In an election where lies will play an important part in the messages some parties will deliver some facts will help. Start with these.
Overall since 1946 and through to the end of the 2019/19 financial year Labour has been, overall, in office for 28 years and the Tories for 45.
In that time according to the House of Commons Library net total government borrowing has been £1,618 billion: £155 billion of borrowing predated that period, most paying for WW2.
Of that sum 67.5%, or £1.092 billion was borrowed by the Tories. 32.5% or £526 billion was borrowed by Labour.
The Tories have been in office for longer, of course. Restated per year the Tories have borrowed £24.3 billion a year on average in historic prices.
Labour has borrowed £18.8 billion a year on average.
Labour repaid debt in 7 years. The Tories in just 4.
In current prices Labour has borrowed approximately £28 billion a year and the Tories £33.6 billion.
The Tories are always the party that borrows most.
I am not saying there is anything wrong with that. But when the Tories seek to make borrowing a sign of economic mismanagement they need to worry: they are the borrowing party.
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Sorry, but your analysis here is basic to the point of ridiculous.
Are you seriously arguing that governments begin their terms with a net zero budget deficit? Of course not. So blaming the Tories for the 10% budget deficit they inherited from Brown and Labour is simply not sensible. It is terrible economics, below that of a GCSE student and it is misleading to the point of lying.
You would be better of saying how much each government has increased or decreased the budget deficit. At which point the numbers look pretty unfavourable to labour, who have never managed to leave government with a smaller deficit than they started with barring the ’46 post war government (and that was mostly due to the end of massive deficit spending to finance the war).
I have done. Weighted version of this analysis in the past (2016)
And a current prices version
And a weighted current prices version
The result was always the same
Unless you reverse who was in power so that Tories always deliver Labour policy and vice versa you don’t pretty much change the result
And since Labour borrows less Tories have grown borrowing more
You also make the absurd assumption that Labour crashed the world economy in 2098. It didn’t
Not sure why you are going on so much about weighted and current prices version of this analysis, when it misses the basic point.
You are trying to say that the Tories have borrowed more than Labour – but are totally ignoring the fact that no government starts with a clean sheet and a zero budget deficit/surplus.
You try and excuse this by saying the crash wasn’t Labour’s fault, but that Labour government was running large deficits prior to the crash (despite good GDP growth) and left the Uk with a massive structural deficit. You can’t ignore that Labour was at least partly to blame for the scale of the deficit inherited by the 2010 government.
Either way, your analysis is basic beyond measure. You can’t seriously blame one government for it’s predecessors failings.
This post is nothing more than a party political – lies in favor of the Labour party. And let’s face it – the current crop of labour politicians are hacks at best, whose only way to try and win votes is to buy them with huge helpings of other people’s money.
I do note a tone of hysteria in your blog though – which seems to be increasing in direct proportion to the the likelihood of the Tory party winning a majority.
I was making the point I have considered the issue you have raised and it is a non issue.
What else can you add?
Richard,
It seems you have not heard of the economic cycle or inflation. Perhaps you should read some economic books to educate yourself?
Trying to pretend that (to pick one obvious example) the massive Coalition borrowing in 2010 was due to their own making and nothing to do with the structural deficit inherited from the previous Labour administration is even more laughable than your normal efforts.
To pretend Labour created the GFC is what is stupid
Ergo, you are
Jerome (and Stewart below)
You totally miss the point of the post.
It is about lies. Richard approves of state expenditure as do I an others here, but the Tories lie and bitch about it but do it too:
(Tory Lie #1) The supposed economic ‘safe hands’ of the Tories (the truth is that the Tories are incompetent at management and we’ve known this since Thatcher’s wrong headed dance and then rejection of hard monetarism in the early 1980’s, John Major’s handling of the currency crisis and also how they thought they could balance the books in 2010 by cutting spending which actually only reduced their tax take and made the balancing objective impossible. Duh!).
(Tory Lie #2) That Government spending is some form of negative imposition on the economy (when in fact it is investment and is actually a good thing – especially if there is a good tax system in place – not the husk of a system that we have had since 2010. The Tories end up ‘borrowing’ (do they borrow BTW or just print the dosh or raise it as secure bonds?) more because they always destroy the means by which to recoup their outlay – the tax and regulatory systems that do it – and leave Government looking short – although as the currency issuer, the Government is effectively never going to run out of money which leads us nicely to):
(Tory Lie 3) That Labour always leaves the country in debt (Labour had to deal with the 2008 crash and started quantitative easing (QE) to bail out the banks – something that the Tories continued to do when they got into power. Labour is always having to deal with the growth in private credit in the wake of any Tory government as the former shifts spending from the state to the private sector through privatisation and tax cuts the former which always creates huge private loans to buy the services off the Government).
May I recommend ‘The Economy under Mrs Thatcher 1979-1990’ (1991, Penguin) by Christopher Johnson? It is an unbiased account of the apparent success of Thatcherism (and notes the parallel increase in private debt in the country always prevalent under the Tories which is always progenitor of any recession) but even those days look better when compared to the complete horlicks Cameron and Osbourne made of the economy since 2010 because of their insane stupidity.
Electioneering? Biased ? Here? I don’t think so. If you like supping lies Jerome and Stewart go back to the rags you are reading and get on with it and stay away from here. Please – do!
Thanks PSR
Pilgrim, re Lie 3, there’s also the unspoken truth that the loosening/dismantling of regulation from the “Big Bang” onwards was the enabling factor which made the 2007-8 GFC possible and, ultimately, inevitable. It’s to Labour’s great shame that they did little to address the regulation issue when they came to power in 1997, thereby facilitating the GFC. However the real culprits were the Tories. Safe pair of hands with the economy? Don’t make me laugh.
Hi Richard,
Nice update to your previous 2016 debunk of the old “Labour always borrows more and will bankrupt the country” myth, taht the Tories roll out during every election.
I noticed a small error: “Of that sum 67.5%, or £1.092 billion was borrowed by the Tories. 32.5% or £526 billion was borrowed by Labour”
Pretty sure that should be “Of that sum 67.5%, or £1,092 billion” not “£1.092 billion”.
Keep up the great work on debunking the myths.
Regards,
Kevin
Sorry
Surely it being perfectly reasonable to point out how much debt has been accumulated by each of the political parties and then averaged per year, rather than a snapshot at a particular time, which you have done. A similar argument is used regarding unemployment where the tories say that labour always leave power with higher unemployment than they started with. This is correct but, represented as a graph which shows the intervening years, the tories, I am afraid, are the party of higher unemployment when averaged per year.
Of course it isn’t just the amount borrowed that matters, it’s what it is borrowed to spend on that really matters.
Spending on police, for example is all overhead cost to society to deal with various forms of antisocial behaviour.
Social firefighting, you might say.
Spending on education is a real investment in the human resource of the nation and will ultimately pay dividends.
You pays your money and you takes your choice.
In practice you maybe need to do both, but you really need to know what real priorities are for the society you want to live in.
Can’t you see how flawed your analysis is when you allocate the 2010 structural deficit to the Torres (as well as ignore inflation etc)?
The work covers 73 years
And the Tories wanted less regulation pre 2008 that would have resulted in a bigger loss of revenue
And Labour borrowing pre 2007 was far from exceptional
I’m pointing out facts. You have the problem of making up ezxcuses using terms that have no meaning
Once again you try and deflect and bluster rather than actually acknowledge the issue.
Fact 1) borrowing pre-crisis and the creation of a structural deficit prior to the Financial crisis is nothing to do with financial crisis
Fact 2) desiring less regulation (on banking) is not the same as lower regulation. So the suggestion that losses due to the financial crises are without foundation
Fact 3) losses attributable to banking were relatively small compared to the extra debt taken on by the government in 2008/9, 2009/10, which was primarily a function of the Labour fiscal policy of the time. To pretend otherwise is either deliberately misleading or worse (?) shows a lack of understanding of the issues
You time here is over
Labour’s planned spending hardly changed in 2008/09 etc, but revenue crashed and automatic multipliers demanded support for the people the GFC threw out of work or onto low pay. These are facts
And that means you are not telling the truth, and I suspect deliberately so. I find that deeply unappealing
Richard
Which terms have no meaning? Do you not understand what. Structural deficit is?
Do you think that the ‘austerity measures’ which you’ve regularly criticised over the last 9 years Should have been much greater so as to reduce the amount that has to be borrowed?
That would be quite a turnaround if so,
I know the term structural deficit is entirely meaningless, if that’s what you’re asking
And that austerity was never required, and was deeply harmful, if that’s what you’re also asking
Fantastic work Richard. I thought the Brown government before the crash had a 3% GDP borrowing, 2% of which was for capital projects. If that is correct, quite low. And surely if the Conservatives had been in power when the crash happened they would have had to bail out the banks to the same level as Labour to guarantee cash would still flow from cash machines across the country.
And as for Tory borrowing, what about the huge amount of national assets sold on the cheap to aid tax cuts to the wealthy.
During the eighties there was nearly always a fanfare, including tv advertising, when a utility or other entity was being privatised. I remember the ‘don’t tell Sid’ campaign when British Gas was being sold to the general public although they already owned it.
Nowadays, there is a sop to the employees through a share allocation, but most are passed to institutional investors without any general offer for sale. Admittedly most individuals sold their holdings and some ended up under the dastardly control of those EU bureaucrats but now there is very little publicity regarding these initial public offerings. Royal Mail was an exception regarding awareness but was sold without any offer to the public and, I have read, that parts of the ambulance service have been sold off by the same method.
PS: what has happened to the Naylor report??
Ken Mathison
You are right to mention the slack regulation of the finance sector under New Labour but I would also like to point out that New Labour just did what nearly every national Government did around the world i.e. trust the bankers.
Little did many national Governments know or realise exactly how the banks were doing what they were doing in what turned out to be the biggest Ponzi scheme in the history of the world.
It is thus a world wide failure – not just a New Labour one.
My main point is that financial deregulation was an ideologically-driven Tory responsibility. Labour’s failure to act when they got in in 1997 is not, however, excusable in my view. There were several bank crises in the 1990s , notably in Canada and Scandinavia, and in those countries they put in tighter regulations to prevent recurrence, so when the 2008 crash came they suffered less severely than the countries with loose regulations. They did suffer collateral damage due to the global impact of the GFC, but their economies were in much better shape than ours. Labour weren’t alone in trusting the bankers, but if anyone had paid attention to how the Canadians and Scandinavians had reacted to their crises, less damage would have resulted.
You’re right that the failure to learn from 1990s failures in Sweden, Canada and the Far East was negligent, in the extreme