Several people have asked if the data I have put forward on government borrowing would have been changed if privatisations (including 3G and 4G spectrum sales) and POFI were taken into account. I was curious, so I have checked.
Privatisation proceeds came from the House of Commons Library updated in the past two years by the OBR data for March 2015.
Spectrum sale data came from press reports for 2000 and Ofcom for 2013.
PFI data comes from a Treasury report of December 2014 with (low)estimates for 2014/15 and 2015/16.
All these sums net increased borrowing either by disguising the sum that would actually have been borrowed or actually adding to it in the case of PFI.
I then produced data for the 70 year period to 2016 and the 62 years to 2008. The results were as follows:
Just one indicator changes: in original prices and for the 62 year period only Labour borrowed more on average than the Conservatives, which was the reverse of the finding for the data excluding these additional sums. But once constant prices are used the Conservatives borrowed more on average in all cases.
What if we only looked from 1979? This is the same data restricted excepting that it is restricted solely to that period:
In other words, nothing changes.
The Conservatives are still the biggest borrowers in real terms, are less inclined to repay and repay much less debt.
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Of course they are the biggest borrowers, the Tories love to keep their mates in the City happy by borrowing from them at interest instead of taxing them and their companies in a progressive way!!
Just a pity New Labour were enticed to the dark side and went along with the same non-sensical approach to running the Treasury and left themselves open to criticism.
Now there is a capitalist if I ever saw one!
No surprise then that New Labour was just another neo-liberal party of “aspiration” when it’s leader clearly had such huge financial ambitions for himself (not the people of the country as a whole).
If you can’t beat them, join them springs to mind for some reason?
http://www.theguardian.com/money/2016/mar/14/tony-cherie-blair-property-empire-worth-estimated-27m-pounds
Just in time for the budget. Let’s hope our Shadow Chancellor and the Leader of the Opposition are studying this and the related blogs as deeply as many of your readers are Richard (I note the number of “shares” for the original blog is now in the many thousands).
I also hope that if they are, and are going to use it, they have a ready supply of rebuttals for what will be the inevitable attempt to trash this work.
Any can reproduce this: I have given all sources, methods and assumptions
But no doubt someone will say the House of Commons library got all the data wrong
Thanks for doing all the work Richard. Very interesting. I still might have to compare the numbers some more to see how the old ‘Patrician’ Conservatives and Old Labour compare with the Thatcherite Conservatives and New Labour.
No doubt Osborne will be dismissive if this is mentioned but if your thoughts are good enough for the select committee, I don’t see how you can be dismissed out of hand.
Genuinely puzzled. You are now saying that it is good to pay down the National Debt when, only last week, I thought you were making an argument that the size of the debt is immaterial and, in fact, that the current government should be borrowing more in order to finance infrastructure. Am i mistaken? Were you actually arguing that Osborne is right to try to pay down the debt?
The only argument I am making is that the claim that Conservatives borrow less and repay more is wrong
You are making up any other claim so I will ignore it
Nothing has changed on any of my other arguments
Richard
I don’t know if you already know this but……
‘Rocco Siffredi’ is the real name of a well known Italian pornographic film star.
Despite the fact that the opinions ‘Rocco’ espouses are as bad as most porn stars acting (see Robin Williams), I wouldn’t bother even letting him comment on your site as he (or ‘it’) obviously thinks it’s really funny.
It isn’t. Zzzzzzzzzzzzzzzzzzzzzzz
No, I wasn’t
I don’t mind saying that I really do not know a great deal about porn, let alone its stars
It seems to me that the economy is relatively slow moving in the sense that it normally takes a few years for the new government’s policies to affect the amount of debt that is incurred.
It would therefore be more accurate to measure the relative debt amounts incurred (say) 2 years after the party where in power – I believe this would be informative – are you able to do this for us? (or do you know the implications)?
I am dealing with perceptions
The data I have offered accurately deals with that
Richard – you implicitly appear to be saying that governments can instantly change policies and have an immediate impact on the economy. That seems extremely unlikely.
I simply don’t understand why you do not adjust for this or at least acknowledge the impact it has on your analysis.
This is perception issue
And you ignoring what I am seeking to do
What you suggest may make sense in some circumstances but emphatically not in this case
So I will not be adjusting
Grow up you little twerp even the real Ron jeremy had more brains than you!
If you can’t sensibly address the sensible issues being raised, then best to say nothing at all, rather than be abusive.
There is a spate of trolling here: you may be one and you may not be
I have assumed not, but I have been wrong many times today
Can you please explain why you think adjusting the data (to allow for the delay between policy implementation and the impact on the economy) is not appropriate in this case, if the analysis is genuinely trying to understand which government has borrowed more / less ?
How about because no one apart from a troll with no mates wants it?
And everyone else realises that I am writing about perceptions
You’re trying to use real evidence to determine whether people’s perceptions are valid or not – clearly using flawed data or at least data that hasn’t been adjusted to reflect known issues, is unlikely to lead to a valid conclusion.
Or is the intention to come to a prearranged conclusion and simply pick whichever data produces that conclusion…?
You are denying who was in power?
And that politicians might make claims based on that which people notice?
I suggest you stop showing your bias
I did not: I did an exercise out of curiosity and reported the findings as they were and then tested them and found them very robust
Only right wing trolls seem upset by the result
Please don’t reply: you will be deleted for using a false name
You mean the way that a right wing “think tank” would operate, in order to protect the vested interests of its financial sponsors.
It may surprise our infamous impersonator that some people still do have a moral conscience in this country, whereas no doubt all of his “no-mates” still believe that self-interest is the only real driver of human behaviour.
Take the Institute of Economic Affairs, the first “think-tank” with a very clear right wing, free market, private ownership, von Hayek “neo-liberal” agenda. (i.e. a return to the good old days of tooth and claw capitalism, inequality and hereditary social order)
And you wonder why we can’t trust them – just watch this!
https://www.youtube.com/watch?v=BaPEIZP5Org
There’s an interesting point behind all this about perceptions.
I suspect that the Government’s rhetoric on the issue of borrowing and deficits is entirely performative. Its purpose is to convince people that the Government is on their side and has a ‘common sense’ approach. Once this bond of trust has been established, people cease to pay attention to actual Government policies, assuming that they will do what is best.
This perspective helps to explain why Osborne has been able to miss all his targets without suffering politically. It also suggests that establishing some alternative form of trust in terms that people understand (e.g. many people take out a mortgage to improve their lot) is a first step to challenging the Government’s dominant narrative.
It amazes me how Richard gets pilloried for declaring honestly how he has compiled his own data.
I don’t see many of you who do this complaining about the latest Tory lies – if only the Tories were as honest about the tripe they produce for our consumption!
Richard
Thanks for this.
I think the average is misleading, it’s a simple figure to use. But, by power of Conservatives being in charge for longer, brings the amount down. If you showed the spend per parlimentary term since 1979 that would be 525/3 (175 per government term) for labour and 1054/4 (263.5) for conservative.
You could then compare the cost of the condem term and this singular conservative term.
Sorry to keep chipping away with editorial suggestions.
I really like what you’ve done here, and if you wanted some graphs let me know.
Damian
Happy to see what you come up with
You might want to express the amount of debt repaid by government term as well.
Just out of interest does the post war Lend-Lease, Marshall Plan and 1970’s IMF loan/SDR’s come into this data. As much of this was on Labour’s watch, but could hardly be called “their fault” it would be interesting to know whether it skews the data at all.
It seems to me that most of the big surges in UK debt have been historically caused by war and/or monetary/financial crises (and dealing with the inevitable disastrous social and economic consequences).
I don’t believe any one political party can be wholly blamed for either as there is usually a consensus in parliament to either go to war or defend our currency or financial system.
So perhaps the political mud slinging should about who’s fault it was be brought to an end, and the underlying causes of war and monetary/financial crises studied in more detail to try to avoid the inevitable happening too often in future!
If it is in – and I canot say – this is headline data – it does not bias against Labour anyway as far as I can see
This is an interesting historical read of the IMF crisis and shift from Keynesian to moneterist economics in the UK, probably from a centre rightish academic perspective but I wouldn’t question all the analysis as it is not overtly party political.
Begs the question how things would have developed if either Labour or Conservatives had understood the concept of sovereign money/QE/PQE etc.. instead of having to fall back on loans from foreign creditors?
http://www.gresham.ac.uk/lectures-and-events/the-imf-crisis-1976
I think you right to challenge perceptions; they often influence people more than the realities on the ground. You only have to look at public perceptions about life on benefits compared with the reality to see how much it allows or encourages the Government to present a narrative based on strivers v skivers.
The one I like to trot out when challenged over Labour’s appalling profligate spending record is that public spending under Blair as a % of GDP was lower than under Thatcher or Major. Not offering a full blown defence of Blair’s time in office, but it surprises many people
I’ve seen similar figures, though not as detailed before on a pro Labour site early in the coalition time in power. The one retort that i was aware of back then was that you can’t simply look at borrowing figures without taking into consideration the particular moment in the economic cycle that either party comes into power.
(this is what that other well know porn star Jeremy Ron was getting at I think, with his idea to compare with figures that exclude the first two years of a governments term of office]. For example it’s could be fairly argued that in the post 2010 environment the coalition came to power with a rather large deficit to finance and whether they had chosen to spend heavily [as some on the left wanted] in order to grwo the economy or institute cuts there would have been an extensive period of high borrowing through not fault of the coalition gov.
I think that over 70 years you can look at the data as a whole
It’s long enough for the proverbial to happen to anyone
No, hat would only be the case if the starting situation for each party was the same on average, which is unlikely to be the case – Indeed although there us 70 years data, because each term is 5 years, you only really have 14 data points.
Still, the significant shortcoming in the analysis has been raised – Richard clearly does not want to address it, so i’ll leave it there.
I don’t need to address it
There is no issue to address because i set the terms for this discussion and i have complied with them