Has Gordon Brown been a radical Chancellor of the Exchequer? Free essay! Download now
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Has Gordon Brown been a radical Chancellor of the Exchequer?
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| Words: 3500 | Submitted: 04-Jul-2005
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DescriptionThis essay considers both sides of the argument as to whether Gordon Brown has really been a radical chancellor since taking power in 1997. It weighs up ways in which he remains similar to traditional Labour chancellors, and ways in which he has broken this trend in Labour's first and second terms.
The extent to which Brown can be seen as radical can be judged by investigating and scrutinising the policies/ideas he has introduced.
In 1997, when Labour entered into office for the first time in twenty years, Brown and the Labour Party needed to create policies that would sustain their popularity and most importantly, make sure they could and would be re-electable using their new concept of ‘New Labour.’ They were absolutely determined that they would be seen as economically sound, avoid mistakes and prove they could run the economy successfully. It is because of this that some of Brown’s economic policies introduced at this time can be seen as radical in the sense that they were different from traditional Labour values and policies of previous Labour governments. Some such as the Independence of the Bank of England were seen as even more neo-liberal than even Thatcher dared to go, and is proof of a Labour party eager to dispense with traditional values in its first term.
Blair was determined that Labour would not have any economic policies that would scare ‘Middle England.’ This particular section of society is the one that can crucially swing an election result, and therefore Labour needed to involve them. Blair is far more conservative than Brown in economic policy and by the time of the 1997 election, Labour had neutralised the economy as an election issue, with the polls even showing that the public trusted them more with the economy than the Conservatives. They needed to maintain this image with the economic policies that Brown introduced in the first term.
The majority of the measures were introduced in Labour’s first term. They were introduced to distance themselves from the ideas of Old Labour and to make sure they were re-electable. However, in their second term, the trends of the first term in general were reversed, and they seemed to return to traditional Labour values, as shown below in the discussion of the different policy areas
Almost immediately, Brown made the dramatic decision to hand over control of interest rates to the Bank of England. He did this to prove to the electorate that New Labour were a serious party and were not afraid to take bold decisions. They wanted to break away from the stigma of Old Labour, and by doing this right at the beginning of their first term they showed their determination and dedication. Consequently, this has proved to be a very successful decision as they could not, as many parties have done in the past, set interest rates to help them politically, for example, decreasing them just prior to a General Election. In addition, they could not be blamed by the public in times of economic crisis, for allowing interest rates to get out of control. It was also seen as a clever political move as it would increase the time they could dedicate to other economic issues and concerns, appearing to the electorate as a party that really cared.
However, this decision seemed a little hypocritical as Brown was firmly set against the idea of adopting the European single currency. If he believed in the idea of an independent body to monitor interest rates, then it would have made sense to adopt the Euro, where its progress was monitored by the European Central Bank, therefore removing another area for the government to manage. However, he resisted this, and he has been criticised for ‘fudging’ the topic of the Euro. He introduced his ‘five economic tests’ which the country would have to meet before joining. Many sceptics have seen these as unattainable, and were just a ploy from Brown to deliberately keep us out of the euro. Brown also claimed that because the majority of British citizens have flexible mortgage rates and the rest of Europe generally have fixed rate mortgages, they are very vulnerable to fluctuations in interest rates and are not protected against recession. In this way he can be seen to be prudent as well. The avoidance of this issue shows him to be not radical, as he has yet to make a definitive decision. However, it must be noted that Blair is more pro Europe than Brown, and this may lead to future disagreements in this area of economic policy. However, the fact that the UK is still prospering without the Euro, proves that Brown’s radical gamble has paid off.
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