A case of lies, damn lies and our rocketing national debt
GO on, take the quiz. You know you can’t wait, so here goes. Which of these statements do you believe to be most accurate: a) the coalition is planning to cut the national debt by £600bn between 2010 and 2015; b) it is planning neither to reduce or decrease it; or c) the coalition is planning to increase the national debt by around £600bn. The obvious, undeniable answer, as readers of this fine newspaper will all know, is c).
Yet when ITV asked ComRes to poll the general public ahead of today’s Autumn Statement, it discovered that just six per cent got it right. An appalling 49 per cent thought the answer was a), that the coalition is slashing the national debt; 14 per cent thought it would keep it the same; and 31 per cent said they didn’t know, ITV revealed last night. Partly because of over-simplification or misleading statements by politicians, and in some cases sloppy reporting by the media, voters are confusing the budget deficit – the increase in debt – and the national debt – the total stock of debt. This means that hardly anybody is even close to understanding the coalition’s policies, making a mockery of the entire political “debate”.
These same questions were first asked at the beginning of the year by ComRes, last time on behalf of the Centre for Policy Studies. Depressingly, the public’s economic literacy and understanding of what is actually going on has actually deteriorated. At the time, 10 per cent got the answer right; this time it just six per cent.
It gets worse (yes, I know, it’s hard to see how). Yesterday’s ITV poll also showed that just 21 per cent of the public thinks that the chancellor’s economic plan is right for the country, with 45 per cent disagreeing and 34 per cent unable to express a view. The sceptics may have a point, of course, but given that just six per cent actually understand Osborne’s plan’s key element, how can anybody be possibly expressing an informed view? More people believe that Elvis is alive than understand what is happening to the national debt.
As ever, the battle is in the details – and that is where politicians of all parties will have a huge advantage today, as they will be able to bamboozle the public with meaningless statistics, numbers taken out of context and fake outrage. Take the news yesterday about the government’s decision to very slightly increase capital spending and slightly cut current expenditure. For all the rage, Labour and the coalition have almost identical policies on capital expenditure. As Andrew Lilico of Europe Economics reminds us, Alistair Darling, when he was Labour chancellor, unveiled his own austerity Budget in March 2010, prior to the general election. Under his plan, public sector capital expenditure would have collapsed from 3.6 per cent of GDP in 2009-10 to 2.7 per cent in 2010-11, 1.9 per cent in 2011-12, 1.6 per cent in 2012-13, 1.3 per cent in 2013-14 and 1.3 per cent in 2014-15. Under Osborne, adjusting for the £28bn reduction in public sector net investment caused by the Royal Mail pensions assets transfer, the Tory plans have seen state capex drop to 2.6 per cent in 2010-11, 1.8 per cent in 2011-12, 1.6 per cent in 2012-13, 1.4 per cent in 2013-14 and 1.3 per cent on 2014-15. The difference between the capex cuts plans is trivial – something worth reminding next time you hear Ed Balls screaming blue murder.
So what should you look out for today? There will be tax hikes, growth downgrades, debt and deficit upgrades, dodgy fiscal rule-bending and lots of gimmicks. As ever, keep a close eye on the actual figures, rather than the spin: it’s a case of lies, damn lies and statistics.
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