‘Brown to blame’ for Northern Rock crisis
The credit crunch’s spread from the city to the high street is partly due to the government’s mismanagement of the economy, Conservative leader David Cameron has said.
Writing in the Sunday Telegraph, Mr Cameron claims that while instability in the US markets has been the “trigger” for the Northern Rock crisis, Britain’s growing debt culture has meant that “over the past decade the gun has been loaded at home”.
He argues that the sensitivity to interest rate increases has been heightened as a result and says the situation has been exacerbated further by the government’s “stealth taxes”.
“The credit crisis. raises deeper questions about the way our economy has been run over the past ten years,” Mr Cameron writes.
“[Chancellor] Alistair Darling’s remarks last week that banks need to think carefully about their lending decisions came after a decade of virtual silence about debt from both him and [prime minister] Gordon Brown. This government has presided over a huge expansion of public and private debt without showing awareness of the risks involved.”
In the article Mr Cameron attacks the prime minister’s reputation for cautious fiscal management, saying the government’s borrowing makes “Italy’s. look prudent”.
He also calls for “greater transparency” in banking and says a Conservative government would reform the appointment process for the Bank of England’s monetary policy committee, which sets interest rates.
“Let us hope that the Bank of England’s measures can contain this crisis, so that savers and homeowners are safe. But if we achieve that, let us not notch this up as another victory for stability, but let us take the action needed to ensure that we are better prepared should it ever happen again,” he concludes.
