Byline Times
Household Budgets to Maxed Out Credit Cards: Thatcher & Starmer on ideological economics
Margaret Thatcher didn’t start it. There is a long history of politicians misrepresenting decisions on the economy invariably to try and disguise the reality that they will leave the worse off in society more worse off.
Even just going back in living memory Harold Wilson when the 1966-70 Labour Government devalued the pound against the dollar claimed that the pounds in peoples pockets would still be the same.
Wilson despite a reputation for being less than straightforward on occasion was a modest exponent of the political art compared to what came later.
Margaret Thatcher compared the national economy to a household budget and the issues that arose if it went into debt.
Chancellor Rachel Reeves has now echoed the point again telling Nick Robinson that managing the economy is just like how her mother managed the household budget to make sure that income and spending was in exact balance.
The comparison is entirely fallacious. Household budgets don’t have to fund public services, the army and national infrastructure. Thatcher used the comparison to promote spending restraints which the Blair Government stuck to, albeit only for a limited period.
Keir Starmer claimed in 2024 that because the Tories had ‘maxed out the credit card’ Labour’s spending commitments on green investment and no doubt much else would be scaled back.
There is no question that Liz Truss’s 49 days in Downing St did do significant damage to the British economy- something she is entirely unprepared to take ownership of. However the problems of the British economy have a much longer history than that.
Moreover the economy does not run on the basis of Keir Starmer or Rachel Reeves credit cards.
After 1945 Britain was effectively bankrupt and had to rely on a loan from the US to keep going. That did not stop the Attlee Government from financing a house building programme and introducing the NHS.
It’s a matter of political choice and Starmer and Reeves are making the wrong one, albeit we must hope not for the same underlying reasons that Thatcher did
Slightly off topic, but years ago I remember some news about Blair paying off the US loan. I’ve often wondered, in my simplistic way, what the terms of that agreement were. Is this why we have the so called special relationship?