Monday, 27 April 2015

12 Myths We Need To Call Bullshit On

There have been some massive porkies flying around recently, so let's set the record straight...

1. Labour did not create the national debt through public spending

Total public spending was 39.9% of national income when Labour came to power in 1997. They swiftly reduced this figure to 36.3% by 2000. It then grew, which was largely inevitable because of the growing and ageing population - but only to 41.1% by 2007. So after that decade of Labour tax and spend - total public spending had gone up by just 1.2% of national income.

It was actually the crash that caused public spending to boom - not Labour policy. The crash and bailout increased the deficit to £158bn, and made public spending skyrocket up to 48.1% of GDP.

39.9% in 1997. 41.1% a decade later. Then, after the bailout, up to 48.1%. 

It's wasn't by paying for benefits and nurses that we got such a national debt.

2. The last Labour government did not ruin the economy

In 2009-2010, the economy swiftly recovered from the 2008 crash. In Labour's last year in power, GDP grew by 2%. This was because of Labour's VAT cut - which the IFS says had a "substantive" effect on causing recovery, and Labour’s 2009 bailout, which was praised by economists as having "defined the worldwide rescue effort".

After the 2008 crash, GDP growth steadily recovers under Labour, until the Tories take power and growth falters

3. Cameron's government did not "save the economy"

The Conservatives strangled this recovery as soon as they came to power. They announced "tough" cuts and a VAT increase and then - sure enough GDP growth suddenly halved, then fell to zero. By 2012, the economy was shrinking again during some quarters and, in 2013, the UK lost its AAA credit rating. In this quarter we just left - some 7 years since the crash - growth has again dropped to 0.3%. That's lower than when the Tories took power.

"The "measures David Cameron has put in place to... build a stronger, healthier economy" ensured that the steady growth stopped soon after they came to power, and the economy shrunk by 2012


4. The UK did not need Osborne’s cuts in 2010

The IMF and the OECD both said the UK economy was too weak for spending cuts in 2010-2011. Oliver Blanchard, of the IMF - said cutbacks were "playing with fire". Osborne announced £81bn of cuts anyway, and the recovery stopped. Maybe the IMF and OECD were correct..? 

5. You do not always have to cut spending in order to reduce national debt

The way out of a recession - and to rebalance the budget - is not necessarily to make cuts. You can spend a lot of money, and still reduce the debt as a percentage of GDP. Clement Atlee's government, while spending millions on an NHS and welfare state, reduced national debt by 40% of GDP.

Attlee, Clement

6. The UK did not need a VAT increase in 2010

As mentioned, when Brown reduced  VAT, this was proven to help recovery. However, Osborne increased VAT to 20%. Little wonder the recovery was stopped in its tracks.

7. Osborne has not 'got borrowing under control'.

Osborne borrowed more in 5 years than Labour borrowed in 13 years. He has borrowed £219bn more than he said he would. 

All this is partly because...

8. Osborne has increased spending 

Osborne pretends he has squeezed spending, and claims this is why we recovered. In reality, we haven't recovered all that well. And if we have survived, it's because - thank god - he has not been able to decrease spending too much. After his initial devastating attempt to cut in 2010, Osborne U-turned, and has increased spending every year, from 693bn up to £702bn, then £714bn, £722bn and £731bn this year. For comparison, Brown's public spending in 2009 was 635bn - which would be just 704bn in today's money, according to some estimates. So Osborne has increased real-terms public spending by 27bn. This is inevitable, because of the growing and ageing population. The difference is: Osborne has just made sure some people face cuts.

9.  The Tories have not done all they can to balance the budget

False. By giving away tax cuts, the Tories had lost out on £24bn by just 2013. This is 48 times the amount of money they gained by introducing the bedroom tax. Giving away tax gifts has cost the Treasury dear.

It’s no surprise then, that…

10. Osborne has increased the national debt

We all know the Coalition has made savage cuts. But they only did that so they could decrease the national debt, right? Wrong. Osborne has increased national debt by 26.1% of GDP.  National debt is now rising at £3000 per second.
As we all know, the last Labour government were a bunch of profligate maniacs, who got a disgusting sexual thrill from borrowing money, and ruined the economy in an orgy of irresponsible idiocy. However, they only increased the national debt by 11% of GDP – and that was largely because they had to bail out the banks. Osborne has managed to increase national debt by more than twice that.

11. Scottish people have the same political rights as English people – and slightly more than animals!

Despite what you might hear, Scottish people have exactly the same political rights as other people - and even more than most breeds of cow! If Scottish people want to vote for a certain party - such as the SNP - then they are allowed to. If that party ends up having a lot of MPs, and forming a coalition government with another party - that is allowed too. This would be just as legitimate as when English people voted Lib-Dem, and then the Lib-Dems formed a coalition.

DANGEROUS: But Allowed to Vote, and have a say in the running of the UK.


12. The SNP could not "hold Labour to ransom” 

Ed Miliband has ruled out a formal coalition with the SNP ages ago, and has now also ruled out a looser "confidence and supply" deal with them. So there will be no "coalition of chaos". The SNP will have have less influence over a Labour government than the Lib-Dems currently have over the Tory government - and we all know that's not a load of leverage.

In parliament, though, Labour would need extra votes on top of its 270-odd MPs. The 54 SNP MPs would probably provide these, because they agree with Labour's ideas. Both want to address inequality quickly (Miliband's got the ban on non-doms and the bankers' bonus tax; Sturgeon recently scrapped the SNP's commitment to lowering corporation tax). Both parties agree with each other - so the SNP do not need to hold Labour to ransom: Labour already have a similar ethos.

Most importantly, as Sturgeon says, "this election is about getting rid of the Tories". Her party want Miliband in power. So they would not, and could not, threaten Miliband. If he doesn't do what they want, what are they going to do? Walk away away and let him lose power? That would mean another Tory government. The SNP couldn't stand that. So they have to support Labour.


The new Conservative Party poster
"DO AS I COMMAND! Or else I will...I will...erm...I will put the Conservatives in power? Oh wait, hang on, that would make me physically sick."

The reality is very different to the story we're told. Labour spending on public services did not give us a national debt; their once-in-a-generation banks bailout did. And this policy, and Brown's other decisions, helped the country recover again by 2009-10. So no, Cameron, this is not your recovery. This recovery - if it exists at all - begun under Labour, and you promptly crushed it. 

Osborne made cuts for the poorest, while making tax cuts, increasing borrowing, and adding to the national debt. There has never been any plan to cut the debt, or be more 'careful' with finances. The Tories have never been the ones we should "trust" on the economy. They lie about what they are doing, and make hopeless mistakes. All because they seized, in 2010, an opportunity to stop helping ordinary people, and build a more unfair country - which they think we all need.

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