Saturday, 3 January 2015

The honesty deficit and Tory election posters


Andrew Fisher on dodgy deficit claims

So the new year has only just started and already the shops are trying to flog us easter bunnies and the Tories are trying to sell us their pre-election spin (see 'Exhibit A' below).


Tweeters and every major news outlet immediately picked up on the dubious claim of 'deficit halved'. Fraser Nelson, in the Tory-supporting Spectator, has been a regular puncturer of Tory cant, and rapidly rebutted Cameron's poster claims. (Others have more flippantly commented on a 'road to nowhere' and the fact it looks more like the driveway of a stately home than a UK road - where are the road markings?).

Loyal Tory MPs have responded by peddling the line that the deficit has been halved as a percentage of GDP, which is true. But it's not what they promised in 2010 - as this OBR table (June 2010 pre-Budget forecast) shows:


So by the end of this financial year (2014-15), the deficit should have been £71 billion, a little over half of the £155 billion Osborne inherited in 2010-11. As a percentage of GDP the deficit was predicted to fall from 10.5% in 2010-11 to just 3.9% - so to fall by nearly two-thirds (62%).

Claiming the deficit has halved today is shifting the goalposts, when they said it would be down two-thirds as a percentage of GDP, and more than halved in cash terms.

Far from eliminating the deficit, Osborne's austerity programme has succeeded only in driving down living standards and racking-up ever higher debt (both government and personal debt).

The Tory poster is inadvertently appropriate - a road to a recovery with no homes built, no end point in sight, no alternative routes, and people don't feature in it either.

1 comment:

Gordon Nardell said...

The deficit the Tories would rather not discuss: http://www.theguardian.com/money/2015/jan/03/new-consumer-debt-reaches-7-year-high. Spiralling private debt, owed disproportionately by those least able to repay, worryingly replicates conditions just before the crash. The post 2008 spike in exchequer deficit stems almost entirely from the bailout of the institutions who fuelled the bubble economy in the first place.