After ten weeks or so of a Coalition Government, I thought it would be helpful to take stock as to where we are at so far.

However, the Government’s progress has to be put into context.

For 13 years, we had New Labour.

The nation has to be grateful to Lord Mandelson, who during those 13 years rose from back-room boy to First Secretary of State, Deputy Prime Minister and Lord President of the Privy Council and thus knew precisely where the bodies were buried.

As he dug the graves.

What Mandelson’s book made clear is that the real story of Labour’s 13 years in power is the criminal destruction of our nation’s finances.

Our reputation on the world stage.

- and our political institutions.

When Labour came to Government, the national debt was around £350 billion.

That national debt had almost doubled even before the difficulties of 2007 when most Governments were using the surpluses they had accrued during the good years at a pay down debt.

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It is quite clear that Tony Blair had no idea what was going on.

No idea of the threat which debt posed to his legacy because he was simply economically illiterate.

Whilst Blair was running New Labour and Brown was running the economy, the state was exploding in size and cost.

Mandelson now describes Blair as:

“weak and indecisive”

Well Britain today is paying a painful price for that weakness and will be paying for a long time to come and so far as Brown is concerned, Mandelson considered him to be not just:

“psychologically flawed”
but
“mad, bad and dangerous”

And sadly for all of us, Brown had economic policies to match.

The simple fact is that during Brown’s leadership, the UK was in a pit of debt and the Labour Government just simply kept on digging.

Officially the size of the UK’s public debt is £903 billion but as the Independent observed yesterday, the toxic legacy for our children and grand-children is nearer £3.8 trillion if one takes into account the heavy burden of off balance sheet liabilities, such as:
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- future payments for the State old age pension – £1.1 trillion to £1.4 trillion

- unfunded public sector pensions for teachers, NHS staff and civil servants – £770 billion to £1.2 trillion

- payments under private finance initiative contracts – £200 billion

- contingent liabilities (eg bank deposit guarantees) – £500 billion

- nuclear power plant decommissioning – £45 billion

- impact of financial sector interventions – £1 trillion to £1.5 trillion

So I think this suggests the realistic total liability of the public sector could be as much as £3.8 trillion – that is 38 followed by eleven noughts.

It’s not surprising that for so long the Labour Party have been in denial about the public sector deficit and the reality is that in the last years of the Labour Government, the Labour Party simply couldn’t decide whether or not to admit that large spending cuts were coming.

It’s clear that Ed Balls almost had to beg Brown to use the word “cuts” in Brown’s 2008 speech to the Trade Union Congress.

At least by the General Election, the Labour Government had got itself into a position where they acknowledged that if they had been returned to Government, they would have had to have halved the deficit over four years.

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As the Institute for Physical Studies demonstrates, this would mean public spending cuts for each Government department under Labour in the region of 20%.

In reality not very far off the 25% that the Chancellor of the Exchequer realistically is looking at for savings from Government departments at present.

So the realities are that Labour eventually had their own plans for cuts in public spending of a similar magnitude to those which the Government are almost certainly going to have to carry out. Although it is important to remember that these are Labour cuts, they were brought about by the fact that Labour was profligate and turned public spending into a false idol and they came about because Labour took no action to tackle public spending or to make provision during the good days

The sad fact is that Labour’s legacy to Britain was to leave the country with the largest deficit in our peace-time history.

If we don’t tackle this deficit, then within five years we will be paying out £70 billion in debt interest a year.

More money than we spend on educating our children, policing our streets or defending the country.

Tragically, just as all Labour Governments end in economic failure, so it is left to this Government to clean up after them.

Labour created the mess – the Coalition Parties have come together to deal with it.

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In my judgement, the Coalition Government have made a bold start. Since he entered Downing Street, David Cameron has set a very fast pace.

We have seen plans for the biggest revolution in the NHS since 1948.

We have seen plans to dramatically improve our Police services and we have seen a bonfire of illiberal anti-terror laws.

Not surprising that even Ed Miliband in a recent article in the New Statesman has to acknowledge that so far as Labour was concerned:

“Iraq was a mistake”

“the state was too over-bearing in relation to civil liberties under Labour”

“Labour left more people working harder and longer for less money”

And Ed Miliband acknowledged that Labour under Brown and Blair had become the Party of defending bankers’ bonuses and ID cards.

So in reality on everything with the tough decisions from out-of-control debt to reform the health service as the welfare state, Labour avoided the difficult decisions whereas David Cameron is taking on the challenge.

Taking on the challenge of taking on the quangos and some public sector unions which under Labour became so deeply emeshed.

Of course, none of this is going to be easy.
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There is going to be a spending review over the summer. The Government are going to have to look at everything to make sure that we do it in a way that protects those in genuine need, protect those with disabilities, protects those who can’t work but also encourages those who can work to get into work.

And let us not forget

Labour had no bank levy – we’ve imposed a bank levy.

Labour had a system where the richest paid lower tax rates than those who cleaned their offices – we’ve raised capital gains tax in a way that is fair and we have listened to the concerns of those who said that we should not raise it so that it became counter-productive – that we have done.

Labour hit the lowest paid with a 10% tax fiasco – we are lifting 880,000 of the lowest paid out of tax altogether.

Labour increased the pension by a desultory and insulting 75p – we are reintroducing the earnings link – something Labour didn’t do for 13 years.

Under Labour, child poverty was rising. We are making sure it doesn’t.

We are determined to tackle Labour’s record budget deficit so as to keep interest rates lower for longer.

- get the economy growing
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- protect jobs

- maintain the quality of our public services

Also I think it is noteworthy that given that we now know just simply how dysfunctional the Blair/Brown relationship was for all those years, it looks all the more ridiculous when put alongside David Cameron and Nick Clegg’s government of functioning grown-up adults.

If leaders from two different Parties can co-exist and settle disagreements and come to a sensible Party policy and move forward the machinery of Government, why couldn’t have the Labour Party manage that as a single Party !

None of us at Westminster have any illusions that the next months are going to be difficult but we have demonstrated that the Coalition Government have the capacity and the ability to govern and the determination to do that which is right for Britain.

Tony Baldry MP