Former Cabinet Sec: Britain never on “brink of bankruptcy”

A key premise of George Osborne's argument for rapid spending cuts has been questioned by former civil service boss, Lord Andrew Turnbull.

A key premise of George Osborne’s argument for rapid spending cuts has been questioned by former civil service boss, Lord Andrew Turnbull.

Responding to questions from Chuka Umunna MP, the former Cabinet Secretary said it he didn’t agree with Osborne’s claim that Britain had been on the “brink of bankruptcy” and that Britain was never at risk of a sovereign debt crisis.

Watch it:

UMUNNA: Do you think it’s accurate to describe the UK as being on the brink of bankruptcy?

TURNBULL: No I don’t. But I think it was essential, for a slightly different reason, to have a deficit reduction programme.

The Chancellor claimed in his spending review speech last week that Britain had been on the “brink of bankruptcy”. Lord Turnbull also poured water on fears expressed by Nick Clegg and Chris Huhne among others over a Greek-style sovereign debt default:

“I always thought that we were capable of producing a financial settlement that wouldn’t take us into Irish or Greek problems. Secondly, a very large part of our debt was domestically held. If people are going to sell gilts they’ve got to buy something else. Who are these great shining example of people who are issuing really rock solid debt that you want to buy?”

Lord Turnbull also said that Liam Fox’s letter to David Cameron was “written to be leaked“.

Gordon Brown, once described by Turnbull as running the Treasury with “Stalinist ruthlessness” was not spared by the former civil servant. Turnbull said Brown’s settlement letters in the 2000 and 2002 spending reviews were “arrogant and offensive” and that the Golden Rule had the effect of worsening boom and bust.

33 Responses to “Former Cabinet Sec: Britain never on “brink of bankruptcy””

  1. Julia Ault

    RT @leftfootfwd: Former Cabinet Sec: Britain never on "brink of bankruptcy" http://bit.ly/be58r7

  2. Norvik_1602

    @juliadesigns But Lord Turnbull doesn't give Gordon Brown a big thumbs up there either, does he? http://bit.ly/be58r7

  3. Wendy Maddox

    RT @leftfootfwd: Former Cabinet Secretary Andrew Turnbull says Britain was never on "brink of bankruptcy" http://bit.ly/cRYYM6

  4. Nick H.

    RT @leftfootfwd: Former Cabinet Sec: Britain never on "brink of bankruptcy" http://bit.ly/be58r7 – The Reichstag burns….again.

  5. maxy

    I fail to understand why the Labour Party and Left in general have failed to capitalise on the inherent flaws in George Osbourne’s characterisation of Britain’s economy in terms of the following:
    • The British economic being on the brink
    • The Fitch credit ratings on which George Osbourne relies heavily do not refer to the British economy as being on the brink.
    • The illegitimate comparison between the economies of Ireland, Portugal, and Spain on the one hand and the British economy on the other. Surely a more legitimate comparison would be between the UK and Germany/ France.
    • The failure to set in context the current quarterly UK GDP growth figures which should have been analysed not in terms of one quartet but in terms of a trend over several quarters.
    • The Govt talked about 250.000 jobs created in the last quarter, but we have no clear information about what these jobs are. I suspect these new jobs are either low paid jobs in the care/service sector or are in the new Olympic village.
    • How the UK structural deficit as a per cetnage of GDP compares with Germany or France. I think you will find that Germany and France have a higher level of deficit.

Comments are closed.