In these pages last month, I urged Government and Parliament to learn the lessons of Britain's Olympic success; that public investment results in improvements across the board and that this can be seen not only by our Olympic success but in our hospitals, schools, police and other public services. Little did I know, that only a few weeks later, this same record breaking injection of public spending would help to protect us in the midst of the international financial meltdown.
We are now in uncharted financial waters, but we know that areas with economies heavily reliant upon public services and public spending are better equipped to emerge from the current financial situation than those areas whose economies are based heavily upon fragile private sector markets. Over the long term, West Cumbria needs to expand its private sector based economy. I am working to help achieve this and it cannot be done overnight, but even with a large expansion of the private economy, the public sector will always be an integral part of our economy. Without the money Labour has invested into our public services in West Cumbria, we would be bracing ourselves for the worst. Thankfully, although we are in for a difficult time, our area should come through better than most.
Clearly, this is no time for a novice, let alone one who has consistently voted against all of the public spending investments which are now standing us in such good stead. So decisive has Gordon Brown's handling of the crisis been, that he is now leading the response of the major economies of the Western world. The US is looking for the Prime Minister's lead, as is France, Germany and elsewhere. Paul Krugman, the 2008 winner of the Nobel Prize for Economics this week heaped lavish praise on the Government after describing the Prime Minister as acting with "stunning speed" He continued, "What we do know is that Mr Brown and Alistair Darling have defined the character of the worldwide rescue effort, with other wealthy nations playing catch-up. Luckily for the world economy, however, Gordon Brown and his officials are making sense. And they may have shown us the way through this crisis."
However the ‘stunning speed' of the government's response’ should mean that British politics has now changed forever. The hundreds of billions of pounds of British taxpayers' money which has been pumped into the banks is not for the benefit of the reckless fat-cat money men who gamble with our homes and futures. These people will be held to account sooner rather than later (and I have already called for punitive measures to be introduced) - but the cash investment is for our benefit not theirs. We need our banks to be healthy financial institutions, providing responsible credit for businesses and individuals. However, the speed of the policy response should now be emulated in other areas. So we need billions more to erradicate child poverty? Solve it quickly. So we need more money in the NHS to provide ever more expensive drug threatments? Solve it quickly. Money for critical infrastructure improvements? Solve it quickly.
Policy makers will rightly argue that these bank investments aren't simply cash investments and that this money is actually being used to buy stakes in failing banks. When the market recovers the shares can be sold (at a profit) and to the benefit of the taxpayer. True; but above all else my sense is that the current crisis has taught many of us a lesson that some of us had forgotten: cash is not King, greed is not good and we must now rebuild our financial system in a way which rewards responsibility, not avarice. Markets need morals.
There is a long way to go before we can claim to have fully weathered this storm, but the world's leading economist believes that we have the best people in the world to see us through it. Now, more than ever before, we are in this together.