If the Government Had Cut Spending as Much as The Guardian

Year Guardian (£m) Gov (£bn)
2009-10 415.3 694.9
2016-17 268.8 772.5
Difference -146.5 +77.6
% -35.3% +11.2%

If the government had cut spending by as much as The Guardian has since 2010, public spending in 2016-17 would have been £450 billion. In reality it was £772 billion, a difference of £322 billion. It has come to something when The Guardian has introduced more austerity measures than Tory chancellors. Saving £322 billion would allow the government to abolish income tax, VAT, Fuel Duty*…

*Calculations by Alex Wild, who is the soon to be departing research director of the Taxpayers’ Alliance.

Torbynistas’ £9 Billion Bill

More taxes, more spending, more borrowing, slower deficit reduction, wobbling on tuition fees and ending the public sector pay cap – some members of the Cabinet are becoming Torbynistas. Jeremy Hunt has demanded the “1% cap for NHS workers” is lifted, Justine Greening wants the same for teachers. Now Boris is briefing out he “strongly” believes the public sector pay cap should go. The IFS says copying Jezza’s cap-ditching policy would cost £9.2 billion per year, at a time when the national debt stands at nearly £1.9 trillion…

The 1% cap figure is also very misleading. Many NHS workers and teachers get a salary rise each year additional to national pay. As former minister Rob Wilson points out, this isn’t widely known and is worth several hundreds of pounds a year to several thousand pounds a year depending on salary band. The 1% figure everyone uses isn’t the whole story, for many the real number is more like 4%.

As the IFS says, in the last ten years public sector pay has accelerated faster than the private sector. Indeed earlier this year the IFS reported public sector workers are still being paid hundreds of pounds a year more than their private sector counterparts, despite “austerity“. None of the Torbynistas calling for an “end to austerity” are talking about how they are going to pay for it. For Boris this could be the most expensive Tory leadership campaign in history…

Placard Showing May’s Head Impaled on Spike at Corbyn Rally

The People’s Assembly Against Austerity march in London this afternoon was supposed to be the more presentable sequel to last month’s ‘Day of Rage’. Didn’t quite work out like that. Corbyn, McDonnell, Diane Abbott and Owen Jones addressed a crowd of communist flag waving cranks and demonstrators carrying placards calling the PM and her chief of staff “murderers“.

This charming lady carried a placard showing Theresa May’s head impaled on a bloodied spike. She claimed to be a Labour Party member from New Forest Gate. Corbyn described the protesters as “the movement that will win the next election”.

Channel 4 News’ Cathy Newman was spotted in discussion with Paul Mason. Jon “F**k the Tories” Snow sitting this one out?

 A standard Saturday afternoon out for Jez…

What Austerity? Public Spending Down Just 0.2% Since 2009

There’s a renewed focus on the politics of ‘austerity’ in the wake of the election, with some senior Tories using the result to proclaim “austerity is over” and endorse even more borrowing, taxes and spending. This fiscal truth bullet is much needed: research from the TaxPayers’ Alliance shows that public spending is just 0.2% lower than in 2009-10. When you look at the actual numbers for 2016-17, it is clear ‘austerity’ never really happened…

  • In 2016-17 public spending was a mere £1.3 billion lower than it was in 2009-10.
  • Day-to-day public spending was £14.3 billion higher than it was in 2009-10. This is an increase of 2.1 per cent.
  • Per household, public spending was £1,121 higher than it was in 2007-08: £28,529
  • Spending on welfare for pensioners was 12.1 per cent higher than it was in 2009-10.
  • In 2010-11 and 2015-16 there were real-terms budget increases for international development and health.

Some departments have faced more efficiencies than others, but overall the level of public spending has barely been touched since 2009. A reminder to the Gavin Barwells of the government not to take leave of their senses and embrace Labour’s fantasy economics – they will always be able to promise more free stuff…

Gove Fights Dangerous “Austerity is Over” Narrative

Encouraged by her new chief of staff Gavin Barwell, Theresa May is aggressively pursuing the dangerous narrative that “austerity is over”. Barwell told Newsnight that he lost his seat because public sector workers in his constituency wanted a pay rise. May has apparently accepted this analysis and told Tory wets she will pursue Labour-lite economics to win back Corbyn voters. Hers was already the most economically left-wing Red Tory manifesto since the seventies and it was rejected by the public. By contrast David Cameron won a majority while Labour screamed about spending cuts. The Tories had a 24 point lead before the manifesto was released – it was the dementia tax and the student offer not austerity that lost them their majority. Ending austerity is the wrong inference from May’s failure…

The national debt is nearly £1.9 trillion. It grows at a rate of £5,170 per second. The debt burden is 86% of GDP, more than double what it was pre-2008. Public sector borrowing is £51.7 billion this year – that is government overspending by £1 billion a week. May’s manifesto already kicked the deficit reduction can down the road to 2025, ten years later than George Osborne’s original so-called austerity programme. Young voters chose Corbyn, now May wants to win them back by saddling them and future generations with even more debt.

The only Cabinet minister who so far seems to recognise the recklessness of all this is Michael Gove, who told the Today programme “we need to get on with the job of reducing the deficit so that we do not saddle the next generation with a burden of debt”. The trouble with the government’s “austerity is over” spin is the deficit and debt can’t be spun away. If the gilt market loses confidence interest rates shoot up, as inflation takes off wage demands will spiral and the UK’s own version of Chavez will be installed. CPI has hit a 2.9% high this morning, above expectations. Not a good signal to loosen the fiscal stance and abandon austerity…

“Tory Cuts Killed 30,000” Report Author is Big Corbynista

Today’s Mirror splashes on the OTT claim that “Tory cuts killed 30,000“, casually accusing the government of mass murder. The story is based on a report co-authored by Oxford geography professor Danny Dorling. What the Mirror doesn’t mention is that Dorling a big Corbyn cheerleader with ties to Jez. In a blog post last May, Dorling fawned over Corbyn, showering the Labour leader with a litany of praise:

“Corbyn appears prepared to listen to everyone’s point of view, however much he disagrees with much of what they do or say…

“(Corbyn) appears prepared to listen to a wide range of experts and opinion rather than giving the air that he was born to rule, is all-knowing himself, and will tell us what is best for us…

“If voters look him up on Wikipedia they will learn that “Corbyn was revealed to have submitted the smallest amount in expenses of any British MP. In 2010 he claimed the lowest sum of all 650 MPs.” He also over pays his taxes…

“Famously Jeremy Corbyn had to be persuaded to stand in the leadership election. His election may have ushered in a new era in British politics where parties no longer look so keenly on the candidates who so obviously want the job and who initially appear most electable…

“Jeremy Corbyn does not appear motived (sic) by money…

“Corbyn has shown that he can be critical of his own party and its past record, even of himself, when, in retrospect, his party or he himself was clearly misguided…

“Jeremy Corbyn can take on the zealots and bigots who use migration to stir up fear and hatred…

“What Corbyn really represents is a set of beliefs whose time has finally come.

Corbyn himself has even rewarded Dorling’s obvious affection with a supportive tweets:

John McDonnell meanwhile has said he spent the last summer reading Dorling’s book. Sure Dorling is a wholly impartial observer – you might think the Mirror would have mentioned all this in their report…

UK Taxpayers’ £245 Million Loan to Corruption-Hit Brazilian Oil Firm

PETROBRAS

Scandal-hit Brazilian oil company Petrobras received £250 million from the UK taxpayer last year, extending its credit line to over £1.1 billion. While loans to companies buying British goods is fairly standard practice, the government decided to extend Petrobras’ line of credit after it became embroiled in a huge corruption and bribery scandal that led to the impeachment of President Dilma Rousseff. What’s worse, the state-owned company has had a plummeting credit rating in recent months, with Moody’s giving them a rating of B3 and the Wall Street Journal calling them “the World’s most indebted oil company”. What could go wrong?

H/T Greenpeace Energy Desk

Corbyn Will Block Osborne’s Dead Cat Budget

“We would oppose any post-Brexit austerity budget, just as we have opposed any austerity budget proposed by this government.” It ain’t gonna happen…

Owen Jones’ 14 Day Anti-Austerity U-Turn

Back in October, Owen Jones wrote this for the Guardian:

“Labour have to make ‘austerity’ tangible,” Owen wrote. It’s a theme he has written about week in, week out. This year alone he has claimed:

So keen is Owen on “the anti-austerity message” that he helped set up and remains a key backer of the “People’s Assembly Against Austerity” campaign group. So imagine Guido’s surprise at reading Owen’s latest piece for the Guardian:

Labour has to abandon anti-austerity – a term that has never really resonated with the public, despite the left’s best efforts – in favour of being pro something else… If Labour can answer these questions, it will be in a far better position: able to commit to higher wages, reduced spending on social security without throttling working families, rebalancing the economy, preparing the country for future shocks, and having a positive vision rather than simply being against Osborne’s failure… the real answer is not to gloat over his bungled mess, but to find a positive alternative that inspires the country. Over to you, Labour.”

Labour has to abandon anti-austerity? Reduce spending on welfare? Who are you and what have you done with the real Owen Jones?

Osborne Running Second Highest Deficit in OECD

ONS numbers out today show that public sector net borrowing was £9.4 billion in June,  so the government is overspending by a mere £2 billion-a-week. So much for austerity…

Treasury Questions – coming up this morning – will be a chance to ask the austerity Chancellor how he is doing on the deficit compared to other finance ministers:

Budget-deficits[1]

Of the OECD’s industrialised nations only Japan currently has a worse deficit, financially chastened Portugal, Italy, Greece and Spain are currently showing more fiscal discipline than the Chancellor. George’s illusion is permitted by the financial markets because of a combination of QE (money priniting) and the fact that Osborne talks a good book when it comes to austerity. Though the rhetoric can sometimes fail him when he’s questioned by the likes of Kay Burley

Building HS2 on £50 billion of borrowed money, renewing Trident on borrowed money, borrowing billions to subsidise EU competitors, borrowing billions that end up aiding third world dictator’s offshore bank accounts… It all mounts up…

How Welfare Spending Increased By £28 Billion Under the Coalition

Ahead of tomorrow’s Budget, Guido’s interactive chart shows just how well George Osborne did at cutting welfare spending during the last parliament:

The massively increased spending on pensions makes up most of the overall rise, though it is debatable whether old age ‘benefits’ should be included in the welfare budget.

That said, spending on sickness and disability benefits increased by some £7 billion.

The housing bill went up by almost £4 billion.

There was a small drop in the cost of unemployment benefits.

Overall, between 2010 and 2014, total spending on welfare increased by £28 billion.

Austerity? What austerity?

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