Some things are worth repeating because they are that important and some things should be repeated because they were not heard, or listened to, the first time. Some fall under both categories.
Some things are worth repeating because they are that important and some things should be repeated because they were not heard, or listened to, the first time.
Some things fall under both categories.
It is testament to a failure in communication on the left that in the years immediately after the financial crisis the consensus was allowed to form that under Labour spending got out of control. The hangover from this communication failure persists in the public’s continued reluctance to trust Labour on the economy.
It is seemingly forgotten now, but the Tories promised to match Labour’s spending plans right up until 2008; in the aftermath of the 2010 election, however, a drawn-out Labour leadership contest allowed David Cameron to define the post-crisis landscape as the hangover of a spendthrift Labour Party.
The country was in a mess and the only ones who could clear that mess up were the Conservatives, who would reign in the excesses of the Blair and Brown years and bring some temperance to proceedings.
It is worth repeating, then, something pointed out by Martin Wolf in today’s Financial Times (£): in the years leading up to the 2007/08 financial crisis – the supposedly out of control, spendthrift years – UK net public debt was close to its lowest ratio to GDP in the past 300 years.
As the graph below shows, government debt as a percentage of GDP was well below average under Labour and rose, predictably, as a response to the collapse in GDP – as it would. And why does this matter? Because the relevance of the amount of money spent by government is related to how big a proportion of GDP it is, not how much is spent in total.
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While debt is now higher than it has been for a considerable period of time, the blatant dishonesty in the claim that spending was out of control under Labour has more to do with finding a rationale for stripping back the state than it does with dealing with any perceived ‘debt crisis’.
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60 Responses to “Once again on Labour’s ‘out of control’ spending”
Wizard
“The cost of keeping the income generators slaving for the state going in health care costs etc.”
Sorry Ayn, I thought you were someone else.
They hate her because she won
So Labour run up the biggest peacetime deficit in our history and you would have us think that was responsible. This is supposed to be an evidence based blog. It appears to cater to immature idiots who will swallow this sort of rubbish without any thought.
blarg1987
To challange you on the PFI point, PFI is included in expenditure as most budgets are squeeezed because of PFI costs it sounds like you want to double count it i.e. count the cost of PFI in the form of the payment made from taxation, then count it again the full amount after the contract expires in 20 – 30 years time.
blarg1987
What would be interesting would be doing a cost analysis of how much it will cost long term i.e. 30 40 years to the tax payer and how much would we save if we do upfront costs now. Since goverments like to play the family budget game it would be like instead of renting a house we buy a house instead, in the short term it is a higher capital cost in the form of getting the mortgaage but in the longer term saves money as over the same period i.e. infinity renting would be more :).
robertcp
This is all true but the financial crisis was not an act of God. Labour should have realised that there was something very wrong with the financial system.