“Too far, too fast” – until recently you could scarcely switch on a TV without hearing Ed Balls repeating his four-word analysis of the coalition’s fiscal policy. It seems to be a line that Balls and Miliband are no longer sticking to. If I were to give them more credit for economic analysis than they deserve I’d speculate that this might be because they realised it is utter nonsense. More likely, their polling showed them that the public just weren’t buying it.
And the public would be right not to believe it, because, on a key measure, the difference between the cuts planned by Labour and those being implemented by the coalition amounts to just 0.13 percentage points.
Let me explain. In a thorough post over on his Telegraph blog, author Toby Young has the figures for the cuts being made to departmental expenditure limits (DEL – the actual spending on public services, excluding welfare and debt interest payments) over the course of the parliament:
Overall, DEL is set to fall from £375.170 billion in 10/11 to £331.900 in 15/16, a cut of £43.27 billion or 11.53%.
It’s worth noting that that 11.53% will not be evenly spread due to the government’s decision to protect particular departmental budgets (health, international development and energy) and particular spending areas within departments (schools, for example).
So how much would Labour have cut DEL by? Labour’s ‘plans’ were so skeletal that we can’t ask them for this information. However, the Institute for Fiscal Studies have analysed what information we know and concluded that the cuts that Labour would have made to DEL to make their figures add up would have amounted to 11.4% over the parliament.
Of course DEL is only one measure, and doesn’t include welfare spending which has been cut by a greater amount than the IFS analysis assumed. But looking at the figures does show just how nonsensical the debate over public spending cuts has been. And while cuts of 11.53% are clearly very large, the argument that the coalition is cutting spending more than necessary – too far, too fast – is proved utterly false by an analysis of the figures. The coalition is cutting more overall from than Labour says it would have, but not by much (you can see a breakdown of how the extra cuts are distributed over on Mark Pack’s blog).
So next time you hear a Labour spokesperson bemoaning one cut or another, ask yourself this: what exactly would their 11.4% have been?