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Sustainable Economy > Published by Will Straw, October 28th 2010 at 12:26 pm

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

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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.

  • http://twitter.com/joshuwahwah/status/28979578311 Joshuwahwah

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

  • http://twitter.com/pmphillips/status/28979726195 Pete Phillips

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

  • http://twitter.com/georgeluke/status/28979767501 George Luke

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

  • http://twitter.com/duncanweldon/status/28979843236 Duncan Weldon

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

  • http://twitter.com/lescromps/status/28979861636 Lescromps

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

  • http://twitter.com/superpaddy1601/status/28979904155 Edward Leathem

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

  • http://twitter.com/c_a_jonestechno/status/28979953974 CAROLE JONES

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

  • http://twitter.com/wdjstraw/status/28980361350 Will Straw

    Key premise of Osborne's #SR10 undermined by Ex-Cab Sec Lord Turnbull – Britain never on "brink of bankruptcy" http://bit.ly/cRYYM6

  • http://twitter.com/shamikdas/status/28980496062 Shamik Das

    2day on @leftfootfwd: "Brink of bankruptcy" myth: http://is.gd/gofxb Cable latest: http://is.gd/gofzr & HB cuts analysis: http://is.gd/gofCm

  • http://twitter.com/councillortudor/status/28980572700 Tudor Evans

    RT @wdjstraw: Key premise of Osborne's #SR10 undermined by Ex-Cab Sec Lord Turnbull – Britain never on "brink of bankruptcy" http://bit.ly/cRYYM6

  • http://twitter.com/john_hickey_fry/status/28980688204 John Hickey-Fry

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

  • http://twitter.com/liammckee/status/28980718564 Liam McKee

    RT @wdjstraw: Key premise of Osborne's #SR10 undermined by Ex-Cab Sec Lord Turnbull – Britain never on "brink of bankruptcy" http://bit.ly/cRYYM6

  • http://twitter.com/jpw84/status/28980780652 Jonathan

    RT @wdjstraw: Key premise of Osborne's #SR10 undermined by Ex-Cab Sec Lord Turnbull – Britain never on "brink of bankruptcy" http://bit.ly/cRYYM6

  • http://twitter.com/cllrkrichards/status/28980890645 Kevin Richards

    Finally the Myth is being dispelled RT @leftfootfwd: Former Cabinet Sec: Britain never on "brink of bankruptcy" http://bit.ly/be58r7

  • http://twitter.com/dphodgson/status/28981164944 David Hodgson

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

  • http://twitter.com/westernshores/status/28981550599 Pen

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

  • http://twitter.com/rattlecans/status/28982066351 Ma

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

  • http://twitter.com/peterkenyon/status/28982436097 Peter Kenyon

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

  • http://twitter.com/grahamjeffery/status/28983533164 Graham Jeffery

    RT @wdjstraw: Key premise of Osborne's #SR10 undermined by Ex-Cab Sec Lord Turnbull – Britain never on "brink of bankruptcy" http://bit.ly/cRYYM6

  • Anna

    And your point is?

  • http://wjshgenius@talktalk.net william

    Note that Turnbull fairly and squarely blames Brown.We need to get him out of the Commons, now.Since Turnbull claims it was essential to have a deficit reduction programme, perhaps Brown and Darling will explain why they flunked a CSR when they were in office.This handed the iniative and the election to the tories.We will not be a credible opposition, let alone the next government,until we have dealt with the manifest failures of Brown, after 2001.Finally, Turnbull should note the attractions of holding Scandinavian and Australian debt, gilts are not the only game in town,but he may have missed the abolition of exchange control.

  • http://torylies.blogspot.com Richard Blogger

    The point is very simple: the reasons given by this tawdry government for destroying out public services and welfare state are to “protect us” from:

    1) Bankruptcy
    2) A Greek-style financial crisis and
    3) Johnny Foreigner who they told us “owned all the national debt”.

    Turnbull says that all these things are utter nonsense. I bet you won’t see the BBC showing this.

  • http://twitter.com/shamikdas/status/28987620707 Shamik Das

    Gr8 q from @ChukaUmunna referring to the former Cabinet Sec's comments the UK was never on "brink of bankruptcy" (see http://bit.ly/cRYYM6)

  • http://twitter.com/maenllwyd/status/28990577373 Dominic Smith

    RT @wdjstraw: Key premise of Osborne's #SR10 undermined by Ex-Cab Sec Lord Turnbull – Britain never on "brink of bankruptcy" http://bit.ly/cRYYM6

  • http://twitter.com/stepearce/status/29016160324 Stuart Pearce

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

  • http://twitter.com/juliadesigns/status/29018055573 Julia Ault

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

  • http://twitter.com/norvik_1602/status/29021352688 Norvik_1602

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

  • http://twitter.com/mswigsy/status/29024891670 Wendy Maddox

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

  • http://twitter.com/nickbloke/status/29030942893 Nick H.

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

  • 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.
    •

  • scandalousbill

    It seems to me that the CSR provides the basis for the UK positioning of the American style neo-con ideology. Whereas the US tax breaks for the rich, dating back to Reagan and Characteristic of the bush years are replicated by Gideon’s recent tax holiday agreement with the Swiss, the Vodafone exemption settlement, the regressive VAT rise and the minimalistic bank levy of 2.5 billion.

    The IMF is held out as justification for massive cuts impacting the social fabric of the UK, but ignored when setting the levy on UK banks. The Britian on the brink comparisons with Greece and Spain, the Canadian eport oriented solution to growth have no sound basis for comparison to the UK. The cuts hit the most vulnerable the hardest while notions of growth are based upon the simple notion of replacing the role of a reduced state involvement with private enterprise. There is no plan, just an ideologically based wish list for areas of prosperity. Whether it is the quick shock of double dip recession or the slow limbo of stagnation like the Japanese experience, the decline of the UK economy on the world stage has passed the brink and the slide is now underway.

  • http://twitter.com/newbloke/status/29487716183 Newbloke

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

  • http://nfnw.wordpress.com/2011/01/09/prime-ministers-weapons-of-mass-deception/ Prime minister’s weapons of mass deception « News From Nowhere

    [...] aside the fact that Britain was never actually on the brink of bankruptcy as the government [...]