Coffee House

Ed Balls: Labour’s public spending was not a problem before the crisis

26 January 2014

12:47 PM

26 January 2014

12:47 PM

Ed Balls and Ed Miliband have a funny old approach to convincing voters that they should be handed back the keys to the car. They pen pieces about how tough Labour is on welfare spending and make careful (and carefully-worded) references at every opportunity to their promise not to borrow more for day-to-day spending. The Shadow Chancellor prevaricates over HS2 to give the impression that he’s fiscally responsible. He did that again today when he appeared on the Andrew Marr Show, but he also said this:

‘But do I think the level of public spending going into the crisis was a problem for Britain? No, I don’t, nor our deficit, nor our national debt – what happened was a global financial crisis which pushed up the deficit. The question then was ‘who can get the deficit down?’ – George Osborne choked off the recovery, a recovery Labour had delivered but it wasn’t caused by public spending in Britain and that’s just the truth.’

Cue party poppers and celebratory chocolate cake for whoever’s on duty in CCHQ today. It’s an interesting approach, this: being so bullish on something when the polls suggest that the public still blames Labour for the current spending cuts.

It’s also worth reading Ed Miliband’s Sun on Sunday piece to see what his proposition for filling the gap is:

‘If we are to tackle the deficit, we also have to do more to control social security spending. That means making tough choices this Government has ducked, such as scrapping the winter fuel allowance for the richest five per cent of pensioners.

‘But to deal with welfare spending properly, we will need to make big reforms to cut the costs of failure in the system. We will build more homes to get the costs of housing benefit down. We will give employers an incentive to pay workers a living wage to get the cost of tax credits down.’

[Alt-Text]


Now, it’s difficult to disagree with the sentiment in the second paragraph: that the welfare system shoulders the cost of political failure on housebuilding and other matters. But the problem is that these prescriptions will take years to work out (our housing crisis is now, unfortunately too big), or won’t make a big enough dent in welfare spending (as is the case for the tax incentives for employers who pay a living wage). As David Wooding points out in his analysis on the same page, the cash he’ll raise from the reintroduction of the 50p rate and from these measures won’t be enough. And it is Labour’s reluctance to spell out in detail its proposals for cuts and tax rises that makes the Ed Balls line about Labour’s public spending so potent.

P.S. Of course, it would be even more potent and CCHQ would be letting off even more party poppers today had the Conservatives not vowed to match Labour spending plans when in Opposition…

P.S. from Fraser What’s interesting about Ed Balls’ denial is that even the IMF now admits that the problem came before the crash – the below graph shows that the UK economy, under Labour, suffered its worst-ever overheating. It’s IMF data, but the IMF missed this at the time (the graph in pink is what it said then: i.e., no overheating, everything perfect). The IMF has changed its view, in the light of new economic data. Balls has not.

BROWN BUBBLE


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Show comments
  • Tony Quintus

    Labour ran a deficit 9 out of 13 years in power, and only ran a surplus at all due to Tony Blair’s pledge to stick to the Major government spending plan in their first parliamentary term. By 2010 they had ramped the deficit up to almost £200 billion (inflation adjusted for today) that is more than the entire defense and health budget combined and Balls expects us to believe that the previous Labour administration’s level of public spending was not a mistake AND that an even more left wing Labour administration than the last will not only eliminate the deficit but run a surplus.
    What’s next for the two Eds, a manifesto pledge that England will win the World cup within the next parliament? It would be a miracle of equal magnitude to Labour learning to be fiscally responsible.

  • saffrin

    Ed Balls spent £3 million of taxpayer’s money modernising his office just weeks before being kicked out of office in 2010. Not only was that a sign of Eb Balls’ over spending habits, it was/is an insight to his poor judgement.

  • Damon

    Hilarious stuff. “George Osborne choked off the recovery, a recovery Labour had delivered but it wasn’t caused by public spending in Britain and that’s just the
    truth.”

    Yes, George choked off the recovery. That’s why Britain is growing faster than any developed economy apart (perhaps) from the wicked USA. Growth up, unemployment down, earnings catching up with inflation.

    The point is, that won’t stop the economically-illiterate electorate voting Balls/Miliband back into power in 2015, with all their “bash-the-rich” cr-p which will derail the fragile (Conservative-sponsored) recovery.

    Sad but true, folks. Sad but true.
    PS Emigrate.
    PPS Conservatives 4ever.

  • James Allen

    What a c”nt he is. And Miliband too. Shame there’s not much difference between them and Cameron/Osborne, let’s be honest. We need Thatcherites back in power….. hence UKIP!! Come on everybody…!!

  • HJ777

    Miliband: ” If we are to tackle the deficit, we also have to do more to control social security spending. That means making tough choices this Government has ducked, such as scrapping the winter fuel allowance for the richest five per cent of pensioners.'”

    There are approximately 10 million pensioners in the UK, so this would mean scrapping the winter fuel allowance for 500,000 of them. The average winter fuel payment is about £200 (the range is from £100 to £300) so this measure would save around £100m only.

    Labour left us with a deficit of over £150bn. This would make very little difference. Does Miliband take us for fools? This “tough choice” hardly merits the description – what would he cut that made a real difference?

    • James Allen

      Every little counts. Miliband is a fool, of course, but on this he’s (partially) right. I would say only the bottom, say, 10% should keep the winter fuel allowance. We need to cut back massively on OAP’s various freebies and pension rights if we’re to conquer the deficit and national debt. Tough choices, but the only honest course available.

      • HJ777

        Means-testing winter fuel allowances is not a cost-free option, of course. It would have substantial administrative deadweight cost.

        A much simpler option would be to abolish it altogether and to roll it into the state pension – i.e. the state pension would vary seasonally. As state pension income is counted as part of your taxable income, then richer pensioners would automatically be taxed on the benefit, thus clawing back some of the cost while reducing administration cost over the current system.

        • James Allen

          It can be determined by the income tax you pay…

  • BigAl

    How to kill the geese that lay the golden eggs by populist but dishonest policies. You get what you vote for.

  • launcher

    Whilst I have enjoyed and been informed by the cut and thrust in the BTL debate it is all pointless of course; Labour will buy the election victory. They will buy it with taxpayers money, appeals to envy and trusting that voters are stupid (they won’t be disappointed). “Democracy” has failed us all, even those bought and paid for.

  • BigAl

    If you vote Labour your taxes will increase. Even if you taxed high earners 100% we would still be in deficit.

    So someone else has to pay or you can cut spending. Labour does not know how to do this so if you vote Labour your taxes will increase.

    You get what you vote for.

  • ohforheavensake

    Unfortunately, Balls is actually right. Public spending as a proportion of GDP was 39.2% in 2007- which is exactly what it was in the last year of the Major government.

    And Fraser’s graph, as so often when Fraser tries to write about economic matters, is very misleading. The UK economy overheated in the early to mid 2000s (as people like Will Hutton and William Keegan- both writing for the Observer- were among the few to note); but Fraser’s graph doesn’t tell us anything about the government’s role in this. Given that government spending wasn’t historically high, the reasons behind the bubble must be found elsewhere- as indeed they are, in the housing market, the decline in real wages and the concomitant growth in credit, and so on.

    So I think the lesson is, check your facts before you write.

  • El_Sid

    From the Grauniad’s coverage of Argentina :
    To 68-year-old Aida Ender, after 40 days without power in her eighth-floor apartment in the middle-class neighbourhood of Almagro in Buenos Aires, the slogan grates like a bad joke.

    “There’s no plan, the president is out of touch with reality, she’s lost like Alice in Wonderland,” says Ender, who has had to move out of her apartment, where she has had no water, no working lift and no refrigeration since 16 December. Her plight is shared by thousands of neighbours and even hospitals, in the middle of unusual summer highs of close to 40C.

    Economic observers blame the government’s populist policies – including keeping
    utility prices artificially low to disguise inflation – for the power crisis. They say this has made it impossible for firms to invest in maintaining power lines.

    So populist policies imposing price controls on energy prices end up leaving pensioners without water or refrigeration in a heatwave?

    Who would hate pensioners that much?

  • andagain

    But do I think the level of public spending going into the crisis was a problem for Britain? No, I don’t

    Isn’t that like saying the Titanic had more than enough lifeboats before it hit the iceberg? After all, they didn’t need any lifeboats before they got into trouble.

  • David B

    Balls, as always, misses the point. They were borrowing at the hight of the economic cycle so when the fall came there was nothing spare and all they could do is borrow more.

    If that simple lesson has not been learnt then he would repeat the mistake if he ever became chancellor

    Or will he fall back on “no more boom and bust” and pretend he can defy the economic cycle, with everything that goes right for him being his good management and everything that goes wrong being the fault of the next evil economic empire.

    • Mynydd

      What you are saying is that borrowing should take place only at the bottom of the cycle. Mr Osborne has failed to understand this therefore should never have become chancellor.

      • David B

        Are u suggesting Osburne should have stopped all borrowing in 2010 or 2014? I think you know he had to manage the budget deficit so that it falls overtime. The real question is why did he have to start with such a high budget (ie day to day expenditure) deficit. The person who should never have been chancellor was Brown. He was the one who steered for the rocks full steam ahead. Osbourne is getting us of the rocks. We can argue about speed, but he is stearing in the right directon.

      • David B

        You haven’t figured it out yet – Keynes proposed that borrowing should be balanced over the economic cycle. This means as the economy grows borrow is reduced and turned into a surplus during a boom.

        Under our economic cycle borrowing should have ceased and turned into surplus around 03/04, enabling borrowing in 08/09 without creating economic drag when it comes to servicing interest and repayment.

        Brown and Balls continued to borrow for political purposes (the 2005 election). This meant that when the recession hit the economy was ill prepared

  • DavidL

    It can’t be repeated too often. When he became Chancellor, Gordon Brown set out his “Golden Rule” – that he would balance the budget over the economic cycle – running a deficit in lean years, but making up the deficit in good ones. This was pretty standard Keyesian economics. From 2000 onwards, Brown, with Both Balls and Miliband on his team of personal advisers, trashed his own Golden Rule, and ignored Keynes in the process – running deficits to fund current spending, even during a prolonged period of economic growth. The fact that Balls continues to assert that Labour did nothing wrong, tells me that it’s not worth even CONSIDERING voting for them in 2015.

  • BarkingAtTreehuggers

    There’s some interesting up/down voting going on here today.
    How will this comment score?

    Balls is balls. Gidiot is our hero.

    • RavenRandom

      Good point. I know this site. I can see from the comments the way this discussion is going. But the down votes keep multiplying on anti-Balls comments (not the usual trend for this publication). Someone is employing a bunch of non-commenting sock puppets. I wonder who?

  • @PhilKean1

    .
    INTERVIEWER : “Can you tell me why you have decided to raise the top rate of tax to 50p, and not, say, 90p, bearing in mind the reason you give us for wanting the increase is to help to pay off the deficit?

    LABOUR : “That’s very simple to answer. It is because there is an
    optimum level at which to set the top tax rate ; a ceiling – if you
    like – that brings in more receipts for the Exchequer without fear
    that the increase will prove counter-productive”
    .

    INTERVIEWER : “Then can you give me an example of how, in your opinion,
    increasing the top tax rate above that optimum level becomes, as you
    say, counter-productive?”

    LABOUR : “Certainly. If the rate is increased above a certain point, as
    it was in the 1970s, it is regarded as unfair and penalising by those
    who would be subject to the tax – and so would discourage them from
    investing in the Britain and persuade many to leave the UK
    altogether”
    .

    INTERVIWER : “Thank you. Are you telling me, then, that after 30 years of
    Labour and Conservative Governments concluding that 40p was – in
    your words – the optimum rate, that just one month before you were
    convinced you were about to lose the 2010 election, you decided it
    would be wise and prudent to raise that top tax rate to 50p, even as
    Britain was suffering her worst ever slump?

    In reality, wasn’t your decision to raise the top tax rate to 50p in 2010, and your proposal to return it to 50p if you win the 2015 election – a shameful and destructive act of politically-motivated, economic vandalism?

    LABOUR : “We believe that it should be increased to 50p now because it
    would be correct for those people on the highest incomes to bear
    their fair share of the burden for reducing the deficit”
    .

    INTERVIEWER : “But why, after UK Governments kept the rate at 40p for 30
    years, 13 of those under NuLabour ; a rate which – unless we assume
    that you were negligent and irresponsible for maintaining it at 10p
    below where Labour now says it should be – do you conclude that the
    new “optimum level” should be 50p?”

    LABOUR : “Err, but, well, erm……….
    .

  • Alexsandr

    Isobel says ‘ the cost of political failure on housebuilding’
    the political failure was not housebuilding, it was the uncontrolled immigration that caused the rise in demand in the first place.

    • Alexsandr

      would the down voters care to say what part of this is incorrect?

    • Mynydd

      It seems that Mr Cameron as made a new year change. Last year it was all Mr Brown’s fault, this year it’s all immigrations fault.

      • Cyclops

        Housing shortage. Labour’s solution? Import two million people and label any opposition as racists.

        Mind you, Gordon ‘British jobs for British voters’ Brown clearly had a bit of a national socialist streak!

  • anyfool

    So presumably Balls will be aware of the data that Fraser shows, lying again, no change there obviously, also when questioned no one pulls him up on this, not even the Tories.

    • RavenRandom

      I wonder how many personas Telemachus has on here? I noted a sudden rash of down votes for all comments against Balls, without any pro comments been made. Not impossible but unlikely.

      • anyfool

        Someone once said that Tele was really Balls, both are oblivious to reality.
        It looks like someone has taken these comments very personally.

  • Colonel Mustard

    Ah, Labour. That blast from the National Socialist past:-

    “All this was inspired by the principle–which is quite true within itself–that in the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods. It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously. Even though the facts which prove this to be so may be brought clearly to their minds, they will still doubt and waver and will continue to think that there may be some other explanation. For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying.”

    “His primary rules were: never allow the public to cool off; never admit a fault or wrong; never concede that there may be some good in your enemy; never leave room for alternatives; never accept blame; concentrate on one enemy at a time and blame him for everything that goes wrong; people will believe a big lie sooner than a little one; and if you repeat it frequently enough people will sooner or later believe it.”

    • RavenRandom

      The last paragraph does seem to be the Ed Balls play book. Remember the interviews where he denied undermining Tony Blair, and where he denied pushing Brown to give him Darling’s job. I’m sure there are many others.

      • Colonel Mustard

        Note the way my comment has been hit repeatedly with down votes to stop it rising up the page. Look at other posts here and ask yourself why.

        • RavenRandom

          Yep I think we have seen the hand or toe of a sock puppet at work today.

        • David Booth.

          Well you get my vote sir.

    • Mynydd

      The big lie you write about, is that the one your Mr Cameron is guilty of when he said in a Political Party Broadcast that he was paying down debt when he knew it was increasing, and continues to do so each day, he was and is in power.

      • Colonel Mustard

        No, the big lie I am writing about is basically Labour’s policy towards everything.

        And he is not ‘my’ Mr Cameron no matter how many times you repeat it.

        • Mynydd

          So I take it you accept Mr Cameron lied on behalf of your conservative party in the PPB.

          • Cyclops

            You want some lies?:

            “I will not allow house prices to get out of control and put at risk the sustainability of the recovery.”

            Gordon Brown’s 1997 Budget Statement

            “Under this Government, Britain will not return to the boom and bust of the past.”

            Pre-Budget Report, 9th November 1999

            “Britain does not want a return to boom and bust.”

            Budget Statement, 21 March 2000

            “So our approach is to reject the old vicious circle of the…the old boom and bust.”

            Pre-Budget Report, 8 November 2000

            “Mr Deputy Speaker we will not return to boom and bust.”

            Budget Statement, 7 March 2001

            “As I have said before Mr Deputy Speaker: No return to boom and bust.”

            Budget Statement, 22 March 2006

            “And we will never return to the old boom and bust.”

            Budget Statement, 21 March 2007

          • Colonel Mustard

            I am not a member of any political party.

      • RavenRandom

        And the debt will continue to increase as long as we run a deficit. You are aware of the difference?

        • Mynydd

          I am aware of the difference. Because Mr Cameron/Osborne are still running a higher deficit than they planned and promised in 2010 the debt is greater than they planned and promised. So why did Mr Cameron say in his scripted PPB that he was paying down the debt

          • RavenRandom

            Ignorance is not a virtue though you tout it as though it is. Debt is bad, maybe Cameron like you confused debt and deficit. Unlike you I promote economic prudence not political bullpoop.

      • Cyclops

        “I will not allow house prices to get out of control and put at risk the sustainability of the recovery.”

        Gordon Brown’s 1997 Budget Statement

        “Under this Government, Britain will not return to the boom and bust of the past.”

        Pre-Budget Report, 9th November 1999

        “Britain does not want a return to boom and bust.”

        Budget Statement, 21 March 2000

        “So our approach is to reject the old vicious circle of the…the old boom and bust.”

        Pre-Budget Report, 8 November 2000

        “Mr Deputy Speaker we will not return to boom and bust.”

        Budget Statement, 7 March 2001

        “As I have said before Mr Deputy Speaker: No return to boom and bust.”

        Budget Statement, 22 March 2006

        “And we will never return to the old boom and bust.”

        Budget Statement, 21 March 2007

      • HJ777

        During the 2010 election campaign, when talking to the “bigoted woman (remember her?) who asked a question about increasing debt, Brown made the claim that “our deficit reduction plan will cut the debt in half in four years” , whereas the Treasury figures showed that even had Labour succeeded in achieving its deficit reduction target, then debt would have more than doubled in four years.

        Look for it on YouTube if you don’t believe me.

        Cameron was wrong to say that his government is “paying down” debt, but at least he didn’t make the ridiculous claim that he would cut it in half in four years.

  • RavenRandom

    Miliband and Balls are returning to the divisive class based policies and politics of the 1970s. Bribe the public with their own money. Doublespeak a word like “fairness” so that it means someone pays 50% tax and someone else (a Labour voter) pays none. Cripple British industry with naïve interventionism. Revise the past and lie relentlessly.
    The IMF must have already booked their flights and hotels. It’s back to the 70s.

    • Andy

      ‘Returning’ ? They never left it. They are like a pair of Bourbons: ‘Have forgotten nothing and learnt nothing’. Pair of idiots. But, alas the public will probably fall for it.

    • Holly

      Remind us again.
      Just how well Labour did in ’79, at the ‘peak’ of yet another of Labour’s ‘golden legacy’, inherited by the Tories.

  • HookesLaw

    Scrapping the winter fuel allowance for 5% of pensioners will not do much to cut welfare spending. Miliband seeks to charm the middle class on the one hand but kick them whilst they are not looking on the other.

    One issue not covered by Balls was that not only was public spending out of control but there were spending commitments that were not budgeted for. Defence is a case in point.

    • LB

      Spending isn’t the issue.

      The issue is debt, including all the debts that Ed won’t admit to. Namely your pension.

      True debt, all the debts that should be on the books if you follow the accounting rules comes to 9,000 bn.

      A few million in spending or axing spare bedroom subsidies is Ed’s big idea, and its frankly pathetic in comparison.

      • HookesLaw

        Future pensions are not debt.

        • Alexsandr

          no, they are liabilities that should be on a balance sheet. as should PFI

      • HookesLaw

        No – future pensions are not debts.

        • LB

          They are under all the accounting rules.

          Reporting won’t change it. You won’t be paid a state pension.

          • HookesLaw

            Yes I will. You are barmy. The money has not been borrowed it has not been spent so it is not debt.

            • LB

              You don’t have to borrow to have debts.

              For example, if you go to DFS, and get a sofa on a buy now, pay later that’s a debt.

              Just as the state pension’s a debt too.

              Banks accepting deposits to pay latter, create a debt for the bank.

              No borrowing;

              • HookesLaw

                Your so called example is ludicrous. For a start you have ‘bought’ the sofa and signed an agreement to pay for it. Its a conventional debt.

                • LB

                  People have bought a state pension and paid for it up front.

    • Mynydd

      With respect to defence, Mr Cameron changed the specification for the type of aircraft for the new carriers, when he was told the modifications necessary for his new type of aircraft was not possible he changed the specification back again to the original type. This cost the taxpayers hundreds of millions which was not budgeted for and solely down to Mr Cameron not Mr Balls.

      • wycombewanderer

        Brown ordered two aircraft carriers knowing full well that there was neither the budget nor the immediate need for them.

        Then he awarded the contract overseas!

        • ButcombeMan

          I hesitate to be fair to Brown, he was economically illiterate and the worst ever Chancellor, unsuitable for public office

          The carriers are being built in UK. You are confused about a support ship

          • Alexsandr

            Depends if Scotland becomes independent. Then they would be built in a foreign country. Maybe the new independent Scottish government should pay for them.

          • Mynydd

            I am sorry I replied before reading your reply

            • ButcombeMan

              No need to apolgise for that. Since Tele has failed to deal with my Exam question on Winter Fuel Allowance, why do you not have a go?

          • wycombewanderer

            I’m happy to concede to both Mynydd and yourself that I was wrong on that.

        • Mynydd

          The aircraft carriers are being built in British yards, you must be mixing them up with the ships Mr Cameron has ordered from yards in South Korea.

      • Cyclops

        I agree. Ed Balls is a fecking eejit!

      • HookesLaw

        Total ignorance
        On coming to power the tories realised what a mess labour had made of specifying the carriers without a catapult.
        They rightly investigated the possibility of installing one. But the ships were ordered without nuclear power and could not use steam catapults. The electro magnetic alternatives were untried and too expensive. The study found it would cost billions. It did not cost ‘hundreds’ of millions to do this research.
        The big mistake the govt made was not cancelling the carriers at the outset and ignoring the stupic contracts signed by Labour.

  • LB

    http://www.ons.gov.uk/ons/dcp171766_263808.pdf

    2005 to 2010. Ed Balls with Gordon in charge.

    £1.347 trillion hidden off the books at the start, and in 2010 that rose to 5,01 trillion

    That rise of 734 billion a year exceeds current taxation. It even exceeds current annual spending.

    Hey ho, if you want a pension, you won’t get one from the state.

    Like heck its the banks. The banks have generate 35 bn in interest profits for the state, plus the banks pay 10% of the taxes. The state’s well up on that deal.

    It’s fraud.

    • HookesLaw

      There is not a rise per year.
      The ‘off books’ is both capital and associated current expenditure for schools hospital buildings. The repayments come out of current spending.
      PFI payments cover repaying the construction cost but also the maintenence repair upgrading and normal servicing costs associated with any functioning building.
      Future pensions are not borrowing. Pension payments come out of moneys paid in. Your link did in fact point out that under this govt the amount paid out is decreasing because it has changed to CPI inflation.
      Your link also points out that some of the changes in the figures are due to changes in the standards used for discount tables.

      Its not fraud – you are absurd and hysteric.

      • Alexsandr

        but PFI is really borrowing to buy an asset. The PFI payements are as inescapable as debt interest. The fact they have used a clever accounting wheeze doesnt mean it isnt really debt.

        and add to the PFI the debt at Network Rail, and train leases underwritten by the treasury. Really public sector debt moved off balance sheet to massage the numbers.

    • BarkingAtTreehuggers

      Would you be so kind to briefly confirm/deny that any other nations were doing the same thing with regards to the financing of their public sector pensions? I am trying to get a feeling for how indebted other nations in Europe/ Asia/ America are – do they have state pension pots coming out of taxation or do they run quantifiable schemes. Thanks in advance.

      • LB

        Crossing their fingers.

        Why does it matter what others do?

        France for example pays 70% of salary, from a younger age. Way more up the swannee.

        Singapore runs a funded scheme. Australia likewise. Notice they don’t have pension problems.

        Hungary took the lot. Stole everyone’s money. Poland took 50%. Ireland forced everyone to invest in AIB. Buglaria looted their funds. The first to try this was Argentina. Usual problem, government couldn’t stop spending.

        The reason why they won’t report the debt is because it makes it blatently obvious they can’t pay.

        • BarkingAtTreehuggers

          “Why does it matter what others do?”
          To get an understanding of the nature and severity of the problem. What you have (perhaps inadvertantly) done is rank Britain with the likes of Argentina, Hungary and Bulgaria whilst avoiding a comparison to Scandinavia or Northern Europe in general. This sort of clarification was what I was after. Thank you for making that point.

          • LB

            There are shades of the condemned man who is to be hung in the morning being comforted because the guy in the next door cell is down for being hung drawn and quartered. Or the daughter who says, Daddy I’m a little bit pregnant. Being bankrupt is boolean, and the extent doesn’t matter.

            So what are governments doing and going to do.

            1. Raise retirement ages. The pensioner to be loses out in two ways. First 1 year less money, second 1 year more paying in. Double whammy. Also to make a proper comparison, you need to see what they could have got for their money if the PAYG systems weren’t taking the cash. It’s way more. The actual losses are higher that the sum of the two numbers.

            The poor who tend to die younger have the most to lose.

            2. Steal assets from private and company pensions. Very common, so search for Agentina and Hungary pension theft to get an idea. Lots of places in the EU have done this. Even Brown’s tax raid did this.

            3. Means testing. That will kick in. Those who paid in the most, will get nothing. Not a good message if the middle class opt out politically for the theft of something they have paid well over the odds.

            4. Change the linkage. eg. RPI changes to CPI. CPU changes to a fixed increase, and then use inflation to default.

            5. Raid something else. The IMF suggestion is a 10% raid on all bank accounts.

            6. Australia Singapore have moved to funded schemes. That give lots of money for investment and their economies have grown. It’s the indebted countries that have problems.

            Now reporting the debt doesn’t change the debt. However the problem is that if people knew, they would be more than angry. Hence the political idea is to keep them in the dark until its too late.

            Note, that if a median wage earner, 26K a year now, had invested their NI, their fund at retirement now would be 835K. The state pension costs 146K and is falling.

            7,100 bn owed by the state, increasing at 734 bn a year. To give you an ideal of scale, total taxes now are 600 bn.

            Never will be honoured or paid, because its too big,

  • David Kay

    Isabel i think youre gorgeous, think yourself lucky im not a LibDem politician. But back to the matter in hand, Balls, what an idiot ole blinky is

    • telemachus

      I agree with your opening but you close denies the brilliance of his analysis as Ihave trumpeted week on week
      *

      • Joff

        Why were they running deficits of £70bn before the crisis then?

        • telemachus

          George Osborne choked off the recovery, a recovery Labour had delivered
          *
          This is the key phrase of focus
          Osborne has some measure of recovery riding on the tails of world recovery
          This is 3 years behind where we would be without the Osborne/Laws/Alexander choke on capital investment

          • Joff

            As I mentioned the other day, simply repeating something over and over again doesn’t make it true. When you spend, spend and spend some more there has to come a time when it has to stop – there is no magic money tree as some would have you believe.

            • telemachus

              China is the magic money tree

              • HookesLaw

                What an idiot comment

                • Mynydd

                  Mr Osborne and then Mr Cameron went to the magic money tree, China, to beg for the money to build our nuclear power stations. The second magic money tree is my life long saving

                • HookesLaw

                  That’s not a money tree we are paying for the electricity generated. And we are paying to build it.
                  Because labour did nothing about nuclear for 13 years we are paying more than we should

                • Nicholas chuzzlewit

                  Does he make any other kind?

              • Joff

                So you actually admit that you think you can just keep borrowing money with no afterthought about paying it back?

                • Mynydd

                  Mr Cameron/Osborne said they would stop borrowing money by 2015 now they say it will be 2018 before they stop borrowing. So it seems Mr Cameron/Osborne just keep borrowing money with no afterthought about paying it back

                • Nicholas chuzzlewit

                  Whereas Balls said 2020, a date we all know the dissembling little imbecile plucked from the air. It is obvious that his only narrative is to return to borrow and spend the very formula that got us. Into trouble in the first place.

                • Alexsandr

                  no. he said he would stop borrowing for current account spending. but unsaid is the amount he will spend on ‘Investment’ No definition of investment -brown called education spending investment so it could mean anything.

                • Nicholas chuzzlewit

                  Agreed. A loophole he will use to drive up borrowing on projects he deems to be electorally useful.

                • Cyclops

                  Because Labour fcuked us and we are paying forty billion pounds a year in interest on the Labour Debt. Fortunately we are recovering far better than most of our rivals. Have a look at socialist France…….

              • Alexsandr

                no more. didnt you see the article this week in the speccy about a banking crisis there?

              • David Booth.

                Do you honestly think that the Chinese Government are happy to continue giving the UK money to maintain our current lifestyle when millions of their own people languish in poverty. Money lent by China will have to be repaid to China.

                • Holly

                  Oh my life!
                  Don’t tell them that bit.
                  Even Balls doesn’t want them to ‘focus’ on any re payments that will HAVE to be made.
                  Balls wants everyone to believe that the 50p tax rate will fix everything….
                  Labour, Bozo, & Balls couldn’t even balance stuff during a ‘boom’.

                • Mynydd

                  Mr Balls has never said that the 50% tax rate will fix everything, Please stop making up stories.

                • Alexsandr

                  what will it fix then? Besides appeasing jealousy.

                • Nicholas chuzzlewit

                  Hilarious. Everything you post is Labour slanted fiction with no basis in economic reality. That was the most breathtaking piece of hypocrisy even for a Labour stooge.

                • HJ777

                  No, he said the 50% tax rate was a temporary measure.

                  He now seems to have changed his mind.

                • Holly

                  A FIVE YEAR temporary measure eh?

                  Being dragged down by’t Balls for FIVE years WILL be VERY painful.

                • Holly

                  Mr Balls never said when the 10p tax rate would kick in either, or whether he would scrap the 20p rate, or whether he would ‘tinker’ with thresholds.

                  All he said was, I’ve learnt sod all from my last muck up, and so I’ll have another shot at wrecking any recovery while in opposition, but if our ‘supporters’ get me into the Treasury, I will be able to wreck it much better from there.

                  I could be wrong though, and he is just a complete gobshite.
                  Oh and I forgot ‘useless’ before the word GOBSHITE!
                  Sorry.

                • Mynydd

                  The money lent by China to build our nuclear power stations will be repaid to China via high electricity prices ( almost £100/mwhr) by you, me and industry. Note a similar deal in France was for just over £30/mwhr.

                • Nicholas chuzzlewit

                  Which wether you like it or not is at least a sound basis for borrowing money I.e. The ability to repay a debt. Pity Gordon Brown did not think of that when he was bankrupting Britain.

              • David B

                Until it they want their money back

            • Mynydd

              ” simply repeating something over and over again doesn’t make it true” you should tell that to Mr Cameron. The banking crisis which started in America was not the fault of Mr Brown.

              • Joff

                Lets say you are right, whose fault was it that we were running a deficit of £70bn before the “banking crisis” then?

              • ButcombeMan

                Northern Rock was the start, all on Browns watch

              • Andy

                Oh yes Northern Rock was an American lender. How silly of us all not to realise that.

              • Cyclops

                That’s right. But he made it a damn sight worse than it should have been!

          • HookesLaw

            No
            Labour embarked on a pre election tax cutting and spending spree which left a 160 billion deficit in 2010 and a crippled economy to fill the gap.
            All Labour achieved was a dead cat bounce.
            The ecomomic malaise the country faced was far worse than suggested at the time.

          • wycombewanderer

            It shows much that you and a few at CIF(a misnomer if ever there was one!), that you are content to receive a few chicken bones thrown to you yapping poodles and aren’t quite intelligent enough to realise that these are the same chicken bones, Balls used to throw in the air when making his predictons for his voodoo economics!

          • Ron Todd

            How is it working out in France then?

          • David B

            The key phrase is Brown and Balls engineered the biggest crash in UK economic history.

            Think of it like driving towards a cliff. They chose to accelerate when the prudent (remember that word) thing to do was break. That should have been done in 2005 by cutting spending at the start of the bubble not stocking by borrowing and adding more spending.

            The banking collapse was caused by asset price inflation caused by cheap money created by the boom. It was a consequence of the economic mismanagement. Not the other way round

          • Cyclops

            Is that why we’re doing better than all of the Eurozone?

          • kyalami

            I am sorry but that message means you are guilty of hate crime.

        • Mynydd

          £70Bn is much less £100Bn Mr Cameron/Osborne will overspend in their fourth year in office when they promised that there would be no deficit by their fifth year.

          • RavenRandom

            You again. With the same lack of comprehension. Remember how momentum works in economics? It’s hard to pull a plane out of a nose dive for a while it keeps going, when it’s the worst economic downturn since 1929 then it’s a long while. When the Labour government was running a big deficit at the height of an enormous boom, thus ensuring that when it went wrong it went really wrong, then it takes a very long time indeed.

            • telemachus

              Gordon engineered a recovery from the Lehman recession before he left office
              Or did you not read the thread

              • RavenRandom

                You are a good little robot.

              • Alexsandr

                gordon engineered a boom by borrowing and spending. and idiot can do that. what is clever is increasing employment and reducing unemployment while reducing public spending.

                • Mynydd

                  Are you also calling Mr Osborne an idiot because he will borrow more in five years than the Labour government did in 13 years. Again the figures show the present government has not reduced public spending hence its overspend this year of £100bn.

                • Alexsandr

                  i dont know why people find this so difficult
                  1. labour left behind a huge debt. There was no way Osbourne could suddenly pay that back so the interest accrues. Thet interest is part pf public spending
                  2. you cant suddenly turn off public spending. I tend to thing they could have done more to save. But remember there are loads of off balance sheet liabilities, PFI and the railways, that still have to be paid. I am also not sure they should have ring fenced some expenditure. Especially DfID…

                • David B

                  The Balls plan b has worked so well in France cutting the deficit, raising income and living standards, improving employment and going for growth!

                • RavenRandom

                  Because Labour overspent massively.(See above). Even the IMF thinks we went into the recession with the worst financial position of any major nations.

                • Andy

                  The Deficit was the Fascist Party gift to the people. They so badly f*cked up the economy that it will take a generation at the very least to sort out the mess. Brown should be hanged for what he did, and Balls along with him.

                • Nicholas chuzzlewit

                  Read the article you idiot. Even the IMF now acknowledge that the structural deficit occurred prior to the financial crisis. Your posts are a travesty.

                • Cyclops

                  How much of that is interest on the Labour Debt?

                • HJ777

                  The current government has reduced the growth in spending pretty much in line with what it planned.

                  The deficit is larger than planned because tax revenues haven’t grown as fast as hoped. Unfortunately, they were left in a dire state by Labour and will take a number of years more to fully recover.

              • chudsmania

                He abolished boom and bust. Plus he saved the world. He said so himself. With people like him and Balls running the country , aided by window licking fanboys like yourself , its hardly surprising the country ended up on the verge of bankruptcy.

                • Mynydd

                  When Labour left office the country was out of recession with a low growth of 1% Since then we have had 4 quarters of negative growth

                • RavenRandom

                  Debt kills, Brown was an economic illiterate… “No more boom or bust”. He believed it, spent all the money. The dim witted muppet.

                • Holly

                  ‘Spent ALL the money’.

                  That is what Labour governments repeatedly do.
                  Regardless of who is leader, regardless of who is Chancellor, and Bozo believed he could follow in Labour predecessors footsteps, yet somehow get different results.
                  They do not know no other way to govern.
                  If Idiot & Beetroot boy get in, they WILL repeat the same mistakes, so up their own dark place, and arrogant, it will never occur to them that they will be wrong…..AGAIN!!

                • RavenRandom

                  Yes that’s what they do. I partly blame democracy (the least bad political system). If you want votes then borrowing to give freebies helps buy votes… or a client state. It’s a temptation for all politicians. Once that money has been given out it becomes enshrined as a right and very difficult to claw back.

                • Nicholas chuzzlewit

                  Repeating rubbish like that does not make it true. There was no double dip recession and we now have the fastest growing economy in Europe. Nothing you can say changes that even for a Labour stooge.

                • Cyclops

                  And in 2010 Labour said that things would have to get much worse before they would get better . Please stop being so dishonest.

                • Nicholas chuzzlewit

                  Impossible.

                • Cyclops

                  His silence speaks volumes.

                • HJ777

                  There is a simple trick you can do to increase measured GDP and therefore create ‘growth’. Just rapidly increase borrowing (i.e. the deficit) and spend it. This is what Labour did in its last year in office – and it worked.

                  Are you claiming that the current government could and should have continued this policy of increasing the deficit in order to spend more? If continued GDP growth was simply a matter of indefinitely borrowing and spending more every year, why doesn’t every government do it? Can you not think why this wouldn’t work?

              • David Booth.

                Gordon? Gordon? Gordon who?
                I’ll give you a clue, he’s even been airbrushed out of Labours history!
                I’ll give to another clue, he’s rumoured to be the MP for Kirkcaldy, although you’re more likely to see the Abominable Snow Man than Gordon clocking on for his day (paid) job!!!

                • HookesLaw

                  Brown lives off a nice fat 5-star expenses account and pays no tax on his out of parliament earnings.

                • David Booth.

                  Plus he’s busily writing a book entitled “How I Saved The World!”
                  You try going to your boss and asking can you to carry on being paid for your job whilst continuing to sit at home writing your memoirs. I suspect the answer would be along the lines of “****Off!” which is something I urge the voters of Kirkcaldy to do should Gordon Brown have the cheek to turn up at their door come election time asking them to vote Labour.

              • ButcombeMan

                You have work to do Tele, answer my question above

              • Nicholas chuzzlewit

                No most of us ignore lies from Labour the party of lies, lying and liars.

              • kyalami

                Gordon screwed a generation by his cavalier approach to the country’s finances. He is the worst chancellor certainly within living memory and quite possibly ever.

            • Mynydd

              You are wrong Labour were not running a big deficit at the height of the of an enormous boom. Please look up the figures and get your fact correct. the big deficit was after the global financial crisis not before it.

              • RavenRandom

                They were, 2007/8 -£33billion, due to rise to -£43billion in 2008/9. This is at the height of a boom, in other words government income has never been higher… yet he spent it all, and more. When the music stops and govt income drops below the norm (as it does in recessions), then you are well and truly screwed. At the height of a boom you should be running a significant surplus.

                In other notes the IMF think we were running a structural debt of -73billion at that time.

                “The new official analysis, based on a report from the International Monetary Fund (IMF), showed that Britain was running a so-called structural deficit of 5.2pc in 2007 – far higher than the 2.5pc initially stated by the IMF.

                Using this measurement, which records the amount by which public borrowing exceeds tax revenues after external economic factors are considered, Britain entered the global financial crisis in a worse position than other major economic powers. America’s structural deficit was 3.3pc, France’s was 3pc and Germany’s 1.1pc.” Source The Telegraph, numbers from the IMF.

                • arnoldo87

                  Yes – This was a revised estimate by the IMF from their original figure, but the revision took place in 2012. The fact is, though, that the ONS, in 2013 still had the deficit as £37Bn or 2.6% of GDP. This justifies Balls’ claim, especially as the debt figure was also below 3% of GDP at the time.

                  Your comments about deficits and what they should be after a boom etc… is fine economic theory, but a “significant surplus” has never been achieved by any government (of any party).

                  The best surplus was achieved by New Labour (4.1% in 2001).

                  Less impressive was Margaret Thatcher in 1989 (1.3%). and even if you take the IMF figure of 5.5% deficit for Labour in 2007/8 this compares with John Major’s desperately poor numbers of 7.4%, 7.6% and 6.1% in consecutive years.

                  Just take a look at the ONS web site graph for PSBR and you can see that the current problem was caused by something that happened in 2008.

                  Now what could that have been, I wonder?

                • RavenRandom

                  Nice bit of whataboutery and obsfucation. So they were, as I said, running a sizable deficit at the height of a boom, they significantly underestimated the structural deficit and they continued ramping spending to fund an election giveaway. Very prudent of them.
                  “No more boom or bust”.

                • arnoldo87

                  “Nice bit of whataboutery and obsfucation (sic)”

                  I’m the one giving all the facts – you are just providing bluster.

                  2.6% of GDP is not a “sizeable deficit”

                • RavenRandom

                  It is at the height of what at the time was known to be a huge boom. I am working with the same facts, you just choose to be an apologist for political, moral and economic incompetence. “No more boom or bust.” Could they have been more wrong?

                • HJ777

                  It was a huge deficit during the biggest credit boom in history. At the height of the much smaller late 80s credit boom, the government was running a surplus – therefore the deficit position, when it deteriorated then, did so from a much better starting point.

                • Nicholas chuzzlewit

                  That idiot will now stick his fingers in his ears, like every idiot lefty, and start sing la la la.

                • Nicholas chuzzlewit

                  The point is you idiot that Labour was running deficits when there should have been surpluses. It is not the size of the annual deficit but the difference between the deficit and the potential surplus that it should have achieved. Those gaps are massive and are part of the reason we ended up with a massive structural deficit. All the obfuscation and dissembling in the world can alter the truth that the structural deficit exists because Labour overspent massively when surpluses should have been accrued.

                • HJ777

                  Compared to a 2% surplus, also during a credit-fuelled boom (albeit one of less magnitude) , before the early 90s recession, it is huge.

                  Imagine how much better our current fiscal position would be had it deteriorated by the same amount but from a position of a 2% surplus. The deficit would rather less than half the current level.

                • HJ777

                  “This justifies Balls’ claim, especially as the debt figure was also below 3% of GDP at the time.”

                  The debt figure was never remotely near 3% of GDP. It was more like 40% of GDP.

                • arnoldo87

                  Yes -of course you are right. I mistakenly quoted the unemployment figure.
                  The GDP figure before the crisis was below 40% and better than the Golden Legacy figure left by Ken Clarke in 1997..

                • HJ777

                  That is incorrect.

                  The unemployment level under Labour never went below 4.6%.

                  The debt as a percentage of GDP left by Ken Clarke had just peaked after a recession and had started to fall. The failure of Brown was that he managed not to maintain that fall even during a boom. Comparing like points in the cycle shows that the debt as a percentage of GDP will peak at around double the level after the recession that occurred under Labour compared to the recession that occurred under the Tories. You cannot blame the current government for this since even under Labour plans this would have been the case.

                • arnoldo87

                  Apologies for getting it wrong twice. Let me try again:-
                  When Labour took over these were the key economic data:-
                  Inflation 2.34%; Debt 42%: Deficit 3.5%: Unemployment 7.5%

                  Equivalent figures for 2007/8:-

                  Inflation 2.85%: Debt 36%: Deficit 2.2%: Unemployment 5.3%

                  So, overall a better position just before the Banking Crisis than when New Labour took office.

                  You can get things wrong too. Here are the numbers for Debt as a % of GDP under John Major and Ken Clarke:-
                  1990 26.7%; 1991 25.3% ; 1992 26.7%; 1993 31.0%; 1994 36.1%; 1995 39.6%; 1996 41.2%; 1997 41.9%
                  No sign of the start of a fall there under Clarke (Labour elected in May 1997)

                  Thereafter the figure fell continuously up to 2002 when it was 29.34%, and the PSBR was in surplus. So Brown DID get the figures down (unlike Clarke). He then decided to spend more on Health and Education, but still did not get the debt % anywhere near as high as Clarke’s. In 2008 the debt % was 36.6%.

                  In an earlier post you mentioned the biggest credit boom in history. Rather than use words, could you provide some numbers to back up this claim?

                • HJ777

                  I did not get it wrong. Debt as a percentage of GDP did increase slightly in 1997 compared to 1996 but it stopped increasing in early 1997 and headed down thereafter. The whole year figures conceal this fact.

                  However, it is irrelevant. Labour inherited a debt that had was either peaking or had just peaked at less than 42% of GDP after a recession. It inherited strongly growing GDP and even more strongly growing tax revenues, which is why it managed to reduce debt as a percentage of GDP for the next 4 years by following the previous government’s plans. Somehow, however, debt as a percentage of GDP then started growing and they left office with it very much higher than they had inherited and with a record deficit which meant that it could do nothing else than rise considerably further under whoever the next government was.

                  Why you persist in comparing the peak debt figure AFTER a recession under the Tories with the debt figure in 2007/8 BEFORE a recession under Labour, escapes me unless your intention is to deliberately mislead (in which case you haven’t succeeded).

                  It was the biggest credit boom in history because if you look at both the rise in, and level of, household debt figures as a percentage of GDP or as a percentage of income, they reached record levels prior to the crash.

                • arnoldo87

                  The whole point of this debate is to question the hypothesis that the Tories are better at managing the economy than Labour.
                  You can only do that by looking at the important statistics related to their terms of office. Now, I fully accept that there is bound to be hysteresis in these data, but over such long periods, the figures must be taken to a degree at face value, and not be the subject of spin born of cognitive dissonance.
                  For instance, the Tories record in the 1990’swas pretty woeful. Yes they did have recession – but was this their fault or due to external factors? According to some people, the Labour recession of 2009-10 was entirely their fault and nothing to do with the outside world.
                  Equally, the Labour record of 1997 to 2008 was very good, achieving ten years of consecutive growth and avoiding totally the world recession in the early 2000’s.
                  When you talk about a record credit boom, the national level of credit is measured by the national debt and deficit, and we know they were in good shape in 2008. Household credit behaviour cannot be controlled by government, and even the interest rate decision is not in their gift.
                  So, even if it was the biggest credit boom in history, no adverse verdict can be delivered on Labour.
                  And in any event, the Tories matched Labour in its spending plans right up to 2008.

                • HJ777

                  The economy grew appreciably faster under the 1979-1997 Tory government than under Labour from 1997 to 2010.

                  The level of debt and deficit left by the Tories was far lower. Manufacturing output grew substantially under the Tories and fell under Labour – it was higher in 1997 than in 2010. The balance of payments was better. The levels of consumer indebtedness were far lower.

                  The deficit was not in good shape in 2008. They were running a substantial deficit at the height of the boom. The Tories ran a surplus at the same point in the cycle.

                  Household credit can be controlled by government through interest rates. The government changed the BoE MPC target to a measure (CPI) which totally excluded the boom in house prices from its considerations. If ‘no adverse adverse’ verdict can be delivered on Labour, how come we experienced a bigger downturn and were running a larger deficit than any other major economy?

                  I am no Tory and they have made many mistakes in economic management. But nobody can reasonably claim that Labour were not far worse.

                • arnoldo87

                  Do you really think that the impact of the Banking Crisis (a one off massive impact phenomenon) should be included in any comparison of Tories and Labour? The 2008-2010 figures distort the comparison markedly. The Tories would have experienced exactly the same thing had they been in power.

                  I am saying that the years 1997 to 2008 stand comparison with the 18 years of Tory rule.

                  In what way do you think that 2008 was the height of the boom? The growth of GDP was steady throughout Labour’s tenure but the annual growth peaked in 2000 at 4%, and shortly afterwards Brown did get a surplus.

                  On growth the average annual increase over 1979 to 1997 under the Tories was about 2.1% and under Labour up to 2007 2.9%. Even if you add the figures for 2008/9/ and to May 2010 Labour’s average is better.

                • HJ777

                  Come off it.

                  The banking crisis did not come out of nowhere. It followed a good old-fashioned credit boom (just as before the early 90s crash, only bigger) which inflated GDP. No credit boom, no crash. They are twins – include the effect of one or the effect of neither

                  Therefore if you want to discount the crash as if it didn’t happen under Labour, you also have to discount much of the growth in GDP before the crash.

                  Growth under Labour was not better. The figures are similar but if you exclude the recession into which Britain and most of the world headed in mid-1979 (for which fact you cannot hold the Tories responsible, although you could reasonably argue that they may have exacerbated it) then there is a very clear difference. Labour inherited GDP growth of around 3.5% p.a..

                  Remember also that using the figures to 2010 excludes much of the recessionary hangover of the last two years (which undoubtedly would have happened under Labour too) but does include the GDP rise caused by Labour’s massive rise in borrowing and spending (much bigger than the value of GDP growth it created) in their last year of office.

                • arnoldo87

                  So – it’s OK to exclude the Tories’ recession but we must include Labour’s?
                  We are clearly not going to agree, but thanks for at least using data in your posts rather than the ad-hominems from the usual suspects.

                • HJ777

                  On the contrary, it was you who excluded Labour’s recession but included both the recessions under the Tories, even though the first of them started as the Tories came to office meaning that they could be criticised for how they handled it, but not for the fact that it happened (especially as it was a serious recession in most western countries).

                  There are lags in economic policy between cause and effect and these vary enormously according to what is changed. However, a fair (guess)estimate would be that the previous government (assuming it has been in power for some time) is probably responsible for most of the first two years of economic performance under the following government (and for some of it, albeit a decreasing proportion, after that).

                  If you do this and attribute the first two years of economic performance to the previous government, then the poor performance under Labour is starkly clear. As I said, I am no Tory, but it is clear that even though they have made serious mistakes, overall their effect on the economy is far superior to that of Labour.

              • Nicholas chuzzlewit

                You need to write to the IMF about that because they think otherwise and I suspect their access to economic data is better than that of a Labour Party Troll.

              • Cyclops

                Wow. What an utter moron. Or liar!

              • HJ777

                Labour were running a deficit of approximately 3% of GDP at the height of the biggest credit boom ever seen.

                Prior to the early 90s recession, and at the height of another, albeit smaller, credit boom, the Tory government was running a surplus of about 2% of GDP.

                Imagine how much better our fiscal position would now be had the starting point been 5% of GDP better than it was.

              • HookesLaw

                Labour were running a deficit at the height of the boom. By definition at the height of a boom you should be paying off debt.
                eg – Browns deficits increased each year from 26 billion in 2002 to 42 billion in 2005. Deficits continued in subsequent years. Even as a %age of GDP borrowing went up in those years. In 2004 as an example growth was a high 3.1%, but Brown’s deficits were increasing.

          • Joff

            That is correct. Still less than the £160bn that was left in May 2010 though isnt it?

          • Andy

            In 2008/9 the net borrowing requirement was £158.9 billion.
            In 2009/10 it was £141.0 billion.
            In 2011/12 it was £121.0 billion
            In 2012/13 it was £82.1 billion.

          • Nicholas chuzzlewit

            Ignorant dissembling rubbish. Do you have a bet going with Telemachus as to who can be the biggest idiot? That will be worth watching.

          • HJ777

            So, yes, their forecasts were wrong. Strangely enough the government can influence the economy but it can’t guarantee a certain level of performance.

            Gordon Brown ran a bigger deficit every year from 2002 onwards than he forecast the previous year. The difference is that his government left us with a record deficit and this government is, for all its faults, reducing it.

          • Nicholas chuzzlewit

            As ever you are confusing deficits with debt. Leave this to the adults.

        • arnoldo87

          Where does the £70Bn figure come from? The ONS data shows £37Bn in 2007/8.

          • Mynydd

            Please don’t upset the children by quoting facts.

            • RavenRandom

              -73 billion is what the IMF say Britain’s structural deficit was. Though no doubt your wilful ignorance engine will ignore that.

            • Cyclops

              So lend us £37 bn…………………

        • Mynydd

          Please tell me which years before the crisis when there were deficits of £70bn.

          • Cyclops

            Which crisis? Oh, you mean the Labour Debt crisis!

      • Colonel Mustard

        New Labour script:-

        “Brown engineered the recovery before being kicked out of office.

        Osborne then ‘choked off’ that recovery.”

        Both Balls and Big Lies.

        • David B

          And removed from reality. The “recovery” was bought with borrowed money. It cost us around 3% of the economy to get less that 0.5% growth.

          Tele forgets this little inconvenient fact

          • Alexsandr

            yes. and our grandkids will end up paying.

          • telemachus

            Look son
            It mattereth not how it was achieved
            The point is that Gordon saved millions from misery

            • David B

              I’m not your son

              It is of critical importance how it was achieved. It was achieved in a way that was totally unsustainable. It did not lift anyone out of misery. It was economic “hair of the dog” a bit more borrowing to keep the hangover away until the election was over.

              But the hangover after “hair of the dog” is always worse than if it wasn’t taken.

              • telemachus

                It is not unsustainable
                As you well know as the investment spauns growth it rolls in the tax receipts reverses the deficit and pays down the debt
                *
                GCSE economics

                • Nicholas chuzzlewit

                  “The economic logic behind his [Ed Balls] thinking would not get him a pass at GCSE Economics” the words of Lord Myners former City Minister under Gordon Brown in today’s Sunday Telegraph. “Ed Balls takes us back to old Labour and the politics of envy” lord Myners again in the Sunday Telrgraph of 26th January. Now there’s a quote or two for you.

                • David B

                  GCSE economics is simplistic – eg it assums tax does not affect behaviour. Your reliance on such simplistic economic theory explains all of your inability to grasp the real situation.

                  You need to look into marginal propensity to consum. This suggest that as a country borrows more to spend the less effective that borrowing and spending will become. As we were over borrowed as a country the extra borrowing had no long term effect.

                  This is as simple as I can make this for you’re GCSE experience. I suspect a bit of research on why the borrow, tax and spend policy failed in France might deepen your economic knowledge of why the 2010 blip was an illusion and why the Balls plan will fail if we have the misfortune to have it implemented after 2015

                • HJ777

                  Not all investment does spawn growth. Some reduces it.

                  If more investment automatically created more growth, then all we would have to do is to divert an ever greater proportion of our resources into investment and we would be rewarded with increasingly rapid growth. This is obvious nonsense.

                  It is possible to over-invest just as it is to over-consume. The optimum balance between investment and consumption is a finely balanced one and it varies substantially depending on what is being invested in and what is being consumed (i.e there is no overall ‘correct’ figure. Nobody can know what the correct balance is – that is why it is best left to huge numbers of individual decisions in a market in which knowledge is highly dissipated.

                  Not that Brown knew the difference between investment and current spending anyway. He kept describing the latter as the former.

                • HookesLaw

                  More to the point if all you had to do was spend to generate ever more growth then life would be easy and even you or I could be chancellor.
                  To keep things at a hopefully acceptably simple level, spending by the govt as opposed to individuals is still the same spending and can therefore not generate any more growth. Of course masses of spending can be generated by borrowing money the govt does not have.
                  This will inevitably appear as an increase in GDP. But the consequences of this will appear eventually.

                • HJ777

                  What do you mean “EVEN you or I could be chancellor”?

                  Speaking for myself, I am pretty confident that I would be a very good chancellor. This may sound arrogant but, in fact, it is the complete opposite. I would be a good chancellor partly because I understand the limitations of the power of chancellors to directly control and direct the economy. I would see my job to simplify things and to get government out of the way as much as possible.

                  As Hayek observed: “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”. It is a great pity that Brown didn’t understand this. Osborne, of course, is a much better chancellor than Brown but he would also do well to remember this as he is not immune to the tendency to try to direct outcomes through complicated government policies.

                • HookesLaw

                  The point is its easy if nothing goes wrong and other events intrude to disturb all your neat plans.
                  Of course you would be a better Chancellor than Brown.

                • HJ777

                  I wouldn’t have ‘neat plans’ – I would try to operate according to sound principles, not more and no less.

                  Being better than Brown is hardly a challenge. I have some time for George Osborne, but I do think I would be better than him too, partly because I am not a politician (not that I could be chancellor without first being a politician, but you know what I mean) and partly because some of his mistakes have been because of inexperience (these mistakes were often immediately clear to me at the time. I might well have made them at his age too).

                • HookesLaw

                  ‘Sound principles’ would be your neat plans. i am sure you would have good ideas – I am not knocking that. that was not the point of my original remark. But other factors get in the way.
                  Osborne is operating on sound principles but has faced lots of criticisms and pressures. And unexpected ‘events’.

                • HJ777

                  I realise that you are defensive about Osborne, but am not a tribal creature and it is certain that although Osborne has been much better than the alternative since he became chancellor and deserves credit, there are still valid criticisms that can be made.

                  There is considerable evidence that economic growth is better fostered in situations where there is a large deficit that needs to be tackled after a recession by initial cuts in public spending followed later by tax rises. Osborne made a mistake in doing it the other way around. While I can sympathise with the politics of this, and economically it was far preferable to Labour’s alternative, it was an economic mistake.

                • telemachus

                  Your theory may be correct
                  But the point was that Gordon instituted an investment program that had returned us to growth
                  Osborne choked the investment and reversed the growth leading to a double dip recession in all but the technical definition

                • HJ777

                  That’s not true. Brown and his government instituted a spending (not investment) programme that created an unsustainable rise in measured GDP. Capital investment was actually cut. It was cut further under Osborne but his cuts in investment were simply an implementation of the exact plan left by Labour.

                  You seem to be under the erroneous impression that investment spending creates almost immediate ‘growth ‘whereas current spending does not. In fact, it is almost exactly the other way around because most capital investment (even if wisely made) takes time (usually on a timescale of several years) to generate a return, whereas current spending feeds through to the GDP figures almost immediately.

            • kyalami

              The millions he saved somehow funded his lifestyle, as Guido pointed out this week.

            • Holly

              Apparently, he’s still doing it.
              Costs an awful lot in ‘expenses’ our Bozo.

          • Nicholas chuzzlewit

            Labour supporters ignore inconvenient truths and simply compose a narrative that suits their purpose. They are fantasists who are utterly immune to inconvenient facts.

          • Rossspeak

            telemachus doesn’t deal in facts – only distortions.

        • Mynydd

          Just look at the figures, the recession was over when Mr Brown left office and there was low growth at 1%. Again the figures show that under Mr Osborne there have been 4 quarters of negative growth. that means for one year in three and a half the recovery was in reverse.

          • HJ777

            Anyone can inflate measured GDP for one year by raising borrowing and spending enough – that’s what Labour did. It’s an old trick but not sustainable (in fact, it creates even more problems subsequently because it leaves you with a large deficit and increased borrowing to finance.

            • Nicholas chuzzlewit

              Sorry she does not do reality or honesty.

          • Colonel Mustard

            Remind me again who said of the Treasury “The money is all gone”, when he said it and what party he belonged to?

        • telemachus

          Not new
          I have been telling y’all this week on week since 2010
          Hopefully now folks will listen

        • Colonel Mustard

          The troll telemachus fails to understand that a lie is a lie however frequently it is repeated.

          • telemachus

            SIGNS OF INSANITY:
            1. Talking to yourself.
            2. Talking to inanimate objects with hopes that they’ll answer you.
            3. Having conversations with yourself/said inanimate objects.
            4. Laughing maniacally at the worst of times.
            5. Thinking you’re a mythical creature. (oh god, i am insane!)
            6. Singing ‘POLKA DOTTED PIG TOES!’ when you’re supposed to be doing something productive.
            Finally, 7. Trying to cure abuse/world hunger/global warming/etc. all by yourself.
            *
            Re 4 – I refer you to your oft posted laughing sailors

            • HJ777

              So you admit you’re insane?

            • Colonel Mustard

              So you looked at the link and heard the sailors laughing at your ‘comments’.

              Good.

        • Makroon

          That is true but the Conservatives are allowing Labour to make headway with the old Brown lie that “it was a global crisis, started in America, and all the fault of the banks”.

          The Conservatives have let them get away with murder – every time some mealy-mouthed Conservative muppet “spokesperson” starts rambling on about the “banking crisis”, they strengthen MiliBalls great deception.

          Call a spade a bloody spade you idiots !! It was BrownBalls’ crisis, made wholly by them over a decade !!

          • Nicholas chuzzlewit

            Well said Sir!

          • HJ777

            You are correct that Labour are getting away with claiming that it was something that just blew in from the US.

            However, I think you go too far the other way. However incompetent Labour’s economic stewardship was (and it was utterly incompetent and a major, if not the major, contributory factor both in creating the crisis and putting us in a poor position to withstand it), there were also international factors in play since we were not the only country to be affected (although we were the worst affected major economy).

      • ButcombeMan

        EXAM QUESTION

        As Balls mouthpiece on here can you tell me what the administrative costs would be in identifying and withdrawing from the richest recipients the Winter Fuel Allowance and how he and Milliband propose to do that and withdraw the allowance.

        Please show your workings.

        Please also explain how such a proposition would deal with households where one partner of two has a high income, the other does not.

        These are simple issues to explain if Balls and Milliband have thought things through.

        If of course, as I suspect, they are making things up, on the hoof, you will not be able to give a sensible explanation.

        Now, off you go lad. If you do not know, seek help from the pair of idiots.

      • David B

        The Ed Balls response unit working overtime. I hope he pays double time for a Sunday

      • Nicholas chuzzlewit

        Tagged tripe and dissembling rubbish as predictable as night follows day. Even the IMF has recognised that Labour massively overspent money that we simply could not afford to borrow. The reason Labour did this was hubris and the intellectual monstrosity that they had ended boom and bust. The single most catastrophic and intellectually arrogant boast in British political history. The result was a massive structural deficit incurred before the global financial crisis and a 7.3% contraction of the economy. We will be paying for this folly for at least another 20 years. Yet Balls that dissembling imbecile might still become Chancellor in 2015. Shame on us for allowing this terrifying possibility to even exist.

      • HJ777

        Who cares what he thinks?

        The IMF says we had a structural deficit of around 7% of GDP even before the crisis. This structural deficit was merely (partially) concealed by the credit boom that Brown claimed was economic success.

      • HookesLaw

        What pushed up the deficit was a collapse in revenues from a banking sector that was clearly cyclical and far from structural as briwn thought. In other words spending levels were unsustainable.

        In respect of Balls’ 50p idiocy, ‘fullfact.org’ point out that whilst there was not much change in revenues in the first year of its imposition once people adpated their tax paying habits it occured a loss to the exchequer.
        In 2012 the Treasury reported –
        ‘The conclusion that can be drawn from the Self Assessment data is therefore that the underlying yield from the additional rate is much lower than originallyforecast (yielding around £1 billion or less), and that it is quite possible that it could be negative’
        Labours claim that it raises billions is patent nonesense.

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