Labour’s leadership contenders have been tripping over themselves to say that Labour overspent in government
Labour’s leadership contenders have, depressingly, been tripping over themselves to tell a waiting media that Labour overspent in government. This seems as damaging for the future of the party as remaining silent about Labour’s public spending performance in the months after the 2010 general election defeat.
Tom Watson, on the BBC’s Sunday Politics programme, dismissed overspending concessions to the media in an interview with Andrew Neil. Not only an honest answer but one supported by the facts. So well done, Tom, for not falling into a bear trap that is potentially as damaging to Labour as the Tories’ constant reminders of the ‘Winter of Discontent’ from 1979 to 1997.
The reality, or course, is that Labour’s public spending between 1997 and 2007, when the international financial crisis hit, was not only affordable but vital to rebuild the public realm after eighteen years of Tory disinvestment.
As the chart shows, the UK’s net public debt to gross domestic product ratio, after one of the most cataclysmic financial crashes in history, remains historically low. And, I assume, no-one would argue that the UK wasn’t an economic success and a trade superpower for most of the 18th, 19th and 20th centuries.
Coming closer to the present, it is interesting to compare the debt record of the governments of Blair and Brown with those of Thatcher and Major. The very lowest debt to GDP ratio in the Tory years was recorded in 1991 at 25 per cent. But when the Tories left office in 1997, it had grown again to 42 per cent. Labour brought the ratio down to 36 per cent in 2007 before the onset of the credit crunch. But if Labour had achieved the very best of the Tory years, debt to gdp would still be 69 per cent today, equating to about £1.2tr in debt.
This underscores that ‘overspending’ by Labour in government was not a cause of today’s debt problem.
A second line of attack is that Labour should have ‘fixed the roof’ while the ‘sun was shining’. This won’t do either. What do commentators who raise this issue think Labour was doing from 1997 to 2007 when it raised NHS spending to the EU average, rebuilt local government services, invested heavily in education, partly rebuilt the public transport system, upgraded international development, created Sure Start centres across the country, kick-started the decent homes programme in social housing, invested in community regeneration schemes, introduced policies to tackle child and pensioner poverty, and created the Child Trust Fund?
It’s often forgotten that public services and infrastructure had fallen into disrepair by 1997 and that satisfaction with public services had plumbed the depths in the 1980s. The power of public investment to drive satisfaction is shown in the NHS where satisfaction doubled from 35 to 70 per cent between 1987 and 2007. It should also be remembered that Labour’s investment was supported by David Cameron and George Osborne as a means of getting into government; although forgotten soon afterwards.
Austerity is now dismantling much of what was achieved in the name of reducing the UK’s public debt, which is, after all, only average for the G20. That the UK was comparable to Greece in 2010 and ‘on the brink’ was a case of successful Tory spin and is not borne out by the facts. So keep correcting those interviewers Tom.
Kevin Gulliver is a contributing editor to Left Foot Forward and a director of Birmingham-based research charity the Human City Institute and chair of the Centre for Community Research. He writes in a personal capacity
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16 Responses to “Did Labour overspend?”
Norfolk29
It does not matter at all whether Labour overspent or not, failed to fix the roof when the sun was shining or not, ran the economy into the ground or not, it was put out by the Tory propaganda machine and fed regularly into the drip feed of the people who vote that Labour was responsible for the 2007/8 financial crash. What was Labour doing at the time? Well, they were led by two Scottish gentlemen, who would not sully their hands dealing with such low propaganda. They were dealing with the effects of the crisis and doing so successfully. Surely everyone could see that. Certainly most other western countries saw that, as they copied our methods. What Labour currently need as a Leader is someone who can match the Tory propaganda machine and we will be out of power until we find one. None of the candidates currently standing for the Labour leadership is anywhere near that good and we will be out of power until that person is identified and made leader. Can anyone imagine the leadership race in 1994 in which Gordon Brown could have been elected leader? Well, imagine on, as none of the leadership candidates is even as good as Gordon Brown.
Norfolk29
Labour should also have reformed the voting system, reformed the selection process for the Labour leadership and regulated the banking and financial systems. Instead they simply concentrated on rebuilding the economy and taking us from 8th in the world GDP stakes to contending with the Germans for 4th place, despite Germany having 150% of our population. A lot of wasted opportunity caused partly by vanity and the need to respond to the 911 bombing in New York.
RoyB
The Tory lie wasn’t challenged because focus groups told Ed Balls to look to the future, not the past. Which only goes to show both the stupidity of relying on focus groups to show political judgment and the political ineptitude of Balls, along with most of the Labour leadership. The current batch of contenders are showing exactly the same ineptitude – the focus groups are telling them that they need to apologise, presumably because the lie is now so deeply entrenched that it cannot be denied. An apology will be political suicide for Labour. The Tories will simply milk it to show that Labour both lied about its economic record and now admits to having caused the crash. Subleties about debts and deficits are beyond the grasp of public opinion.
Matty
Great comment, sometimes (and this was certainly one of them) a bit of strength and leadership is required
WhiteVanMan
Just because she’s got short hair, I inow we can’t have bald leaders of parties but what next