Blair - economy Flashcards
What did Brown and New Labour do in 1997?
Granted independence to the Bank of England to set interest rates
What did Brown do successfully between 1997-2001?
Kept within spending plans laid down by the Conservatives leading to a swelling in Britain’s reserve funds, declining unemployment, rising wages and low inflation
What was the impact of Brown’s “5 economic tests”?
Kept Britain out of the Euro, meaning in the long-term the UK was protected from the worst fall-out from the “Eurozone Crisis” that began in 2009
What caused the recession?
It was the product of a global economic crisis rather than problems created by Britain/Brown alone
What mistake did Brown make between 2001-7?
After a term of tightly controlled spending Brown relaxed his prudent approach and invested heavily in public expenditure, leading to a rise in inflation from 2.6% to 4.8%
What impact did the taxing of pensions have?
Led to a decline in the “savings ratio”
What was the impact of the creation of a “client state”?
Meant that either unemployment or debt would inevitably rise if government income fell.
What was the impact of deregulation of the financial sector?
Led to a credit/debt culture that masked Britain’s economic issues and created a “recipe for recession”
How much was lost when Brown sold the gold reserves?
A loss in value of £3 billion
Equivalent to a penny on the basic tax rate
How did Britain fail with other markets?
Britain was arguably slow to tap into the emerging Chinese markets.
