Oops. Bit of, err…, over exuberance over on Labour List who ran the story:
Deficit caused by economic crisis, says Channel 4…
The Tories have spent most of the past year trying to establish a media narrative that says Labour are to blame for the deficit. Once they had acheived that, it was just a small step to argue that “austerity” was needed to fix problems “caused by Labour”. So it’s pleasing that Miliband’s defence of Labour’s economic record has been so swiftly vindicated by the respected Channel 4 factcheck.
There was one slight problem, as the update to the post reveals:
Channel 4 have given us a “fiction” rating for this article.
If you’re going to quote a fact checker, you need to fully check your facts first 🙂
(A compliment is though due to LabourList for updating the post with Channel 4’s criticism, and linking to it. Not all of the journalist who look down on bloggers respond to criticisms like that of their own pieces by any means.)
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11 Comments
They do point out that Ed’s claim that the big issue was decreased tax revenues is actually correct. The Tories were promising to match Labour’s spending during this period.
Amusing, but like you say full marks to them for flagging up their failing.
An innocent moment of overexcited reporting I’m sure.
@ Anthony
“They do point out that Ed’s claim that the big issue was decreased tax revenues is actually correct.”
The even bigger problem (I loathe the word “issue” because it is a ridiculous euphemism. Why do people use it?) was that Labour opened the spending floodgates and was running a deficit of 3% of GDP even when the economy was at the top of the economic cycle. It also adopted Brown’s famous “light touch” approach to the financial sector, creating an unsustainable boom.
The upshot was that there was an existing structural deficit of around 5% of GDP. As a result, when revenues declined, a huge 11-12% gap opened up instead of a much more manageable 6%. It was made worse by our over-reliance on financial services. All of this is LABOUR’S fault. The figures are there in black and white. Anyone who claims differently is lying, pure and simple.
When will Labour start to grow up and take responsibility for what it did while in power for 13 years? I am getting pretty sick of this growing denialism about its miserable record for economic management, not to mention the soft-headed media brigade who seem to be adopting the same position because they can’t quite believe the fundamental point that if the money isn’t there, it can’t be spent.
@Robert C
“All of this is LABOUR’S fault. The figures are there in black and white. Anyone who claims differently is lying, pure and simple.”
I agree up to a point, and certainly some of their decisions have proven to be a disaster. However, both the current parties of Government need to also look at what they proposed at the time. This is where the Lib Dems have an edge over the Tories. Remembering that at future election people will have to ask themselves what would have been the difference in a Lib Dem rather than Tory led coalition.
Keeping attacking Labour whilst showing the Lib Dems to be better than the Tories is the approach that needs to be taken IMHO.
A decent, preferably independant, analysis of where the economy would be if the policies promoted by the then opposition parties over the course of the latter Blair / Brown years would probably still show substantial debt and deficit (but at more reasonable levels when linked to events). BUT and a big but, it would also (I believe) show that the Lib Dems were ahead of the game and would have been in a better position, not a brilliant position (again due to events) but a better one.
This would start a narrative that would show the big two in a worse light economically than the Lib Dems and be very hard to argue against by either party. The Tory line of it’s “all Labours fault and we are only in this position because of them” is not wholly accurate and will lead people to dismiss it as spin after a while. It worked during the election but it’s starting to lose credibility with the public and can be easily attacked by the press.
The approach where a rational argument shows that the Country would have been £X’s better off had Lib Dem policies been followed, leading to £X’s less requirement for cuts would survive the test of time and would still be a useable tool in 2015. “If you had trusted us in 2005 you would have been £X’s per year better off” works better with some people than just attacks on Labour….
To add, Channel 4 gave a fiction for Labour List’s report not Millibands claims of which they state….
“If you look at our analysis into the deficit, the FactCheck-ometer is pointing straight up – exactly between Fact and Fiction.”
The worrying thing is they talk a lot about Cameron and the tories and not much about the Lib Dems, again I think this backs up my idea to look for a new comparative approach.
This is funny. Channel4 News was taken apart by BBC’s ‘More or Less’ yesterday over the way they reported their figures.
Cathy Newman omits to take account of inflation, which wasn’t high, but sufficient for the small deficit each year, otherwise how did Gordon Brown manage to reduce the debt from 42% of GDP in ’97 down to 36% before the banking crisis? He seemed to make use all sources of income and manage it all quite finely. If he’s to be criticised, it is for not paying off more debt – but that’s quite different to saying his overspending caused the deficit.
And until the crisis in the banks, public spending was consistently below the magic 40% of GDP, the ambition of Margaret Thatcher, so public spending was hardly out of control.
What Cathy Newman’s piece does show, going back to where she set out, is that those claiming it’s all down to the mess caused by Labour, are lying basically.
The problem with that is it plants the idea in the public mind that the problem is over because Labour have gone, whereas the problem hasn’t gone at all. The risk of the banks falling over again remains the same. Nothing much has been done so far in this respect and it needs to be, because if they fall over again we really are trouble.
Re-structuring the banks should be a priority – but I’m not sure the coalition really are committed to doing this.
Add to —–> The risk of the banks falling over again remains the same. Arguably, the risk of bank failure is now higher, which probably explains their reluctance to lend at the moment.
The big elephant that neither the Tories nor the Lib Dems want to admit to being in the room is that one of the most serious errors that Labour made was reducing the base rate of income tax from 22p to 20p.
That was now quite obviously the wrong thing to do, and it will be even wronger if, as many people suggest, Osborne reduces the base rate to 18p in 2014 thanks to the savings he hopes to make and in order to entrench a smaller State.
@ Robert C
“It was made worse by our over-reliance on financial services. All of this is LABOUR’S fault. “
There is still an “over-reliance on financial services,” even now after all that has been said over the last few years. So what have the coalition done about it since taking office? Because if they haven’t done anything, you should be roundly condemning all three parties, otherwise you simply come across as a narrow-minded tribalist.
Basically, there were two options the coalition could have taken to tackle this problem:
1) Taken measures to curtail the financial services sector.
2) Taken measures to restrict growth in financial services, and simultaneously stimulated growth in several other sectors. ( though one sector may grow faster leaving you open to the charge of being over-reliant on one sector again)
I haven’t witnessed them doing anything in this respect. It seems very laissez-faire , with hope and fingers crossed; instead of a proper economic growth plan.
@Robert C when the Tories admit their figures were wrong when they were promising to spend pound for pound as Labour were and when the Lib Dems fully costed manifesto that wasn’t plausible is admitted to have been a load of nonsense, then we’ll see Labour admit they were wrong, but none of these things are going to happen, all parties omit the negatives.
Labour are not going to shout from the rooftops that they were at fault, parties don’t do that and it would be silly of any of them to do it.