Labour 'means stock market decline'
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Friday, 01, May 2009 12:01
By politics.co.uk staff
Labour governments always trigger a stock market decline, and this one is no different, according to a City historian.
New research by John Littlewood shows the London stock market has fallen 26 per cent since Tony Blair walked through the doors of Number 10.
The academic found the stock market has reacted in a similar manner during every other period of Labour rule since 1945.
Gordon Brown "underestimated the strength of the economy in his first term before embarking on a traditional Labour tax and spend policy in his second and third terms," the author wrote.
"This led to chronic government deficits in each of his last six years as chancellor and an economy ill-prepared to deal with recession. Gordon Brown benefited from a golden inheritance in 1997 but he handed on a poisoned chalice to his successor in 2007."
Mr Littlewood's book, The Stock Market under Labour: the legacy of Gordon Brown, published today, claims every other major market has performed better than London over the last 12 years, apart from Japan.
The ranking of the UK in each of the three main international league tables of world competitiveness has also steadily fallen since 1 May 1997, the author indicates.