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’.
60 Responses to “Once again on Labour’s ‘out of control’ spending”
Cole
Off he goes again. I seem to remember we had a Triple A rating in 2010, but no longer. Thanks. Mr Osborne
Maybe LB should set up his own rating agency, with his own unique take on the economy. He should show a little enterprise instead of spending his time complaining.
Cole
Off he goes again. I seem to remember we had a Triple A rating in 2010, but no longer. Thanks. Mr Osborne
Maybe LB should set up his own rating agency, with his own unique take on the economy. He should show a little enterprise instead of spending his time complaining.
Mason Dixon Autistic
If you only look at total debt compared to total income, you’re distorting and being wilfully blind by super-imposing a snapshot on your field of view. Neither debt nor income are static. GDP ratio reflects what you choose to exclude: the control the debtor has over their income and in this case the debtor is a nation state with a reserve currency.
Mason Dixon Autistic
“I’m not including future debts. I’m just including past debts.”
Do you mean current debts? Because if you really mean to say ‘past debts’ then you are talking gibberish: we have already paid them.
OldLb
Out of interest.
What’s a past debt in your world?
Wha’t a future debt in your world?