A new report claims the London Stock Market has fallen 26 per cent during the 12 years Labour has been in government.

In his research, city historian John Littlewood found the stock market has actually fallen in every other period of Labour government since 1945.

Since Tony Blair entered No 10 Downing Street on May 1st 1997, every other major market in the world has performed better than London, expect for Japan.

The Stock Market under Labour: the legacy of Gordon Brown, published today, claims the stock market has always performed poorly under Labour governments, with equity indices always failing to match inflation, let alone participating in economic growth.

Under the current government, however, it has performed worse, falling 26 per cent in real terms, and adjusted on a CPI basis; on the RPI, the fall in the London Stock Market would have been 33 per cent, the report states.

Higher taxes and heavier regulation on business have undermined UK competitiveness, Mr Littlewood claims.

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 concludes prime minister 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”.

“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,” he adds.