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How Osborne’s ‘deficit halved’ claim backfired  

3 January 2015

9:25 AM

3 January 2015

9:25 AM

So – how did it go? Yesterday, Tory HQ yesterday issued a poster with the misleading claim that the deficit had been ‘halved’ where in fact the reduction has been closer to a third (see below). In election campaigns, a ‘porkie*’ is introduced in stages. It debuts when dropped into a speech or article. If no one complains, it gets used again with a bit more boldness. And if there’s still no pushback, it’ll be used bigger – say, on a poster. As it was with Labour’s £35bn Tory cuts porkie, so it is with Osborne’s ‘halved the deficit’ porkie.

But judging by today’s newspapers, the ‘poster’ stage of this porkie seems to have gone rather badly.

“Fib! Fury over Tory poster claim that party has ‘halved the deficit’” says the Daily Mail. Its deputy editor, Tony Gallagher, has warned HM Treasury that this is how his newspaper will treat spin – from any party…

Screen Shot 2015-01-04 at 19.03.54

Tories accused of lying in campaign poster that claims deficit has halvedsays the Independent.

“David Cameron is to put the Union Jack and questionable claims about the deficit at the heart of the Tory election campaignsays The Times


Cameron launches election campaign with controversial deficit claimsays the Guardian, again focusing on the dodgy nature of ‘halving’ claim.

And here’s the FT‘s intro…

“David Cameron and George Osborne have launched the Conservative general election campaign with a contentious claim that they have succeeded in halving the deficit…”

The FT knows a thing or two about using clear language for readers interested in finance. As regular readers know, when it writes about ‘the deficit’ it refers to cash, rather than a GDP ratio. If it refers to a GDP ratio, it says so.

And yesterday, Radio 4’s World at One led on the porkie as well.

So a tiny, pointless trick eclipsed Osborne’s genuine achievements: the jobs miracle, the business creation (helped by his corporation tax cuts) and more. Even the Daily Mail, hardly a Miliband cheerleader, zeroed in on the ‘fib’ – and this is what journalists do when they encounter a fib. They tend to challenge and confront it, and the row about the fib ends up becoming the story.

So Osborne’s claim to have ‘halved the deficit’ without referring to GDP is not just dishonest, it’s bad politics. Very bad politics.

David Cameron has a long line of genuine, hard-won achievements that he can campaign on. George Osborne flunked his deficit reduction programme (below) which I accept is embarrassing for him, but if he tries to spin his way out of this embarrassment he just makes it far worse. Far better focus on the real things that he got right.

I hope the Tories learn lessons from this. Credibility is important in politics, and the campaign has a very long way to go.

* A porkie is an election statement which is misleading, but carries with it a long and technical explanation intended to stop anyone questioning it. In this case, the claim is explained by the idea that the word ‘deficit’ is defined as a ratio of PSNB/GDP and this ratio (which economists find more useful than straight cash) has halved over the five years.

And here’s Osborne’s original deficit plan, vs outcome. The deficit is forecast to be £91.3bn in 2014-15, almost three times the £37bn that he originally said it would be by now. In those days, he was mocking Labour for its poverty of ambition in merely halving the deficit.

Screen Shot 2015-01-03 at 09.23.43

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Show comments
  • Murray Hutchison

    Lads lads, you are all missing the point. We hopefully know the difference between debt , structural deficit and deficit. The BBC web site has a very good explanantion of each.The key political matter is the Tories were voted in ( in coalition anyway) on a platform of removing all the deficit under the last parliament. That is patently far from what they have delivered. So you decide this time : who do you trust ?

  • peter_lloyd

    There are three very good reasons to not let this issue die and why Grant Shapps and other senior Conservatives should be challenged on it every time they talk about the macroeconomic numbers

    1. It is incontrovertible that the statement that the deficit has halved in this Parliament is untrue

    2. It is the first of what will be many grand statements in the election campaign and if politicians on all sides see that they are going to be attacked and better held to account when they lie then they will be much more circumspect. The voters are fed up with lying and gross distortion in politics.

    3. One of the main reasons that the deficit is a bigger problem than the government expected is that higher GDP has not delivered higher government revenues in the way all the economists forecast. Therefore relying on the deficit to GDP ratio makes less sense, not more.

  • Sean L

    It’s not the *lies* – that’s a red herring – but the omissions: the absence of truth in public life about things that we’re all saying privately – these forums being a glimmer of the iceberg. For instance I can’t think of a single politician uttering a word about politically motivated police arresting men on no evidence other than the uncorroborated testimony of their accusers for decades old offences, their names dragged through the dirt while the Rotherham gang members and others of their ilk retain relative anonymity; or the mandatory and indiscriminate allocation of subsidised housing to single mothers irrespective of their age or countries of origin or length of residence and the disastrous effect this has on the very possibility of family life, to say nothing about the housing market itself; or the gross media distortion on violent crime coverage where the perpetrator happens to be white, the victim not, when the media abandon all notions of objectivity effectively surrendering editorial policy to professional race agitators: when if the racial roles were reversed the media themselves would be in the dock for inciting racial hatred. But then you can hardly blame the politicians I suppose when the Daily Telegraph has itself become a standard bearer for political correctness, from global warming to ‘anti-racism’. The former member for Wolverhampton used to say that he didn’t have the right *not* to voice the concerns of his constituents – that was his job, what he was *for*. But when a Parliamentary candidate gets nicked merely for reciting Winston Churchill’s words, not a word other than in a blog from Dan Hannah. Otherwise the only public voices that come anywhere close to contradicting the orthodoxy, other than on economic policy, that’s to say telling the truth are a few columnists Liddle, Littlejohn, Booker, Hitchens. But it’s more about the identity between editorial policy, what and how things are reported, and major corporate interests, the state or mandarin classes, big business, banking. . . all old news granted, but sometimes you just need to sound off. . .

  • Aberrant_Apostrophe

    Talking literally of smoke and mirrors, according to the Mail the landscape in the poster is actually a mirror image of a photograph taken in Germany, with the cracks in the road magically filled in:

  • paul

    You can fool some of the people some of the time but you cannot fool all of the people all of the time they are insulting our collective intelligence !!

  • Stereotomy

    Congratulations to Fraser for doing so well to get this publicised. The sooner politicians learn that in the internet age, you can’t lie this blatantly and get away with it, the better.

    Unfortunately, I expect a good number of politicos who read any of those articles won’t be thinking “Wow, that backfired.” They’ll be saying “What a well-deployed lie by clever Mr Osborne!”

  • Millsy

    Yeah good work Fraser, and I hope you will be picking up on Labour’s “fibs” as well.

    I imagine the thinking is that if Labour get away with it week after week why don’t the Tories join in?

  • monty61

    It’s in Weimar apparently – the road. Much jollity from the Kippers.

    I guess Shappsy couldn’t stop himself from on-line fakery, it’s how he made his money after all.

  • Peter Stroud

    Hopefully, they will no longer use this particular porkie.

  • John Andrews

    Osborne has the ability to do for the Tory vote what Miliband is doing for the Labour vote. Ugh.

  • Conway

    A porkie is surely the diminutive of rhyming slang, pork pie. In other words, a deliberate untruth.

  • Mike

    The problem as I posted previously is its all smoking mirrors and conflating different statistics.

    The GDP has risen due to the fact that Osborne has borrowed more money which is spent in the current financial year whilst at the same time the deficit has only dropped in absolute terms by around 33%. By raising the GDP, the government expenditure at 45% currently, makes the deficit reduction in percentage terms to GDP, become 50%.

    Both figures are true but they are not the same thing at all. The problem then arises that by raising GDP through borrowing, sometime in the future that borrowing has to be paid back by the tax payer much like Gordon Browns PFI smoking mirrors ploy.

  • Harry Alffa

    If you actually genuinely want to get the economy going again, and are not just (like Fraser Nelson) a propagandist for the right-wing of the establishment, then you’d work to get whichever political party you are a member of to adopt the idea of

    And if you aren’t convinced by this:
    there’s something wrong with your brain and you should see your GP giving him the results of this test:

  • David B

    Learn campaign tricks from Brown is not a good look.

    Labour will spin fibs on the NHS and education and the Tory’s need to have clean hands to point them out.

    • EnosBurrows

      It is not fib to say that the Tories have privatised the NHS for the benefit of their friends in business who can think of nothing nicer than a big state contract with guaranteed profit.

      • David B

        Yes it is! Labour love to say privatisation as if the next time you turn up in A&E you will need a credit card to get treatment. That is untrue, the NHS is still free at the pornt if use. The Tory’s have just carried on the Labour policy of getting the best health care without political dogma about the provider. It doesn’t matter if the doctor is self employed, working for a private company or enployed directly by the government as long as the service is “free at the point of use”. The NHS founding principle!!!

      • Gary_Baldi

        You mean like McRuin’s PFI chain around the NHS’s neck?

        • EnosBurrows

          I think New Labour’s introduction of an “internal market” and PFI paved the way to a bigger financial mess.

  • The Dybbuk

    Day 3 of the phoney election campaign and already war weariness grips the nation. All this heat about a poster most people will glance at and pass by. The partisans on left and right take up arms ready for a 100 days war. The electorate carry on with their lives safe in the knowledge that claims of halving of the deficit however expressed means nothing because ‘all’ politicians are lying rogues and anyway it’s all the fault of……… (fill in today’s bogeyman)

  • Dave Hogarth

    Why anyone can defend this only leads me to believe they are Tory shills! The fact is the deficit has not been halved. Thats it!

    • Mike

      Strictly speaking it was never half of 130 billion or 65 billion as the cut was 33% of around 130 million leaving the 2014 deficit at around 100 billion.

  • The Masked Marvel

    Someone ask Lynton Crosby if it was worth it.

  • FrankS2

    But surely I heard that nice Mr Shapps yesterday saying that it was alright to mislead with the figures. At least I think that’s what he said. He’s such a clever chap, it’s not always easy to understand him!

  • ManOfKent

    Why does Nelson try and sugar coat and try to trivialise this most foul behaviour of politicians. This is not a ‘porkie’. IT’S A LIE and a LIE is as as offensive an anti democratic act as attempting to rig an election. To lie is a defined sin of ten commandments proportions (baring false witness and all that) and as such a breach of the basic tenets of civilised society

    That it is now expected that senior establishment politicians and our government will lie, mislead and misrepresent out of pure self interest only demonstrates what unworthy corrupt creatures now infest the establishment political arena. If we cannot trust our government (and clearly we cannot) or our major political parties (and clearly we cannot) who can we trust?

    • Murray Hutchison

      My dear fellow, politicians only use “terminological inexactitudes.” Well done Mr Churchill

  • Aberrant_Apostrophe

    That poster is a complete fiction. Where are all the potholes and windmills? Still, at least they managed to get the flag the right way up.

  • Radford_NG

    And the cartoon response by Peter Brookes in The Times:

  • IanH

    Fraser, it is precisely because you keep trotting out the graph above without bothering to mention that the Eurozone blew up after those projection, that I am not renewing my Spectator subscription. You are telling bigger porkies than they are by leaving out that information.

    • southerner

      Ah yes. Everyone else’s fault but Gideon.

  • WatTylersGhost

    Are the Tories sure that road is in Britain?
    It looks very much like a stretch of road in the Charolais region in central France.

    • monty61

      Postergate! Perhaps more one for Guido than here but it could be a laugh trying to find the location of the picture. I agree it doesn’t seem terribly British (no fences, hedges or stone walls for one thing.

  • Tim

    The Spectator and Fraser Nelson in particular are being ridiculous over this. Economists look at deficits in relation to GDP. That is why for example a £90bn deficit would be little for the USA, is a serious but manageable problem for the UK, and would send Burkina Faso bankrupt. Clearly the size of the economy is relevant.
    Even more obviously inflation is relevant. If we looked only at cash measures of debt we would be ignoring the fact that inflation makes that amount smaller in real terms every year. If a politician started boasting about rises in GDP in nominal terms Fraser would (rightly) have a go at them for not using the right metric.
    Politicians do mislead and lie. They should be called up on it. But not when they are using a perfectly valid and accepted way of talking about stats.

    • southerner

      “Economists look at deficits in relation to GDP.”

      But as this is a poster aimed at Joe Public that argument doesn’t really wash does it?

      • Mike

        You beat me to it, it takes a bit of digging to understand the sleight of hand that the Tories are trying on.

  • starfish

    Ok. I’ve got it

    Is there any other news?

    Or are you going to continue congratulating yourself?

  • vanLomborg

    The deficit was not halved, adjusted or otherwise.

    What we have is the ONS reporting bottom line financial data which is that the UK’s IIP is an added up LIABILITY of £460bn over a two year period.

    That is a £460bn loss (over two years) in an economy with a GDP of a mere £1,500bn pa – all achieved during the Osborne years. Jesus Christ!

    • perdix

      Don’t confuse debt with deficit.

  • davidofkent

    Unusually for this country, George Osborne’s little wheeze was spotted by a lot of ‘ordinary folk’ very quickly during his Autumn Statement. In the same way, we ‘ordinary folk’ have spotted that the rise in GDP has done us no good at all. Thanks to still unlimited immigration, GDP per capita has not moved an inch. The Tories need to get a grip on whoever it is keeps pushing out these easily-spotted little white lies.

    • Mike

      Its probably due to that newish trait that most of us believe that when politicians open their mouths, only lies come forth. We’re now extremely skeptical and NEVER take what they say as gospel anymore.

    • Conway

      Actually, GDP per capita has moved more than an inch – it’s dropped! We are worse off now.

  • Will Richardson

    The jobs is. to Zero hours, part time, short term, sanctions etc.

  • Gerschwin

    Is that 0% growth guv’nor?

  • A World of Paine

    Ah- the old Tory economic miracle trope again. Miracle? – mirage more like.
    New Jobs under Cameron – 1.7 million. Immigrants under Cameron – 2.2 million and counting – 10,000 more every single week according to the ONS – wasn’t that Dave’s “no ifs, no buts” promise for the whole year?
    GPD per capita down, income per capita down.
    Oh dear, all in all another whopper from Dave. Pull the other one Dave it’s got bells on.

    • Blindsideflanker

      Indeed , immigration is another deception, they try to spin it that it is just EU immigration that has knocked them off their target, but hope people won’t notice that even taking just non EU immigration (130k) they have miserably failed

    • Dirkster the Fox

      Well said. Gone of the days we feel we have to put up with these lies. Now we have UKIP…..

  • swatnan

    Well done to Fraser for pursuing this; the Tories are bare faced liars, and a complaint needs to be made to Ethics and Standards. If they get away with this porkie, then who knows what others will follow in train, along the lines of UKIPs downright lies.
    There seems to be no honour left amongst this Govt, judging by the cheek Priti Patel had in cutting public sector payoffs, when its the private sector which have their snouts in the swill.

    • Alexsandr

      Better a tory lie than the paedo apologists in labour

      • GraveDave

        We’re all paedo apologists now,.

      • radicaljoe

        Better the paedo apologists in Labour than the paedos in the Conservatives.

      • Wednesday

        Right, because our choices are literally one or the other.

        • Pacificweather

          Unless you are one of the 52% of voters whose vote is ineffective, then you have no choice at all.

      • FrenchNewsonlin

        …or the brazen criminals in Labour-run Rotherham where 1400 underage children raped for 16 years by Pakistani Muslim descendants remain free to roam and rape because discredited multikulti PC priorities trump the rule of law.

        • Pacificweather

          I think it was the PC’s priorities not the PC priority that was the problem. Bone idle the lot of them.

      • Mike

        Marginally better but the fat lady hasn’t sung yet over the current investigation into child abuse and possible murder amongst the Tory ranks.

    • Aberrant_Apostrophe

      …along the lines of UKIPs downright lies.

      Can you list what those are? Thanks.

    • Mike

      UKIP were a lot more clever than this when they said god knows how many immigrants could (not would) come from Eastern Europe. The usual suspects pounced on this and and kept repeating that UKIP said they would come when that wasn’t true. You have to have complete and absolute deniability if you want to entrap others in suggestion you said something that you can prove you didn’t.

      Farage passed that test, Osborne failed this one.

  • David

    Fraser, in your original text you called it a ‘porkie’. As you
    are fully aware ‘porkie’ means lie. It is not a lie. There is a discussion to
    be had about using percentage values or cash as a measurement. You did not
    explore that. You merely called it a lie.
    Calling it a lie was incorrect. Unacceptable journalism worthy of the Daily

    Your attempt to redefine ‘porkie’ to mean ‘misleading’ is ridiculous.

    • Alexsandr

      The discussion is about whether you should state yiur methid, not the best statistic for wonks. It was a silly error that the tories should have foreseen.

      • David

        Tend to agree. I expect politicians to choose the metric which
        best supports their position. That’s what they do. It would be better if they
        included the measurement units they are using.

        My point is that Fraser does not explore the issue he merely
        call the figure a lie. He could have called it misleading, as he is now trying
        to do, and explored the issue but he didn’t do that. Just as bad as a politician really.

      • GraveDave

        No, it was a deliberate omission they thought we’d be too stupid to notice.

    • peter_lloyd

      It is a lie. The deficit is the gap between the government’s income and expenditure and has always been used in that way. It’s a monetary figure. It is perfectly alright, but different, to say that the deficit is lower as a proportion of gdp with the implication being that the money could be found because the economy is bigger. It still has to be found though. If the Conservatives want to win the election they are going to have to stop lying and distorting because it is exactly that which is putting people off the mainstream parties.

  • gerronwithit

    “Let’s Stay On The Road To A Stronger Economy.” Just trips off the tongue, not! If I could get it to stay in my mind for more than a nanosecond I might be tempted to compare the poster to David Byrne’s “We’re On The Road To Nowhere!” As to the ‘fibs’ about the economy, I don’t think it needs any more PPEs to see that we are still grossly overspent. Why didn’t he (Georgie boy) just say that we (The Tories) will stuff the economy up less than Labour, but stuff it up they will still do, and you know it!

    • Tom

      ɱy co-worker’s aunt makes $89 an hour on the computer . She has been unemployed for 7 months but last month her pay check was $19321 just working on the computer for a few hours. check it out;.­S­e­e ­h­e­­re­.

  • Shinsei1967

    Here’s Jonathan Portes (Director of the NIESR, regular TV economic commentator and no supporter of Osborne) writing today on the measurement of deficits:

    “Well, I plead guilty: we economists think about the deficit as a percentage of GDP because, as ToryTreasury has repeatedly and correctly pointed out, for most purposes that is the most economically significant measure.”

    • southerner

      Yes but the poster hasn’t been designed for economists. It’s for the general public and that is why it is misleading.

      lf you’re quoting Portes why not quote the important bit?”The real issue is the earlier (false) claim that halving the deficit would be disastrous.” Gideon ducked all the important decisions because he’s a socialist spendthrift like the rest of the L*L*C.

      • vanLomborg

        It must have occured to you that you contradict your own post.
        “The poster hasn’t been designed for economists”, followed by the suggestion that ‘non-LLC’ punters had a superior ability to understand basic economics. As if. The poster was designed for all those who would believe anything, that North Korea posed a global threat or that Britain was on track to overtake the German economy within a decade for example.

        • southerner

          “…followed by the suggestion….”

          Ah that old debating trick. Invent a position the poster has not posted (the usual weasel word is “implies” but “the suggestion” also works). Post a response (in your case completely bizarre) against that straw man and then retire back to the meths.

    • Fraser Nelson

      Kinda makes my point: macroeconomic economists may think of ‘deficit’ this way but ordinary punters don’t

      • Shinsei1967

        I’d say that “ordinary punters” (ie those who evidently don’t read the business pages of newspapers, not just non-macroeconomists) might benefit from journalists, like yourself, pointing out that looking at deficits as a percentage of GDP is the most meaningful way of measuring them. Rather than writing articles saying that claims to have halved the deficit are “lies” or “porkies” when this is clearly a factually accurate statement (and consistent with previous deficit claims).

        There are plenty of economic issues where “ordinary punters” don’t understand the economics, but that should be a reason to educate and not to pander to ignorance. You yourself, Mr Nelson, frequently do this when you rightly criticize politicians for confusing debt with deficits.

        And to add to today’s mix. Here is the Sunday Times economic correspondent, David Smith, saying that he looks at deficits as a percentage of GDP.

        • monty61

          Give it a rest. You are sounding ever more desperate and ridiculous.

        • Mike

          Have politicians forgotten who the customers are ?

          There was that greengrocer who was fined by the local trading standards for selling in Ibs and oz because that is what his customers want. Similarly the customer wants to buy a pint not a 1/2 litre of beer.

          If you’re trying to sell something you better make sure the customer knows whats being sold as in this case most did not and it came back and bit the Tories in the rear.

  • Span Ows

    “…and this is what journalists do when they encounter a fib. They tend to challenge and confront it, and the row about the fib ends up becoming the story.”

    Now you’re just having a laugh. I’ll fix it: “..and this is what journalists do when they encounter a statement that isn’t as gross as their own. They tend to exaggerate and extrapolate it, and the row about the grossly distorted original statement ends up becoming the story.”

  • Span Ows

    ‘porkie’ = pork pie = lie

    you’re trying to downgrade to ‘misleading’ etc because you know it isn’t a lie, calling it a porkie then putting an incorrect description of a porkie is…misleading.

    • Alexsandr

      Saying something that is untrue is a lie or a porkie. You can lie by ommission. Thus was a silly error that should have been avoided by stating the method of calculation.

      • Span Ows

        fair and correct point: I’m always banging on about the BBC lying by omission so I guess this is too.

  • Shinsei1967

    The reason this has “backfired” is entirely due to you Fraser. The media love a story about dissension with a party’s ranks and you & the Spectator are regarded as being Tory supporters. Thus Osborne’s enemies spent the whole of yesterday publicizing what they regarded as your attack on Osborne’s and the Tory’s economic competence.

    And to what end ? As many said yesterday the standard measure of a deficit is as a percentage of GDP. Everybody who has spent any time working in financial circles, in the City or academia, knows this. It is quite clearly not a “lie” or even a “porkie” to claim that the deficit has halved.

    • ohforheavensake

      Except that it hasn’t, so it is.

      • Shinsei1967

        Deficit was 10.2% of GDP in 2009/2010 and will be 5.0% of GDP in 2014/15 according to the OBR figures.

        The OBR themselves talk of halving the deficit.

        • southerner

          Reference for that please? And don’t leave out the bit where they start with “relative to GDP”.

        • Alexsandr

          But the man in the street doesnt. All it needed on the poster eas an asterisks by the claim and a footenote saying ‘as a percentage of GDP’ The failure to see this row coming shows poor political judgement. And I thought Osbourne was supposed to be a good politicuan. Hmmm

          • Shinsei1967

            But that is pretty pedantic demanding footnotes to posters. How big would the footnotes have to be to fit in exactly how a “business” is defined.

            And then you’d need footnotes to explain exactly what time period you are referring to. Since the election day (6th May) or since the end of the first quarter of 2010 (31st March).

            And then if you refer to X number of new jobs would you demand footnotes explaining how many are full time, how many part time and how many on zero hours contracts.

            Deficits as a percentage of GDP are a standard way of referring to deficits (read the business pages of any newspaper) so making a claim based on that doesn’t demand a footnote.

            • Will Richardson

              Still missed their targets didn’t they? Austerity never works especially in a global depression, it kills needlessly except to enrich the few rich at everyone else’s expense

            • Mynydd

              If percentage of GPD is the standard way of referring to deficits, why does the government publish the deficit as £xxbn each month? They don’t even say, please read the business pages of any newspaper to see the deficit as a percentage of GDP. By the way does any newspaper include the SUN.

            • Pacificweather

              Footnotes are indeed unnecessary because the words are running through your mind as you read the poster providing a negative effect not a a positive one. To condense is to deceive and so the only message the reader perceives is deception. Better to say nothing.

        • Will Richardson

          They claimed they end surplus public spending by the end of parliament… Never mind that this reduces private saving out of income pound for pound.

    • Mynydd

      When I borrow £200, I say borrowed £200, I don’t say I borrowed half my wages.

      • Shinsei1967

        When you take out a mortgage it is based on a multiple of your earnings though.

        And I can assure you than when you negotiate a £10,000 car loan or similar from a bank they will look at the sum as a percentage of your income (even if you don’t).

        The Maastrich criteria for entering the Euro is set at meeting a 3% budget deficit target.

        Ask an economic historian what the UK deficit was during the war years and I doubt they have a clue whether it was £1bn or £3bn or £5bn, but they would know that it peaked at about 40-50% of GDP in 1944/45.

        Ask a Japanese economist what the Japanese budget deficit is and they’d get confused with dealing with so many zeros but they’d know it in percentage terms.

        That’s just the way people who deal with deficits professionally talk of deficits in everyday use.

        • ButcombeMan

          You are technically correct and plainly wasting your time.

          Fraser had his moment in the sun but to what end?

          His minor point was only worth a minor mention by way of explanation.

          The phrasing of the poster is though, a needless own goal, I agree with Fraser on that at least, because it gave Labour a toolkit to attack Osborne. It will keep being repeated.

          Lynton Crosby is not worth whatever he is being paid if he approved the poster. His methods will not stand up to the scrutiny that comes with web chatter.

        • Will Richardson

          Householfs borrow far more in ratio to income than our monetarily sovereign government so do non financial businesses. Banks even more so.

          • Mike

            I haven’t borrowed a penny in 15 years since I retired and I have a surplus not a deficit. Even when buying a house, the value of that asset was always more than the debt on it and I ran a surplus every year.

            • Will Richardson

              Good for you, beware the ad hominem argument though!

              For individuals to save, the government and rest of the world must run surplus spending aka deficits. Given that world income flows net to zero, that leaves government as the source of funds to save or surplus spender of last resort. The relatively rich/secure can and will save/overinflate asset markets, shares, housing. The many rest of us struggle given the uneven playing field and hand we were dealt with due to increasing wealth inequalities. Those that are born into and inherit wealth have a vast head start, before we even look at education and old white boy (treble sic) networks.

        • Aberrant_Apostrophe

          So if your income goes up after you take out a loan, your repayments increase accordingly? Er, I don’t think so.

          • Mike

            But your deficit ratio improves as your personal GDP has risen.

        • Mynydd

          Just after borrowing £200, half my wages, I had a pay rise such that the £200 became a quarter of my wages. Does this mean I now only have to pay back £100 or is it still £200. You see we can play with numbers all day until they become meaningless. What if Mr Cameron/Osborne said we have cut the deficit to 1000 roubles, would you believe them? It is beholden on the government to say what it means , or mean what it says. At the 2010 budget Mr Cameron/Osborne said they would balance the books during the life of the parliament, that is in cash terms. As a result each month the deficit is announced to the general public in cash terms which is understood by all, not as a percentage of GDP. No matter how you spin Maastrich, (we are not entering the Euro Mr Blair/Brown stopped that) war time deficits, Japanese deficit, who professionals talk, the poster means in cash terms. Mr Cameron’s poster is a not only a lie but a deliberate one at that. The problem for Mr Cameron/Osborne they no longer know when they are telling a ‘porkie’

        • paulus

          Your right it can only be calculated as a %, actually figures can lose meaning very quickly.

        • Mike

          But that mortgage ratio certainly isn’t based on your personal GDP in any sense, its based on your salary, pure and simple.

          I could argue with the bank that my personal GDP will rise if he gives me a loan to spend next week and therefore my deficit ratio will fall reducing the risk of default. I don’t think that will fly though !

      • Bill Kruse

        What if you borrowed when you had no need to? Remember, the money we’re borrowing has been itself created out of nowhere by a bank. That’s what it is, that’s where it comes from. Why do this when we have a central bank ourself which can create money for nothing and loan it at cheap rates into the economy? Why aren’t we seeing a range of public banks filling the gaps left by the high street bank closures in peripheral communities? People’s thinking has to change about money, it’s not what they’ve been led to believe it is.

        • Will Richardson

          A banks job is to lend to creditworthy borrowers.

          When there’s a debt deflationary demand shortage, they’ll lend less.

          Similarly businesses expand employment and employment when demand rises.

          • Bill Kruse

            Sigh… what if you borrowed when you had no need to? Remember, the money we’re
            borrowing has been itself created out of nowhere by a bank. That’s what
            it is, that’s where it comes from. Why do this when we have a central
            bank ourself which can create money for nothing and loan it at cheap
            rates into the economy? Why aren’t we seeing a range of public banks
            filling the gaps left by the high street bank closures in peripheral
            communities? People’s thinking has to change about money, it’s not what
            they’ve been led to believe it is.

            • Will Richardson

              Sure, we could all have bank accounts at the UK Central Bank, cutting out the parasitic middle men forcing them to have to really compete for our money. Banking is a public utility and as the private sector is too weak and withdraws local post office banking can/should fill the gaping gaps in provision. (We could have public utility centres/pubs/libraries/broadband connection). Trond Andersen has an interesting take on this or Bill Mitchell.

    • Blindsideflanker

      So the person attempting the deception is not the issue, but the person reporting it is.

      • Shinsei1967

        You clearly don’t understand my point, it isn’t a deception. So the issue is why Fraser is making such a fuss. He has been making similar points about the deficit/debt being referred to in GDP terms and not in nominal figures for years now and every time gets corrected by people working in financial circles.

        • Alexsandr

          But the poster is not aimed at professionals. Its aimed at the man in the street who thinks of defecit in terms of £ bn. So it was either careless or misleading.

          • Shinsei1967

            But the man in the street has no trouble with dealing with the BBC News saying that the UK has the biggest deficit in the the G7. He is well aware that this is as a percentage of GDP. The Japanese deficit is clearly bigger in nominal terms but as its economy is so much bigger it is relatively smaller in relation to its GDP.

            • Aberrant_Apostrophe

              That would be the Bbc – and others – who for years have described percentage changes as ‘so many pence in the Pound’, which speaks volumes about their respect for the Public’s educational abilities.

            • Mynydd

              So what as the Japanese got to do with Mr Cameron’s poster, did they tell him what words to use?

            • Mike

              Until this was flagged by Fraser I certainly wasn’t that au fait with the nuances of reporting deficit but I certainly am now.

              Thanks Georgie boy, I’ve learned quite a lot about deficits, government borrowing and such since your deception was highlighted and I’ll be on my guard a lot more in the future regarding government figures and statements.

            • Pacificweather

              Could that be because the BBC statement is simple and true and the poster statement is either simple and untrue or complex and almost true.

        • Blindsideflanker

          When people are barely able to tell the difference between budget deficit and national debt, it most definitely is an attempted deception when they shift the goal posts from cash to ratio without bothering to point out the change in terms.

          But what is more gob-smacking is the obscene stupid arrogance of the Cameron Osborne Tory party, who attempt the deception on the public even when, in political and media circles, it had already been exposed.

          What did they think was going to happen when they stuck up a billboard with the deception ?

          • Shinsei1967

            But they haven’t changed the goalposts from cash to ratio. When Osborne last referred to the deficit as being down by a third at the autumn statement that was also as a ratio. The OBR has subsequently released their forecasts for the full 2014/15 fiscal year and the deficit has now fallen by a half.

            • Blindsideflanker

              Not to my recollection .

              But the Cameron Conservative party, led by a PR man, seems to be clueless about public relations.

              All they had to do was be honest about it, for in pointing out they had cut the deficit in cash terms by a third, but because the national wealth has increased , as a result of their good management of the economy ( if they want to add that spin) the budget deficit had deceased as a percentage of the economy by one half, in so doing giving people a hope that the worst of the cuts could be avoided if they keep a government in power that is committed to growth.

              • Shinsei1967

                But this is a political poster of three word sound bites.

                “Halved the deficit”

                You can’t have posters with slogans saying:

                “We have cut the deficit by a third in cash terms, and due to the increase in the size of the overall economy due to the success of our long term economic plan this has meant that it has also fallen by a half in GDP terms.”

                Are you going to start objecting to the famous “Labour isn’t working” poster and demand that it has footnotes stating that: “this is meant as a play on words as to the Labour government’s incompetence and to the 1 million unemployed but that it clearly excludes the 16 million that are happily working”.

                • Blindsideflanker

                  Don’t ask me to fill in the words for a stupid poster of their choosing.

                • Mynydd

                  You can’t have posters that are out to deceive. Every blade of grass, every stone on the road, every word would have been checked and double checked to insure the correct impact on the general public. Mr Cameron knew exactly what ‘halved the deficit’ means to the man in the street, that is why those words we used. One should note that during Mr Cameron’s launch of the poster he said ‘halved the deficit as a percentage of GDP’ So why the qualification at the launch and not on the poster, was it because the media were present rather than just the man in the street.?

                • Pacificweather

                  Which is exactly why the poster should not have been created. It was always destined to become the story because if you cannot state a complex truth then anything else is perceived as a lie.

            • Mike

              Cameron said they had reduced the deficit by 33% and then 20 minutes later, Osborne claimed it was 50% down. They must have some real magicians at the treasury to accomplish that.

        • monty61

          It **is** deception – it’s hiding behing the small print. Don’t you CCHQ lackeys know when you lost the argument?

          • Shinsei1967

            I am merely being accurate and consistent. As I have pointed out economists such as Jonathan Portes, who is vehemently opposed to Osborne’s economics, agrees with Osborne’s use of a GDP-relative deficit measure.

            Face it, Fraser and you are simply wrong on this.

            And I have no connection with the Tory party, merely a desire to see economics reported correctly.

        • Chingford Man

          It’s clearly meant to deceive the general public to cover up the fact that the Tories have put our national debt up to an unsustainable level.

          • Shinsei1967

            That’s a separate argument and I’m sure you are right. As I tweeted to Fraser yesterday that is what he should be writing about and not this pedantic spat over the most appropriate measure of the deficit.

            I happen to believe the national debt is sustainable (as do the bond markets otherwise gilt yields wouldn’t be as low as they currently are) but there is certainly a debate to be had about the most appropriate level of government borrowing.

            • Mynydd

              If you believe the national debt is sustainable then you would support Mr Miliband/Balls if they were committed to increase government borrowing by a reasonable amount for capital projects

              • ButcombeMan

                I do not believe the markets will take a benign view of Labour coming to power, especially not with Balls anywhere near the Treasury.

                All the evidence is, that the British people take a view that the Conservatives are more likely to be economically competent, the markets will, I believe, take the same sensible view.

                A Labour government will not be trusted on the economy.

                • Pacificweather

                  The markets took a benign view of Ed Ball’s mentor. If the economy and tax take grow under Labour then they will be satisfied. By only meeting Labour’s target the Tories have lost their trusted on the economy status. It now comes back to the old question of do I feel rich enough to vote Tory and where do I live. There is a good chance we will get our second democratically elected government since WW2.

                • ButcombeMan

                  Times have changed. The Big Brown Mess, like Iraq is too fresh in the memory among those who will have to make judgements and turn out to vote.
                  Balls has been wrong in all his economic pronouncements, he has zero credibility, for that reason Red Ed did not really want him as Shadow Chancellor. Probably only Mrs Balls takes him seriously.
                  His latest crackpot wheeze is means testing for WFA. He has a lack of common sense.

                • Pacificweather

                  I don’t think she does. She knows she has more chance of being the next leader than he does.

            • ButcombeMan

              I agree with you about the bond markets suggesting the national debt being sustainable but that may only be to some extent by comparison with the other options? That will change if Labour get into power.

              I am concerned about the high level of personal debt

              I am concerned about the lack of preparedness for a long old age that many people have.

              The UK needs to save more and spend less,

        • Mike

          But the vast majority of us do not work in the finance sector, thats the point.

    • WatTylersGhost

      So Shinsei, if I borrow a sum of half my salary, say £30k from the bank, and I agree to pay pack a sum of half my salary in 12 months time.
      One year later I am unemployed, I say to the bank “my salary is now zero, so I shall pay you back half of zero”.
      Is everyone happy?
      I think not.

      • Shinsei1967

        We’re just talking about how a deficit is measured, nothing to do with its sustainability or whether anyone is happy.

        In your example your personal budget deficit has gone from 50% to effectively infinity (assuming your income is actually zero).

        Your nominal debt remains the same but your ability to fund it has changed considerably. That’s why looking at the debt/deficit in relation to the economic entity that supports it (in this case you) is so meaningful.

        Being told that a Country X has a deficit of £50bn is meaningless. If Country X is the USA it is a piddling amount not worth worrying about, if Country X is Albania it is a vast sum that will almost certainly lead to bankruptcy.

        • Mynydd

          We are all agreed that there are two ways to define a deficit;

          1) in monetary terms £xxbn

          2) as a percentage of GDP

          When comparing country with country than percentage of GDP would be a better method but we are not. Here its about the Conservative party’s poster and its meaning. The government as told us, what a deficit of £xxbn means for the UK. For years Mr Cameron/Osborne as expressed it in monetary terms and added if we continue with Labour’s level of deficit, what was it £135bn or there about, it would lead to bankruptcy.

          • Will Richardson

            Data without context is meaningless, that’s why it’s more honest and useful to talk about government or far larger debt, particularly bank debt, relative to income.

            Record employment is disingenuous compared to growing population, let alone the fact that 98% of employment growth is part time short term, zero hours insecure.

            • Bill Kruse

              Or completely phony. Vast anecdotal evidence suggests Duncan-Smith’s DWP and WPP are ‘encouraging’ claimants, through endless harassment, into signing off from politically embarrassing JSA and onto self-employment where they get hassle-free WTC. There’s your jobs miracle. Fiction. One assumes Labour are going to carry on with this as they aren’t making any apparent effort to expose it.

        • Mike

          Its also meaningless talking about deficit vs GDP unless you factor in pay back in 10, 15 or 20 years. The spend from borrowing which raises GDP does not factor into that years figures, debt pay back due in many years in the future. A bit like Gordon Browns PFI deals in the NHS.

        • Pacificweather

          We are just talking about how the deficit is measured….

          That’s the problem. It’s become the story. Only meeting the opposition’s target is a political plane crash. Airlines say that when your plane crashes cut the advertising budget to zero. The Tories need to learn this lesson.

    • Mike

      Everybody who has spent any time working in financial circles — whats that then 0.1% of the population who discuss national deficit vs GDP when the poster was targeting 98% of the population. That makes a lot of sense !

  • pobinr

    Look at the road ahead in that Tory poster. Those lovely green fields won’t be there much longer. They’ll all be built on for immigrants thanks to the Tory Party that loves the EU.

    In fact they helped open our borders up to millions more poor people. Vote Tory get Communist >

    • In2minds

      We need immigrants to build HS2!

      • Blindsideflanker

        To have the capacity to move more immigrants around the country.

    • ohforheavensake

      And this is nonsense.

    • telemachus

      Clearly what you mean to say is that Fraser should not waste time attacking the Tories
      But stick the boot into UKIP
      As he says we are in an election year
      In election years the truth is less important than winning
      And crushing the opposition
      To win is all

    • Mark Worgan

      If they are it’ll be immigrants to Germany, as the road in question is in Weimar.