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Labour accuses Government of rewriting history over deficit

Shadow Treasury chief secretary Angela Eagle has accused the Government of rewriting history over the causes of the recession when it blames the need to cut public spending on Labour.

Speaking to Money Marketing, Eagle says the Conservatives and Liberal Democrats blame the need to cut public spending on Labour’s fiscal mis-management, even though before the financial crisis they said they would match it and in some instances go further.

She says: “They thought it was popular then to say that and have now decided retrospectively to rewrite history, this recession was caused by the reckless  behaviour of the banks in the global money market and began in the sub-prime market in America.

“Neither the Conservatives or the Liberal Democrats were warning in 2007 we were spending too much, they said they would match our spending and were demanding we spent more.

“If you look at the record it is a manufactured deceit they are using for their own political purposes.”

She says: “They are claiming we were on the brink of bankruptcy and there was going to be a sovereign debt crisis and so they had to cut spending in the way they did and that was all because of overspending on public services.”

Eagle says some cuts are necessary but the key to one of the best ways out of a recession is through growth and jobs.

Her comments come after Labour leader Ed Miliband defended the level of borrowing under Labour at a press conference on Monday.

He said: “Borrowing was within acceptable limits. It was about two per cent of national income and then the financial crisis hit, that is why we have a high deficit now.”

He added that the level of borrowing should not have come as a surprise to the Conservatives with Labour standing in the 1997 election on a platform of “borrowing to invest”.

It has become a regular refrain of Government ministers being questioned over spending to blame the action on having to “clean up the mess left by the Labour government”.

Secretary of State for Work and Pensions Iain Duncan Smith used it repeatedly during Monday’s Work and Pensions questions.

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. The Financial Crisis, or the ‘Global Financial Crisis’? Either way it is a convenient scapegoat for the maladministration of the nation’s economy throughout the 1997-2010 Liebour governments. Remember that during much of that time their was no ‘Financial Crisis; global or otherwise. Bascially, when the crisis came the UK got caught with its pants down. Had there have been less wasteful spending, selling gold, political nonjobs, increasing the size of the State, pension dividend taxation etc etc we would not have the massive problem we do now. Yes it would be problematic but basically Labour is responsible for making it a worse situation than it otherwise would have been.

    If Labour MP’s had any shame they would shut up, hangs their heads and rethink their stupid left wing ideology. Gordon Bruin hasnt got the bottle to be in the commons much and knows deep down that he is a failed Chancellor and was a ridIculed PM. Cretins the lot of em; and jail birds now as well.

  2. Michael Greenwood 12th January 2011 at 1:20 pm

    “This recession was caused by the reckless behaviour of the banks in the global money market and began in the sub-prime market in America”

    Could she please remind us all who’s job it was to regulate the reckless behaviour of banks during this time?

  3. And who was in Government when it and the FSA signally failed to regulate the banks properly (or even at all)? Hector’s “light regulation touch” comes to mind.

    What poppycock!

  4. So now we know ~ none of the present mess in which UK plc currently finds itself was Crash Gordon’s fault at all! And to think I doubted his competence for a moment. It was everybody else’s fault.

  5. Michael Greenwood, you’ve obviously ommitted to notice that the global money market was quoted, the UK Govt was never to regulate all the global banks. The problems started with the UK sub prime market, so if there was a lack of regulation, it was accross the Atlantic.

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