Nick Clegg falsified the story, thereby rewriting history. He then got himself into Government, and then ruined the country.

It is easy to see the magnitude of Clegg’s failure when you refer back to the Budget debate for 24 March 2010, prior to the 2010 General Election (as recorded in Hansard). The context is some quibbling over the growth figures in David Cameron’s response:

This is in fact what has happened since May 2010. In April 2012, new figures revealed that Britain had plunged into the first double-dip recession since 1975 and is enduring its longest economic slump for a century.  This was in fact the first double dip for 37 years and a nightmare scenario for Chancellor George Osborne, who predicted a rapid return to growth when he embarked on his austerity programme, and Mr Cameron, who had previously declared Britain ‘out of the danger zone’.

Source: tradingeconomics.com

It suited Nick Clegg and Vince Cable to defer as much blame onto Gordon Brown for the recession, rather than to blame global factors.

Indeed, Cable, Clegg and Osborne have been wishing for the Eurozone to implode much more than it has, in the same way that they have always hoped for the GDP figures to be ‘revised upwards’. Northern Rock, indeed in 2007, was one of many banks throughout the world to take on risky investments. Many of the assets that these banks had on their balance sheets started to lose their value (like ‘loans gone bad’ or securities derived from mortgages and other loans). The Bank of England became the last resort for the British banks as liquidity froze throughout the global market due to a lack of confidence. The global crash was predicted by Roubini (2010) who said: ‘As homeowners defaulted on their mortgages, the entire global financial system would shudder to a halt as trillions of dollars’ worth of mortgage-backed securities started to unravel’ but the United States and the United Kingdom refused to acknowledge sub-prime mortgages as a threat to the economy’ (N. Roubini and S. Mihm (2010), Crisis Economics: A crash course in the future of finance, Allen Lane, United Kingdom, 2010, p.15). At the time, Nick Clegg criticised the Labour government for not having done anything about getting banks to lend:

However, Clegg is being utterly disingenious about the UK government’s ability to lend money given the overall international climate. Firstly, banks are affected by Basel Capital rules that financiers keep complaining about; subtle reforms on, say, liquidity coverage ratios are also “biting hard”. This overall, it is argued, makes banks far more conservative about lending money and fearful about how they manage their balance sheets. Gillian Tett in the Financial Times in October 2011 gave a very elegant overview of the situation, as it was then. Nick Clegg appears now to have some sort of weird amnesia what had caused the deficit to balloon, but he was very clear about the bail-out at that time.

Clearly then, the “deficit” story is the one to base the entire credibility of the raison-d’être of the current Coalition, but the facts clearly state that prior to the global financial crash the deficit being run by Labour was comparable to that run by Norman Lamont and Ken Clarke, as clearly shown here:

Therefore, it is perfectly clear that David Cameron and Nick Clegg have hugely misled the UK on the situation it is currently in, and ‘one lie leads to another’ unfortunately. The Conservatives, Andrew Neil and the Spectator, have been fixated on whether or not Ed Balls knew there was a structural deficit in 2008, whereas English law fundamentally relies on there being a presumption of innocence. Ed Balls is convinced that he, and the Bank of England, did not realise there was a structural deficit in 2008, and indeed the more relevant situation is what to do now. For example, in its twice-yearly fiscal monitor, the IMF said that for countries including the UK: “If growth should fall significantly below current projections, countries with room for manoeuvre should smooth their planned adjustment over 2013 and beyond.” This represents conditional support for Mr Osborne’s deficit reduction plan so long as growth does not disappoint again. Indeed, Andrew Neil and colleagues then curiously perseverate on how much Ed Balls knew then, whilst being completely obvious to any of the arguments about why the GDP remains stagnant now, why the banks fail to lend, and how a failure in securitised mortgages caused a global recession.