Major blames Brown for making 'train wreck' of the UK economy

Published on Sunday 14 December 2008 21:37

FORMER prime minister Sir John Major yesterday launched a scathing attack on Gordon Brown, blaming him for the economic "train wreck" facing Britain.

Sir John predicted an "avalanche" of job losses next year as the recession hits families across the country and poured scorn on Mr Brown's package of tax give-aways.

He warned the recession would be deeper and longer in the UK because of the scale of government borrowing.

He said Mr Brown had "squandered" the economic growth he inherited as chancellor from the Tory government in 1997: "They have spent and spent and spent."

Sir John, who was faced with a rising tide of unemployment during the recession of the early 1990s, said: "I fear we are going to have an avalanche of job losses in the first three or four months of next year."

He said it was ironic that Mr Brown, the man who had been in charge of the nation's finances since 1997, was leading the response to the turmoil.

Sir John said: "If a burglar has ransacked your house, you don't normally invite him back to fix the security locks. The concept that Gordon Brown, who has presided over this train wreck, is the person to put right what he got wrong strikes me as being ironic to say the least."

He supported the government's banking bail-out plan, but attacked measures Mr Brown hoped would provide a boost to the ailing economy.

Sir John said: "The reduction in VAT? You might as well have burned the money and thrown it away, frankly. I don't think it will do anything credible at all."

Sir John said the government paid 262 million interest every day on the debt and commented: "It's a frightening scenario."

The economic situation was the worst since the Second World War, Sir John said, but accused ministers of over-hyping the crisis with comparisons to the Great Depression.

He said other countries were better placed to afford a fiscal stimulus package because they had stronger reserves.

"If we continue borrowing like this, the world will be coming out of recession and we will have a huge amount of borrowing that will force up interest rates. In three years' time, as the world comes out of recession, in the United Kingdom we will have higher interest rates, we will have higher National Insurance contributions because the government have already implemented that, and we will have higher taxes."

The Chief Secretary to the Treasury, Yvette Cooper, said she "completely disagreed" with Sir John's analysis. She said: "John Major's government actually doubled the level of national debt and also pushed borrowing up to about the same proportion of national income that we are seeing here.

"But that was as a result of a home-grown inflationary problem where interest rates hit 15 per cent, not as a result of the biggest financial crisis to hit the world for very many generations."

The government's actions would "help us come out of this stronger and faster", she added.