Here is something of interest from the now departed Stephanie Flanders in 2010 in one of her more impartial moments when she wasn’t urging Osborne to borrow and spend more as ‘interest rates are at a record low’ and pressing the virtues of ‘Plan B’ upon him….why do we have so much debt?…one reason is that Labour increased government spending [but not income] by 26% in 6 years……and to add insult to injury the borrowed money ‘went out the door’…it was squandered by inefficiency….
Spending cuts: Molehill and mountain
Are we all making too much fuss about the Spending Review? Nick Clegg thinks so. He likes to point out that, even with all the cuts we will see unveiled tomorrow by the chancellor, total public spending in 2014-15 will only be back to where it was, as a share of the economy, in 2006-7. At the end of the Parliament, the government will be spending £41bn more, in cash terms, than it is today.
That doesn’t sound so bad. How, you might ask, can it possibly take the deepest and most prolonged spending cuts since World War II, simply to take government spending back to where it was four years ago?
The answer, as a certain meerkat would say, is “simples”. All you need is the largest, most sustained increase in public spending for over 50 years, the deepest recession in more than 70 years, and the first decline in Britain’s nominal GDP since records began.
Pressure on government spending since WWII has been relentlessly upward. As we get richer, we demand more of the kinds of things that government provides, and the cost of those things often rises faster than the economy.
It takes a very determined government – taking some very tough decisions – to fight that upward pressure for any length of time. You’ll note that the Thatcher era barely registers on the chart [of government spending].
Why did spending rise so fast? About half of it was due to the recession. But, as Tim Morgan points out in a paper for the Centre for Policy Studies, spending in 2006-7 was already 26% higher, in real terms, than it had been in 1999-2000. That was Labour’s promised investment in public services.
Maybe public services did not feel 26% better. But all that means is that it was spent inefficiently, and/or prices and wages in the public sector rose much faster than the economy overall (which they surely did). The money definitely went out the door.
Then the recession came, with a real decline in GDP of 6% between the spring of 2008 and the autumn of 2009. We have had recessions before, of course, but few that deep, and none, in modern times, that was accompanied by an annual decline in the cash value of GDP.
If the government follows through on this spending review, public spending in 2014-15 will be 4% lower, in real terms than it is today – but account for roughly the same share of the economy as it was spending in 2005-6.
It is about reversing a small-ish part of the relentless upward march in government spending since WWII. The fact that it should take such a gargantuan effort to achieve even this merely demonstrates quite how relentless that upward march can be, in a rich but now ageing modern economy.
The BBC doesn’t seem to do ‘history’ anymore…at least where Labour’s part in wrecking the economy lies. If any Tory politician raises the matter of Labour’s responsibility for the economy and the subsequent austerity measures to put it back on track they are quickly slapped down by the BBC presenter who tells them that they have been in power for 5 years and can’t blame Labour anymore as if the consequences of one of the deepest and longest recessions can suddenly vanish after a set date.
Even Labour friendly voices admit Labour’s role in the crash….last week on 5Live one (can’t remember who) frightened the presenter by saying Labour had helped cause the recession by failing to regulate the banks and financial institutions….how often, if ever, do you hear a BBC presenter referring to Brown’s ill-judged light touch regulatory regime in a similar tone?
Do not forget that Labour also achieved a first – to increase spending on welfare as a %age of GDP in the good times. Before that welfare spending as a %age of GDP was contra cyclical, falling in the good times and rising in the bad times.
The result of Labours vote buying efforts was that welfare reached 13% of GDP by 2010, way above “normality” adding greatly to the committed spending that there was no revenue to meet and thus the deficit.
They also built many shiny new hospitals and schools, but forgot to pay for them at the time. They also kept Network Rail’s debts off the state balance sheet.
Adding that lot in would have made the figures they left behind even sicker than they were
No, the BBC does not do history anymore.
The likes of Starkey and Ferguson, Roberts and Hastings are very much the end of the line-all flawed, but at least I can see AJP in them.
Sadly, we`ll be getting Dan Snow, Rageh Omaar and Fiona Bruce afterwards.
An utter tragedy in the brewing here.
To give an example-no mention on Last Word about the death in early February of Sir Martin Gilbert…a great chronicler of the Jews /Israel with his brilliant maps to teach us.
He wrote of giants like Churchill and Sharansky-not pigmies like Blunkett or Muamba.
Yet in the six weeks since his death-can find no mention of him on the BBCs obit show “last Word”.
As opposed to Peaches Geldof, Alan Whicker or any number of Beat Poet, black rights transexuals who went to Birkbeck or held Darcus Howes umbrella in Surrey Polys famous rent strike of 1971…who inevitably get a profile from a Hain, an Alun Michael or an Antipodean lesbian.
May your memory remain a blessing Sir Martin…if only you`d slipped on Petras piss live on camera eh?
PS Are Grant Shapps and Peter Powell one and the same?
Yes, Sir Martin’s work over many many volumes as official biographer of Churchill is a monumental achievement. I heard nothing about his death from the BBC – I picked it up on US websites !
Strange warped set of values at the BBC.
Why do Conservatives have to ruin the utopia we’re building with these pesky facts
🙁
/FORWARD
Ms Flanders , now working for a major bank, was on the Daily Politics today. She was pretty positive about the UK’s economic situation. How different from her Plan B diatribes of only 3 years ago. Is it that she just says whatever her employers, current and past, want her to say , or did she hold this view when she worked for the BBC? If so why didn’t she say them then?
I have noticed that several ex BBC presenters and correspondents undergo an immediate change of mind set when they leave the BBC. Mr R Liddle for one , and Paxo coming out as a one nation Tory. You would never of guessed that either of them was anything but typical BBC leftists, judging from what they said when they were at the corporation. These Damascene conversions happen so often to folks after they leave the BBC that you have to suspect that whilst working for the corporation everyone knows that you have to tow the liberal left party line if you want to get on. Nothing new there I suppose. Just another way in which PC views are rigidly enforced by the state funded broadcaster , which of course is supposed to be impartial and not a campaigning organisation.
It does make you wonder how Andrew Neil , let alone JC, has survived so long
It will be interesting to hear what J C has to say if he gets kicked out ?
I doubt if JC will actually be kicked out…far too bold of the Beeboids. However, I understand the contracts of JC, May and Hammond expire within the next couple of weeks. My money is on a “failure to re-negotiate terms acceptable to all parties” get-out for non-renewal. I then expect Chucky Umanna to become lead presenter of TG, ably supported by Robert Peston and John Prescott. With, perhaps, Fiona Bruce + Gok Wan doing a regular piece on driving accessories.
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