As Chancellor Rachel Reeves is under pressure to reduce spending and increase taxes, Liam asks Lord Moynihan why he thinks the UK is locked in “slow growth” since the global financial crisis of 2007.
“The economy was growing like gangbusters, and it was wonderful. What went wrong, in my view, was not so much the great financial crisis, which was a complete disaster, but Gordon Brown took control of the economy and started spending like a drunken sailor to get re-elected. Bit by bit there was a massive spending spree, a lot of it completely wasted money, flooding the economy.
“So by the time we came to the great financial crisis, there was not a lot of money left in the bank. We were running deficits, government expenditure had shot up, and then, the cherry on the cake of the economic collapse, we got the great financial crisis.”
They key to growth, says Jon, is not just increasing wages in the public sector.
“There’s no magic mountain providing extra salaries. The Labour government has just given huge raises to the whole of the public sector. They haven’t done anything for that. They haven’t grown their productivity, they’re just getting more money. Well, if you’re not growing the economy, that means a whole bunch of other people in the private sector are going to get less.”
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