For forty years our economy has an unenviable history, under governments of both parties, of boom and bust. Stop-go has meant higher interest rates, less investment, fewer successful companies and lost jobs. It has been the inevitable result of a failure to take the long-term view.
So the real choice facing Britain in the coming Budget and beyond is between, on the one hand, muddling through as we have done for decades from one stop-go cycle to another.
Or, on the other hand, breaking with our past, burying short-termism and securing long-term strength through stability, sustained increases in productivity, and employment opportunity for all.
I wonder what he was thinking when he said this. Did he imagine steady, unspectacular growth in order to secure 'long-term strength through stability'? Or, even back then in 1997, did he have in mind what actually took place over the last ten years?
And what do I think did happen over the last decade or so? Well, it's got a lot to do with house prices. The Bank of England just released the latest figures showing how much money people are using to pay off their mortgages. In the last three months of 2010, seven billion pounds (or 2.7% of post-tax income) apparently went into reducing people's mortgage borrowing. This is in stark contrast to the period up to early 2008, when according to the BBC withdrawal of equity from homes was giving people a 9% increase to their post-tax income. I have not checked the figures but please do say if you think they're wrong!
Now I'm guessing that if my post-tax income got a 9% boost then I'd spent a fair chunk of that on stuff, on things that will feed in to the GDP figures. To steal a phrase I just read on a political blog one big reason why the economy is now in so much trouble is that 'we effectively brought forward into 2000-2010 the domestic element of economic growth of 2010-2020'. What people took out of the value of their homes, they are now paying back at a record rate (again, so say the BBC).
Why do I blame Labour, in particular Gordon Brown, for this? Because it was under their watch that house prices increased so much, allowing people to use their house as a giant cash machine. I suppose this would be all very well if house prices could just keep on rising in order to fund the increased household spending, but how can that be? How could house prices carry on rising at upwards of 10% a year? Did Gordon Brown think this is what abolishing boom and bust looked like?
So the growth in the economy was to a large extent funded by an unsustainable boom in house prices. And my point is really that Labour could have done something about this. They could have regulated the income multiple that banks etc. were permitted to lend for a mortgage. They could have left housing costs in the inflation calculations (they were removed in December 2003) and raised interest rates to keep inflation under control. And finally they could have been more cautious about the shared ownership and key-worker schemes that have expanded so much in recent years. People don't need all these clever schemes to help them 'buy' their first home if house prices are kept at a sensible level.
And all this means I have a hard time accepting anything that Labour say now about the current government endangering the UK's future prosperity. No, Labour did that themselves when they failed to keep a lid on house price rises and, of course, government spending while they were in power.