Thursday, June 16, 2011

Was public debt really lower in 2008 than in 1997?

Ed Balls keeps banging away that the national debt was smaller before the crisis than they inherited from the Conservatives. The other day Labour List used this graph to illustrate his point.

Damning stuff, except it's two data points, let's look at the whole picture from 1999 to present courtesy of the ONS (It's the graph on the right we're interested in).

So what does this show, it shows that from when they took over and whilst they were following Conservative spending plans, national debt as a percentage of GDP did indeed fall, (aided as well by the sale of 3G mobile phone licences for £22.37bn in 2000, which as Ed Balls said this morning went towards paying off national debt.), but as soon as Labour economic policies kicked in we saw an upward trajectory. By 2008 we were already running a significant structural deficit, then we had the crisis which was an excuse for opening the spending taps even more. 

What's important to remember is that this graph excludes interventions in the banking sector, so the debt didn't go up in 2008 because we bailed out the banks, as the language Balls uses always implies. Trust me you don't even want to see that graph, in April 2011 debt including interventions was 148.9% of GDP.

So next time someone tells you that the debt was lower in 2008 than in 1997, ask them if they know what it was in 2002.

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Wednesday, June 15, 2011

The truth about ESA and cancer patients

At PMQs today Ed Milliband used all of his questions on a technicality of the Welfare reform bill, basically justifying his opposition to welfare reform. He used a press release from earlier this week from Macmillan Cancer care which states that 3,000 (or 7,000 depending on who wrote it up) cancer patients faced the removal of up to £94 a week's Employment Support Allowance.

As far as I can see it the reality is this.

Claimants for ESA are divided into two groups:
1) those undergoing treatment (the support group);
2) Those deemed able to perform "work-related activities"

For those in the support group there is no time limit for their claims for ESA. If you are a cancer patient undergoing treatment for 2 years, 3 years, or 5 years  then it appears that you are entitled to ESA.

However if you're in the second group and your treatment has ended and you have been assessed (by a medical test) as being able to perform work related activities, to help you to return to full work, then you face means testing of your work related activities ESA after having received it for 12 months. This means that if you have savings over £16,000 or you have a partners with either works more than 24 hours or earns more than £149 a week that you would lose the entirety of your ESA, otherwise you would lose either a portion of it, or nothing at all.

So will cancer "patients" be worse off by £94 a week? I guess it depends what you call a patient.

Update: I also understand that the government ammended the Bill to ensure that individuals awaiting or between courses of chemotherapy will automatically be placed in the support group and retain their indefinite ESA.

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Wednesday, June 8, 2011

Is it Christmas already?

Ed Balls latest campaign "Britain's Lost Talent" has been launched on Labour's Campaign Engine Room site. It's a blatant attempt to cash in on the success and media interest of Britain's Got Talent, (something that has failed miserably) and even has a showbiz style logo.

Unfortunately someone in the Labour Party's graphic design department seems to think that snowflakes are the same as stars.

Or is it just so bad there are the moment that they're wishing it was Christmas already?

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Tuesday, June 7, 2011

Exchange of the Day

From last night's NewsNight

Ed Balls: The IMF have consistently backed George Osborne – they still are – but I have to say in the face of the evidence of the last few months.

Jeremy Paxman: So are you saying that 1,200 economists at the IMF are wrong and you, Ed Balls, are right?

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Wednesday, June 1, 2011

Words of Wisdom from Gordon Brown

I'm doing some research and came across this gem from Gordon Brown's 1999 Pre-budget report

"The economy of 1997 was characterised by rising inflationary pressures; unsustainable consumer spending; a large structural deficit in the public finances with public sector borrowing of 28 billion pounds; indeed, Madam Speaker, Britain was set to repeat the same old cycle of boom and bust."

So in 1999, Gordon Brown claimed he was worried about an economy that was borrowing £28bn pounds a year, even adjusting for inflation since then you'd be talking about roughly £40bn a year. Today we have to borrow that in just over 3 and a half months, yet as he was leaving government he didn't seem at all concerned about it.

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