KAI RYSSDAL: There was a neat bit of economic and political symmetry in England today. As Prime Minister Tony Blair was announcing the date of his departure from office, the Bank of England was raising interest rates.
Blair will step down on June 27 after 10 years in power. British interest rates, meanwhile, are at their highest point in six years — in part because of inflation that critics blame on Blair’s policies.
The Prime Minister talked about his legacy today. He acknowledged Iraq had been bitterly controversial. But he claimed his handling of the British economy had been one of his major successes. From London, Marketplace’s Stephen Beard looks back.
STEPHEN BEARD: Ten years ago, Tony Blair swept into office buoyed up by a massive victory at the polls and brimming over with optimism.
TONY BLAIR: A new dawn has broken, has it not?
His campaign rallies had pulsated with a theme song. The anthem of his early years in power: “Things Can Only Get Better.”
[MUSIC: Things Can Only Get Better]
Ten years on, as Blair heads for the exit, the verdict of many economists is that things have gotten better.
JOHNATHON LOYNES: Gross Domestic Product has grown at an average rate of about 2.8 percent, which is rather stronger than we saw in the previous 10 years.
Johnathon Loynes of Capital Economics says under Blair general economic conditions have improved.
LOYNES: Unemployment has been falling steadily in that period and we’ve seen pretty low rates of inflation. So I think, overall, the economy is in pretty good shape.
But few Brits seem prepared to thank Tony Blair. According to opinion polls, most people feel that his finance chief, Gordon Brown, has been the main architect of whatever economic success Britain has seen.
BRIT: I am better off, but I wouldn’t put that to Blair’s credit . . .
BRIT 2: It’s been Gordon Brown, you know, at the sort of helm. The economy has improved under Blair, but I think it’s all been done due to Gordon Brown.
Then there’s the question of relative prosperity. Average weekly pay in Britain has risen by 71 percent over the past decade. But as in the United States, income inequality has risen, too. The rich have got very much richer. Many people on average incomes don’t feel much better off after 10 years of Tony Blair.
BRIT: Economically speaking, I would say a definite no. But that may just be my personal circumstances.
BRIT 2: Swings and roundabouts. I know I’m better off, but I don’t feel it.
BRIT 3: There’s clearly been lots of wealth generation, but whether it’s equally distributed I think a very different issue.
But there’s another more fundamental problem with Blair’s economic legacy: The good times, such as they are, may not last much longer. Much of the economic growth of the past decade, say the critics, has been built on a shaky foundation.
The average price of a house has tripled since Blair took power. Opposition economics spokesman Vince Cable calls this a dangerous bubble.
VINCE CABLE: If it does burst, the problem is that a lot of people on mortgages are potentially very exposed. To get on the housing ladder now, you borrow five times your income in many parts of the country. So any downturn in the economy, and any weakening of the housing market, puts those people in great difficulty.
This spoof song from the 1990s has been reprised and is doing the rounds on the Internet, raising the specter of a housing collapse.
[MUSIC: “Our house in the middle of a slump. Our house, no-one wants to buy this dump.”]
But, it must be said, the doom mongers have been forecasting a property collapse for years. For Tony Blair, as he heads away from the cares of office and into multimillion-dollar book deals and lecture tours, there is only one safe prediction.
[MUSIC: Things Can Only Get Better]
In London, this is Stephen Beard for Marketplace.
News and information you need, from a source you trust.
In a world where it’s easier to find disinformation than real information, trustworthy journalism is critical to our democracy and our everyday lives. And you rely on Marketplace to be that objective, credible source, each and every day.
This vital work isn’t possible without you. Marketplace is sustained by our community of Investors—listeners, readers, and donors like you who believe that a free press is essential – and worth supporting.