule - though according to the independent Institute for Fiscal Studies think-tank, there's a 44 per cent chance the government will break this rule by 2010-11.

The first rule is more controversial because no-one is absolutely sure what an economic cycle is. In fact, some economists don't even believe they exist at all.

Certainly, the charge against Gordon Brown has been that when the first golden rule came close to being broken, towards the end of Labour's second term, he has changed the definition of an economic cycle to make it easier to meet.

The IFS published a thorough analysis of Brown's cyclical shenanigans. Up until the 2005 budget, the treasury stuck with its view that the cycle would be seven years long. In 2005, new figured showed that the government would break the golden rule.

And a few months later, it tacked two years onto the front of the economic cycle, extending it to nine years. In the 2006 pre-budget report, it went up to 10 years. And by the 2006 budget, it was up to 12.

It is certainly hard to escape the feeling that a little fudging has gone on - though this is more to do with the arbitrariness of the test than any alleged mismanagement from the Chancellor. And in any case, the economy was only likely to break the golden rule by a small margin.

Has Gordon Brown put taxes up?

Earlier this year the Conservatives claimed that Gordon Brown's tenure in office had led to a £1,300 increase in tax for the average family. In fact, this claim was based on a crude average figure which doesn't hold up under close analysis.

For one thing, it doesn't include the effect of benefits. A more sophisticated IFS analysis, though slightly out of date, suggests that people in the poorest half of society have gained from Gordon Brown's budget, while people in the richest half have been paying more tax, and people exactly in the middle have remained about equal.

Did Gordon Brown destroy our pensions?

Britain's pensions have certainly suffered badly of late, and the temptation has been to pin the blame on the chancellor. The Tories have claimed that measures taken in the 1997 budget had the effect of taking £5bn a year out of pension funds.

But that figure is long out of date, and only represents a fraction of the size of total pension fund deficits.

The real cause of pension fund problems has been a combination of demographic factors - the tendency of people to live longer - and the ongoing weakness of the stock market.

How has Gordon Brown dealt with poverty?

It's not something you would necessarily pick up from reading the newspapers every day, but Gordon Brown's time in the treasury has produced a large and sustained fall in the number of people living below the poverty line.

He has claimed that this fall is the largest since records began. That's only true because records only began quite recently - 1979.

Experts contacted by FactCheck claim that if similar records existed for the period from the end of the first world war to the mid-sixties, they would show an even longer fall.


Is the Economy better than it has been for years?

Gordon Brown unveils pre-election posters, 2005 (credit: Reuters)

Gordon Brown kicked off the 2005 election campaign with some extremely robust pledges about Labour's economic record.

We found that the claims were all correct representations of the statistics - but that it depends on which statistics you choose.

Look at others, and the story would be different. And since 2005, the general economic picture has deteriorated.

The Claims

'Lowest unemployment for 29 years'
'The lowest inflation since the 1960s'
' The longest period of economic growth for 200 years'
'Mortgage rates are lower than they have been for 40 years'
Pre-election posters unveiled 11 January 2005

The unemployment picture has worsened since the 2005 election. It was 819,000 in January 2005, when the claim was made - it has now risen to 922,000 by the most sympathetic measure of unemployment, the claimant count. But by the internationally recognised definition, unemployment is up from 1.4 million to 1.7 million.

Inflation is actually much higher now than it has been for years. December's RPI figure was 4.4 per cent - higher than it was at any time during John Major's full term in office, (1992 to 1997). In December, the treasury's preferred measure of inflation, CPI, was also at its highest since September 1995.

The economic growth claim won't actually be true for another decade. Gordon Brown based this claim on quarterly figures for economic growth. But they don't actually go back 200 years. Annual figures provide a more consistent record, showing a period of uninterrupted growth from 1948 to 1973. The present period only dates back to 1992.

Finally, the mortgage claim no longer stacks up. In fact, the basic mortgage rate, the standard variable rate, is at 6.99, very nearly what it was when Labour came to power in May 1997, when it was 7.27. More importantly, the affordability of housing has fallen consistently since 1997, driven by rapidly increasing house prices.

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