Frankie Maude’s Truth Bullets

Truth bullets from Francis Maude on Newsnight last night:

“The deficit is clearly not under control. We are in quite a sustained period of economic growth and yet we still have a budget deficit that is too big. We should be at this stage in a place where the budget deficit has been eliminated and we’re getting towards a surplus. We’re not. So the idea that there is suddenly lots of money around is complete fantasy… I’m not happy that we are giving the impression that we can suddenly spend money to alleviate a particular political pressure point.”

He is right, the Tories have pushed back closing the deficit until 2025, ten years later than they promised. They have added £500 billion to the national debt in 7 years, Hammond now plans to add a billion a week to the burden. Voters who experienced the public sector pay cap over the last 7 years after being told it was necessary to to close the deficit will now be wondering why the same Tories now say it’s okay to splash the cash and kick the can down round. The government’s claim to be pursuing a policy of “sound money” is risible…

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…

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…

Never-Ending Tory Deficit Reduction Horizon

Today’s Tory manifesto will pledge to eliminate the deficit by 2025, several years later than Philip Hammond vowed just a few months ago and 10 years later than the Tories promised back in 2010. When Hammond became Chancellor he said he would clear the deficit by the early 2020s, in his Budget in March he said the deficit would fall to 0.7% of GDP by 2021-22. Now the Tories say the books will not be balanced until 2025, the middle of the next decade…

George Osborne consistently failed to achieve his deficit forecasts in the last parliament – the deficit in 2015 was almost five times what he envisaged in 2010. The Tories used to say Labour would “load debts onto our children that they can never hope to repay”, May and Hammond now warn voters of Corbyn and McDonnell’s policies: “Where’s the money coming from?” The answer is the same place they get it, the deficit. It isn’t just Corbyn and McDonnell’s Labour who are an anti-austerity party…

Was McDonnell Handed Deficit Note?

Nick Robinson: “What is Britain’s deficit at the moment, Mr McDonnell?”

John McDonnell: “If I can say to you… [pause]… If I can say to you that what’s happened as well in terms of day to day expenditure, we need the investment… [ruffling]… we need the investment… [pause] [more ruffling]… we need the investment…”

Nick Robinson: “Is somebody passing you a piece of paper?”

John McDonnell: “Not at all.”

Nick Robinson: “Just sounded like there was a bit of paper being handed across.”

John McDonnell: “[Laughs nervously] Not at all.”

Nick Robinson: “What is our deficit at the moment, Mr McDonnell?”

John McDonnell: “The deficit at the moment is £68-£70 billion.”

Nick Robinson: “I think you’re being a bit too kind… It’s £52 billion.”

McDonnell eventually got the deficit wrong by £18 billion, so if he was handed a note or a mobile phone it didn’t do him much good…

UPDATE: Was that ruffling some quick googling? You get McDonnell’s out-of-date £69 billion figure if you google “deficit uk”

UPDATE II:

Dan Jarvis Confuses Debt and Deficit

It is often said that Dan Jarvis – not generally considered Westminster’s greatest thinker – doesn’t have the brain to be the next Labour leader. He has tried to dispel those fears today with a 5,000 word essay about his vision for Britain in the New Statesman. What could go wrong?

Action Dan’s big idea is a typically uninspiring “one-off wealth tax” which he says would help bring down the deficit”. Except, as Lucy Powell points out, he means “debt“:

Is this the best Labour moderates can do? Best hope for Jarvis is that no one can be bothered to read his dire snoozefest of a manifesto…

Smith’s £200 Billion “New Deal” Pledge Busted by McDonnell

Labour leadership hopeful Owen “Oily” Smith’s £200 billion “British New Deal” pledge, unveiled this weekend, has already been trumped by John McDonnell’s promise today of £500 billion for small businesses. The shadow chancellor announced his plan in pro-Brexit Sunderland to help secure the North-East for Labour. Goodbye prudence hello prolificacy…

owen smith credit card

Both men are deluded. In May alone the UK had a deficit of £9.7 billion – £74.9 billion for the 2015-16 financial year. Smith’s £200 billion pledge would almost double Labour’s record deficit under Gordon Brown in 2009-10 of £154 billion, taking the total to approximately 10.3% of current GDP, and adding another 12.5% to our current £1.6 trillion national debt. The choice for Labour members is between a spendthrift and a squanderer…

Squandermania: Osborne Misses Borrowing Target For This Year

OSBORNE MISSES TARGETS

New figures from the Office for National Statistics show that – shocker – Osborne has missed his borrowing targets again. The 2015/16 financial year left a budget deficit of £74 billion, that’s £1.8 billion more than the ONS’ £72.2 billion forecast. Net public sector debt is just shy of £1.6 trillion.

Osborne has missed every single deficit target he has set himself. He asked us to judge him on how well he tackled the deficit, well he missed his borrowing target for 2015/16, he missed his balanced budget target for 2015, he’ll miss his new adjusted target for 2016 and his overall balanced budget target for 2020.

The Treasury are focusing on the fact that March saw the lowest public borrowing in a decade. A mere £4.8 billion…

George Osborne’s Budget Irresponsibility

Parliament is voting on George Osborne’s Charter for Budget Responsibility today. The Chancellor’s claim to be running a responsible budget is risible given public sector debt has doubled during his time in office. It is now approaching £1.5 trillion, or 80% of GDP. 

Osborne consistently failed to achieve his deficit forecasts in the last parliament – the deficit this year will be almost five times what the Chancellor envisaged in 2010 (via Spectator):

The UK’s deficit in 2015 will be higher as a percentage of GDP – Osborne’s preferred metric – than Greece. The only advanced economy with a higher deficit than the UK this year is Spain. Osborne says today:

“[Labour] have confirmed they want to go on borrowing forever – loading debts onto our children that they can never hope to repay. This is not socialist compassion – it’s economic cruelty. As Labour’s Great Recession showed, those who suffer most when government run unsustainable deficits are not the richest but the poorest.”

Yet it is under Osborne’s squandermania that government debt has rocketed, or has he might put it “loading debts onto our children that they can never hope to repay”. As for the “economic cruelty” of “unsustainable deficits“, only three months ago the Chancellor delayed his planned budget surplus by a year, meaning an extra year or excess before he balances the books. It isn’t just John McDonnell’s Labour that is an anti-austerity party…

UK Deficit Still Bigger Than Greece’s

New figures published by the IMF yesterday report Britain’s government deficit this year will still be bigger than Greece’s. The UK’s deficit in 2015 will be 4.25% as a percentage of GDP – Osborne’s preferred metric – while Greece’s will be 4.17%. The only advanced economy with a higher deficit than the UK this year is Spain…

Before the election Osborne was skewered on how Britain’s deficit compares with Greece in his worst TV appearance of the campaign. For all the talk of austerity and swingeing cuts to tax credits, the Chancellor has failed to meet his deficit targets or match the rest of the developed world…

H/T @edconwaysky

Burnham Pledges More Spending, Forgets the Deficit

Andy Burnham this morning reveals his supposedly “credible vision for Labour”, a list of Corbynite crowd-pleasers like scrapping tuition fees and re-nationalising the railways (or not). Yet there was one word missing from his new pledge card: “Deficit.”

Surely his more detailed five point plan couldn’t possibly miss it out? He has spent the morning calling himself the “credible” candidate, you can’t really be credible by only making pledges to increase spending. Alas, the deficit is nowhere to be seen…

He’s just a scouse Ed Miliband

George Osborne Skewered By Kay Burley On Deficit Failure

Kay Burley had George Osborne on the spot today on the key policy failure of this government, in a way that other heavyweight interviewers like Evan Davies and Robert Peston failed to achieve. She asked: is the UK deficit higher than Greece’s deficit? Kay challenged him to give a yes or no answer, he kept trying to misdirect her and waffle. When he refused to answer she asserted that the answer was yes. Osborne stuttered and looked badly flummoxed. Then he claimed untruthfully that the Greek deficit is ballooning. It isn’t, the Greek deficit is lower than the UK’s deficit and the IMF forecasts they will be in surplus before the UK.

According to IMF data last year the Greek deficit (-2.4%) was lower than the UK deficit (-5.7%), it will be lower this year at -0.78% versus -4.78% and they are due to be in surplus next year – before the UK. Osborne has failed to meet his own deficit targets because he put off the hard decisions and switched to neo-Keynesianism whilst spinning austerity rhetoric. Lying about Greece doesn’t help his case…

Loony Labour Lefty in Deficit Deceit Leaflet

Dopey deficit dunce Ian Mearns, re-standing in Gateshead, claims that even “after four years of the most aggressive spending cuts in living memory,” the “deficit is still rising”:

This is factually incorrect. Now either the Labour MP is deliberately misleading voters or he’s stupidly confused the debt and the deficit.

You may choose one of the above…



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