Was the crash really ‘all Labour’s fault’? – Flip Chart Fairy Tales

Of course it bleedin’ wasn’t.

It was the result of far too much blind optimism by financial institutions that should have known much better, as this Flip Chart Fairy Tales article shows.

If you want the full details, read that article, but to whet your appetite, here are a few snippets.

For a start, the Organisation of Economic Co-operation and Development (OECD) was useless. In June 2007 it suggested that, if there was a downturn, the UK’s deficit might rise above three per cent of GDP; two years later it was at 11 per cent.

The OECD’s idea of the UK’s structural deficit in 2007 was around 2.5 per cent, but it now says the actual level was five per cent, and it didn’t realise. Nice!

Almost all our financial institutions, as the following graph shows, believed the economy would grow (by up to five per cent!) in 2008 and 2009. Outturn: Minus six per cent.


In May 2008 the Bank of England said it expected conditions to improve gradually.

The International Monetary Fund had already said, in April that year, that growth in the UK would slow to 1.6 per cent in 2008, with a moderate recovery (!) in 2009.

And what was Labour’s perspective? At the end of August 2008, Alistair Darling told The Guardian we were facing economic times that were “arguably the worst they’ve been in 60 years. And I think it’s going to be more profound and long-lasting than people thought.”

Most people didn’t believe him.

So – all Labour’s fault? It seems Labour’s Chancellor was the only one who saw it coming! For many, that won’t absolve Labour of the imagined crime; they’ll say Darling – and Brown before him – should have tightened up regulations to head off the crash and protect the UK from what happened in the rest of the world.

But with everybody else and their mother arguing that there was no need, clearly they should take some of the blame as well.

That’s all this blog is saying.

Follow me on Twitter: @MidWalesMike

Join the Vox Political Facebook page.

Buy Vox Political books so we can continue
bringing you the best of the blogs!

Health Warning: Government! is now available
in either print or eBook format here:

HWG PrintHWG eBook

The first collection, Strong Words and Hard Times,
is still available in either print or eBook format here:


Vox Political needs your help!
If you want to support this site
but don’t want to give your money to advertisers)
you can make a one-off donation here:

Donate Button with Credit Cards


  1. eddie September 13, 2014 at 11:42 pm - Reply

    The unbounded optimism was unbounded by gordon brown wnd alistair darling slashing the regulations. Of course it was their fault. They deliberately stoked the housing bubble for electoral gain. And, even after the crash, al dal was demanding the banks start irrational lending again.

    • Mike Sivier September 13, 2014 at 11:48 pm - Reply

      These being the regulations that were in fact slashed by Margaret Thatcher in the 1980s?
      There is a very deep, dark hole in your logic.
      As for stoking a housing bubble for electoral gain, you’re thinking of George Osborne, starting in March last year.
      After the crash, Alistair Darling put forward policies that had the economy growing again. Then in came the Coalition and Osborne killed growth stone dead for three long years.
      Where did you get your information – a book of fairy stories?

      • vomsters September 14, 2014 at 10:52 am - Reply

        The Teeny Tiny Tory Bedtime Book

  2. jray September 14, 2014 at 12:47 am - Reply

    I returned to the UK in 2003 after a 27 year walk around,within 6 months I had a credit card (Maxed) and was offered a unsecured loan by XXXX for £50.000.I was stunned,I started a business,paid on the loan,after the first payment I received a bill for insurance, it was greater than the payment for the principal,I tried to cancel it to no avail..I tried to pay back what was left of the money,it was all or nothing..I £ucked off!

Leave A Comment