Spending Review: Osborne to take 10 years to simply get back to 2007/08

Considering the government likes to throw every question they are asked in the chamber back at Labour - i.e. "we're clearing up the mess left by the last government" - it's strange how, going by the projections released along with today's spending review, it's going to take until 2017/18 for the Tories to be back where the Labour government was in 2007-2008.

Osborne and cameron 2

Going by the projections released along with today’s spending review, it’s going to take until 2017/18 for the Tories to be back where the Labour government was in 2007-2008.

This raises an important question: If the last Labour government was so atrocious, and spending so out of control, why is it going to take 10 years for total managed expenditure as a percentage of GDP to get back to where it was before the financial crisis hit?

Could it be that, rather than Labour spending being out of control, it was actually the global financial crisis which caused spending as a percentage of GDP to rise?

If not, then, as I say, why does it take 10 years for the Tories simply to get the country back to the position it was in under Labour in 2007/08?

If Labour spending was really out of control in ’07/’08 under Labour, how on earth can it be considered a success by George Osborne to be in the same position 10 years later?

Click graph to zoom

GDP new graph

5 Responses to “Spending Review: Osborne to take 10 years to simply get back to 2007/08”

  1. LB

    Yep, but in the mean time the borrowing has rocketed, and the pension debts gone through the roof.

    No state pensions is the plan, both from Labour and the Tories.

    That’s what a welfare cap means in practice.

  2. John

    We’re a long way from the Beveridge report, but pensions has been a ticking time bomb for years.

  3. LB

    Beveridge proposed something different. Something that would have made a real difference to the poor.

    He proposed a fund in peoples names. For a median wage earner 26K, that would have resulted in a fund of 627K, enough for a 19K RPI linked, joint life pension from 65. Almost 5 times the state pension.

    However, politicians stole the money. Now they can’t pay. [The difference is compound interest, and money diverted to pay for other things]

    It’s been going on for a long time. You then have to question, why hasn’t it stopped earlier. It goes back to a simple accounting fraud. Don’t report the debt, even though the accounting standards say you have to. End result the public hasn’t been told.

  4. John

    Yes I know. Politicians are liars and cheats; they have to be in order to succeed in politics, a system which is more warped than the welfare state is today.

    The truth is both systems are in need of a serious overhaul

  5. LB

    I did some analysis the quantify the loss to a median worker (26K) of the welfare state.

    If they had a Beveridge system, they would have had a fund of 627K. Instead the state pension, which is going to be cut, costs 152K. That’s NI into the FTSE with charges.

    The difference, 475K, is what they have lost. They will never get it back

    That to me is evil. The consequences are that those median wage earners will be on welfare, and they can’t afford the welfare.

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