What has Gordon Brown done for Britain since his first Budget?

Where were you on March 17, 1998? It was St Patrick’s Day, of course, but something far more significant than the annual Guinness-fest occurred on that Tuesday.

I remember it well: I should have been at Cheltenham’s National Hunt festival to watch JP McManus’s Istabraq win the first of his three Champion Hurdles. Instead, I was in the office, watching Labour’s Gordon Brown deliver the first of his 10 full Budgets. Istabraq was electrifying; Mr Brown merely intriguing.

Labour had won power in May 1997, but in his early days at Number 11, the new chancellor was content simply to manage the golden legacy of his predecessor, Ken Clarke, giving himself time to weigh up the state’s finances.

Mr Brown presented a mini-Budget on July 2, 1997, but in fiscal terms it was a trifling affair. Eight months later, however, he was ready for the real deal. In a speech labelled “New Ambitions for Britain”, he set out to change the game, the way it was played and refereed - for ever.

As Mr Brown said at the time: “Only once in a generation is the tax system fundamentally reformed.” So delighted was he with his Code for Fiscal Stability that he insisted: “Should any future government wish to take a different view, it should first be required to consult and persuade Parliament of the need to change.”

In effect, Mr Brown drew a line in the sand and said: this is a fresh start. At that moment, he gripped the levers of power – and began to pull. It seems not unreasonable, therefore, to use that fateful day, March 17, 1998, as the baseline from which to judge his performance.

How has the United Kingdom fared since then, in absolute terms and relative to its competitors? Before answering the question, here’s a health warning. We learn from a new book – Where Power Lies: Prime Ministers v The Media, by Lance Price, Labour’s former director of communications – that this Prime Minister is obsessed with controlling hour-by-hour media coverage and is prone to temper tantrums, shouting at staff and kicking furniture when a story runs beyond his spinmeisters’ control.

If true, Number 10 advisers might care to bring out the Ritalin and buffer the chaise longue with bubble wrap. Britain’s financial performance under Mr Brown’s stewardship has mirrored that of his local football team, Raith Rovers: a Premier League side in the 1990s, but now languishing in the bottom half of the division below.

Let’s kick off with the pound: after all, when Mr Brown was in Opposition, he taunted the Tories with the allegation: “A weak currency arises from a weak economy, which in turn is the result of weak government.”

Since March 17, 1998, sterling has lost about 14 per cent of its value against the Swedish krona, 24 per cent against the Chinese yuan, 33 per cent against the Swiss franc and 35 per cent against the Japanese yen.

The euro was not a currency, as such, in 1998, but the website x-rates.com calculates that against a basket of currencies forming the euro, sterling has shed about 27 per cent of its value over the past 12 years. In that time, even the enfeebled American dollar has dipped less sharply than the pound.

I am sure if one looks hard enough (try sub-Saharan Africa), there will be a handful of currencies against which sterling is now stronger than it was on Mr Brown’s big day; but not at the top table. As a result, when buying in overseas markets, the Great British consumer is a six-stone weakling.

Yes, Mr Brown kept us out of the euro. Well done. But in doing so, he has allowed us to see what traders think of the UK’s prospects. Verdict: thumbs down.

Turn now to the London stock market, where much of what’s left of our pensions, ie long-term savings, tends to be invested. How have we fared?

On March 17, 1998, the FTSE-100 index was 5,834. At close of play on February 10, the day on which I based these calculations, it had fallen to 5,132, a drop of 12 per cent.

Ah, says Mr Brown, this is a global crisis. All industrialised countries have been affected by recession. In which case, what has happened to their stock markets? In France, the CAC index is down, but by less than one per cent. In Germany, the DAX index is up by 12 per cent. In America, where all the trouble began (Mr Brown’s words, not mine), the Dow Jones Industrial Average is up by 15 per cent. In Hong Kong, the Hang Seng index is up by 77 per cent. Of the world’s big players, only Tokyo’s main market has fared worse than London’s.

In a report for the Centre for Policy Studies, John Littlewood, a former group director at S?G Warburg, concludes: “The London stock market has always performed poorly under Labour governments… its performance under this [one] has been even worse than during previous Labour governments.”

Hard to believe, I know, but true. Under Labour 1964-70, the stock market’s real return (adjusted for inflation) went down by 13 per cent. Under Labour 1974-79 (which included Denis Healey’s grovelling to the IMF), it went down by 11.5 per cent. Under Mr Brown, the London stock market’s decline in real return is more than 20 per cent.

On March 17, 1998, he talked much about Britain’s “deficit reduction plan”, “an unshakeable commitment to prudent monetary and fiscal rules” and, get this, addressing the “structural weakness” of unemployment. These were the yardsticks by which he chose to be judged. What happened?

Well, Britain’s budget deficit, as a percentage of GDP, is running at 14 per cent, the worst among G20 nations, and higher even than in Greece (13 per cent), which is about to be rescued by an EU bail-out. We are borrowing about £180?billion a year, and our stock of debt is heading for £1?trillion.

Monetary rules, prudent or otherwise, were ripped up, after the Bank of England printed £200?billion and pumped it into the economy (inflation, here we come). As for unemployment, there was no figure I could find for March 17, 1998, but for the spring quarter of that year it was 6.3 per cent. Today, it is 7.8 per cent. For those lucky enough to be in work, real wages are under relentless pressure from millions of economic migrants.

In short, sterling is in the toilet, our pensions have been slaughtered, cash savings yield almost nothing, the country is up to its neck in unprecedented debt, the banking system is awash with funny money, our gold reserves were sold off at rock-bottom prices, and Britain’s dole queue is considerably longer than before Crash Gordon began cooking the books.

Apart from that, it’s not too bad.