Cameron keeps on saying:
The government needs to find £1 from every £100 it spends.
This is total government income and spending next year:
For the record, income is £666 billion and spending £745 billion so there is a forecast deficit of £79 billion.
And Cameron says he needs to cut spending by 1% to close the gap. That's £7.45 billion. Now, let's assume he does that every year, and cumulatively, because he likes five year figures right now, that figure becomes £37 billion. Or a sum that is still well under half the deficit.
Now, I know George is making some heroic growth assumptions that will create extra tax revenues, but this is stretching credibility in a whole host of ways.
First, he he is not cutting by £1 in £100. That cannot work. He is cutting by very much more than that.
Second, if that was all that was required then we would not need cuts to social security of £12 billion.
Third, this pattern of conflating single and multiple years is plain straight forward deceitful.
Fourth, a little honesty really does help credibility and this claim is simply not honest.
Fifth, is the election to be riddled with claims as dubious as this? If so, you can see why I feel like this.
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We will be subjected to deliberate attempts to mislead from now to May 7th as you say. Labour is just as bad.
An example is Gordon Brown’s claim yesterday that the SNP’s deficit reduction plan shows they intend to spend no more than the Tories in 2015-16. He then says Scottish Labour will spend £800 million (relative to what?) in 2015-16 in Scotland.
The attempt to mislead here is that the SNP plan, at http://www.gov.scot/Resource/0047/00472778.pdf and the UK Government analysis it refers to, use 2015-16 as the base year. Hence 2015-16 shows no additional spending.
And of course we’ve yet to see a meaningful explanation of any of Labour’s plans for spending and cuts at the UK level.
I do not dispute that Labour is capable of this
If it makes silly claims I will look at them
I hope you do. But I do agree, Cameron spouts a lot of nonsense, but I suspect he’s not that good at numbers. Like any politician fighting a campaign, he just hopes that some of these headlines will stick in people’s minds, whatever the legitimacy of the calculation methods. And I would not afford him the luxury of making it a five year claim, as that would be disingenuous in the extreme. If the government reported – transparently – a proper P&L and balance sheet, we would be better informed on where we stand on the annual P&L deficit and the total balance sheet deficit. You should campaign for this sort of transparency as assiduously as you do for cbc and other measures so that politicians are prevented from lying and obfuscating so much.
I have demanded this for a long time
The Whole of Government Accounts I commented in recently are not good enough and IFRS is no basis for their preparation
Absolute tosh.
The Tories know that even though certain indicators are showing a regrowth of the economy surely we should know by now that it is due to things that it does not directly control.
What I think George and Dave will do is that they’ll do a 2010-2015 MK II if they get in again because they’ll say (like all good Thatcherite neo-libs) that they failed in term one because they were not Thatcherite enough.
Namely they will go on another public sector cutting spree to further ‘reform’ the economy and really go for the NHS this time around. They’ve already said they want to extend RTB to Housing Associations – and they will if they get the chance because the tax payer will no doubt foot the bill.
Historically,a 2% growth after a recession/depression is abysmally low.
Previous financial “excursions” have seen post-event growth around 4%+
And since the majority of new “jobs” are ones that guarantee no wages/no hours/no holiday on a regular basis, calling them jobs is an insult.
This is the 21st century, and we are back to doffing caps at “bosses” and queuing at the factory gates for a penny an hour and free tea.
We are now treated, in this mornings press, to major players in British “industry” (seat warmers and expenses fiddling tax avoiders) saying labour would be a disaster for British “industry”.
These are the same guys that other countries rate as business disasters.
The major industry in these sceptered (or septic) isles is financial crime, tax avoidance on a global scale and ennobling those who, in the majority of cases, should be the subject of a guillotine.
Agreed
An interesting take on the productivity problem. If true, Ed may have a problem if elected and tries to solve it:
” If the unemployed take the first job-like position that comes along, you would expect a jobs miracle with terrible productivity growth, flat to falling wages, and a long period of foregone GDP growth. Like the UK in the 2010s”
http://fistfulofeuros.net/afoe/a-little-model-of-the-labour-market/?utm_content=buffer6afd3&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer
Depressing
And probably true
Or:
“Which brings me to a hunch. This might be changing. Signs of a recovery in the euro area have been accompanied by a fall in the UK’s trade deficit, the biggest part of our current account deficit. This could mean that the foreign sector’s surplus is falling. If this happens as the same time as the domestic sector continues to run a deficit, then the government deficit will shrink.
Given that what passes for economic policy debate is often just an application of the post hoc ergo propter hoc fallacy, this might mean that the next government – whoever it is – will be able to claim success in reducing borrowing”
http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2015/03/the-other-deficit.html
post hoc ergo propter hoc = “after this, therefore, because of this.”
He has the macro right
Usefully simple pair of charts. Is there a time series version of this for the last 5-10 years?
Be interested to see the pattern of corporate tax receipts over time. Not least to counter arguments from the likes of CPS…
See http://us2.campaign-archive2.com/?u=b8d014b924447d13652c49d2a&id=9a594dd6c3&e=ed7955f115
http://personalpages.manchester.ac.uk/staff/rachel.griffith/PublishedPapers/DevereuxGriffithKlemmFiscalStudies04.PDF
Given the current immigration slanging match currently being fought in the press trenches, this is really interesting:
https://flipchartfairytales.wordpress.com/2015/04/03/the-decline-in-training-are-migrants-giving-employers-a-free-ride/
Starting from the known fact that employers dislike spending money training-up a workforce, when some of the ingrates then move to another employer!
Well worth reading, I say