Given the damage inflicted by a string of Tory chancellors in the last 14 years, including George Osborne, Kwasi Kwarteng Jeremy Hunt, perhaps we shouldn’t be too concerned. Until we remember who was the last Labour chancellor of note. Step forward, Gordon Brown.
No Chancellor is perfect. They all make mistakes. Often, the consequences of their errors aren’t fully understood until years later.
For while, the so-called Iron Chancellor could do no wrong.
He helped secure Tony Blair’s electoral landslide in 1997 by pledging to stick to Tory spending plans for the first two years after a New Labour victory.
He did this because voters widely expected Brown to go on a spending spree, like so many Labour chancellors before him, and bankrupt the country.
Brown stuck to his pledge but made other errors. Three in particular spring to mind. And we are all still feeling the consequences today.
The first came almost instantly after his appointment, when Brown launched a stealth tax raid on the nation’s pensions, by scrapping tax relief on dividends.
His spiteful move destroyed gold-plated workplace final salary pensions, by making them too expensive for companies to run.
At last count, this has ripped around £200billion out of the nation’s pensions. Millions of workers face a far poorer retirement as a result.
The money raised was frittered away on a host of pet New Labour projects, none of which achieved much.
Brown’s second howler has also cost us a fortune. Some of you will know what’s coming and will already be cringing in anticipation.
In his arrogance, Gordon Brown decided that he knew how to time markets, and decided it was the perfect moment to dump more than half of the nation’s gold reserves.
After 4,000 years acting as a store of value, gold was finished and Britain would be better off without it, Brown thought.
He began selling gold 25 years ago this month, in May 1999. At the time, the gold price was at a 20-year low of around $282 (£225) an ounce.
Brown made a hash of the sale, too, signalling that the UK was about to flood the market with supply, which drove the price even lower.
In total, the Bank of England sold 395 tonnes of gold at an average price of $276 an ounce, pocketing $3.5bn.
Unfortunately for Brown’s reputation, the gold price didn’t fall. As soon as he was done, it started climbing. And climbing. In fact, it recently hit an all-time high of around $2,350 an ounce.
That’s 750 percent more than the price Brown bagged. The $3.5billion of gold he flogged off would have been worth almost $30billion if he’d held onto it.
Gold is likely to climb higher as central bankers, led by China, buy as much as they can afford. They know the value of it.
Brown shifted the proceeds of his gold rush into government bonds, which haven’t done very well.
And his third huge error? After ditching Tory spending constraints, Brown went on a spree after all, pumping up the economy in preparation for the day when he replaced Tony Blair as Prime Minister.
He assured us that he had put an end to boom and bust, a laughable claim, because nobody ever will.
At the height of a combined banking and property market bubble, Brown was running a three percent Budget deficit.
Brown wasn’t to blame for the great financial crisis of 2007-09. But he was to blame for leaving us totally exposed.
Three huge howlers. I can’t bear to think how many trillions they have cost us.
We can only hope that Labour shadow chancellor Rachel Reeves won’t prove as error-prone if she takes charge of the nation’s finances in the months ahead.
