Tories: little difference in ours & Labour’s plans
I pointed over the weekend that the Tories are increasingly sending out conflicting messages on whether their drastic action saved the economy, or whether Osborne’s cuts are similar to Labour’s plans.
More evidence of this comes today.
In reponse to Osborne’s IMF interview this morning, Fraser Nelson at the Spectator says:
Departmental spending is set in stone… So in total: cuts of 3.7% spread over four years. The government’s refusal to mention this figure has allowed Labour to make out that the cuts are deep and fast when in fact they average less than 1 per cent a year.
As Ben Chu at the Indy points out, the comparison is apples and oranges. Individual department budgets are still being cut massively.
But its interesting how Tories are trying to play down differences between ‘Plan A’ and ‘Plan B’.
This is especially relevant since the IMF broadly came out for Osborne’s path of spending cuts. But buried further down the report was this huge caveat:
9. Risks and uncertainty around this central scenario are significant.
Large risks to growth and inflation arise from uncertainties surrounding euro-area sovereign turmoil, the housing market, the size of the output gap, and commodity prices. Indeed, unexpected spikes in commodity prices were a significant factor behind revisions to our 2011 inflation and growth forecasts since the 2010 Article IV consultation.Another risk is uncertainty surrounding the size of fiscal multipliers and the degree to which private demand and net exports will be vibrant enough to pick up the slack from fiscal consolidation. Uncertainties arising from key risks are further compounded by the unusually large disconnect between recent weak GDP outturns and other indicators that are stronger (e.g., rising employment, higher-than-forecast tax revenue, and stronger private sector surveys), making it all the more difficult to ascertain the economy’s near-term direction.
That even the IMF admits the risks are “large” here is quite important. Indeed, its had to reduce its own predictions for UK growth significantly.
But if Osborne is going to claim credit for his plans, can he at least tell us whether it’s significantly different from Labour’s plans?
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Sunny Hundal is editor of LC. Also: on Twitter, at Pickled Politics and Guardian CIF.
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Reader comments
Where is Balls?
When he was made SCOTE, there was a general breathless consensus here that he would wipe the floor with Osborne, something which he has manifestly failed to do.
In fact, the Cooper-Balls axis has been notably invisible. Not surprisingly, why would Balls want to go in to bat for an argument he believes Labour have already lost?
When Balls is choosing to hold his tongue, I suspect that means bad news for somebody. And that “somebody” is not George Osborne.
I do hope EdM’s got somebody watching his back.
Hah! That’s a funny try MC, but Ed Balls was in the New of the World yesterday and all over the media, including the morning Murnaghan show on Sky.
Ed Balls is everywhere, you can’t be listening to the radio or reading the papers or watching the box much if you don’t see that.
By the way Sunny, you’re missing an apostrophe in “whether its significantly”.
You can’t have it both ways Sunny;
On one hand you are busy trying to say that all cuts are bsically unnecessary, and the Coalition are cutting too fast….
…yet on the other hand you are now criticising them for their cuts being essentially the same as, if only marginally faster than Labour’s/Darlings plans.
I know you are really nothing but a Labour mouthpiece/attack dog/spiv but it does make you look a little on the hypocritical side.
Tyler, a bit of reading comprehension wouldn’t go amiss.
I’m pointing out that the difference between the plans ARE in fact large. Hence why I link to Ben Chu’s blogpost who shows this. I’m merely asking Tories why they’re contradicting themselves.
Comprende?
I’m merely asking Tories why they’re contradicting themselves.
I don’t think they are. You’re conflating a couple of different arguments. The first is that, in the international context, total spending cuts are in the mainstream. A 3.5-4% reduction, while tight, is not out of the ordinary. The US is cutting more, faster for example.
The next point is that the difference in topline figures between Labour and the Govt is not all that substantial – something like £20-40bn (in the context of total spending of c.£650bn).
(Ben Chu, incidentally, doesn’t mention this at all. He’s pointing out that various factors (protection of health spending and dramatic increases in debt financing) mean that total spending cuts of 4% will lead to departmental cuts of, on average 11%. If you take out health and ID you get an average cut of 19%. This latter average would only have been less under Labour because they were pledged to cut NHS spending.)
But although topline figures are similar, we were never told in any detail how Labour would implement the cuts. So Labour’s plans can be simultaneously not all that far away from the Tories and also completely useless and irresponsible without there being any significant contradiction.
@5 Sunny
Think Tim J @6 pretty much puts you right, but jsut to reiterate;
The Tory and Labour plans are very similar (20bn difference over 4 years is about 0.3% of GDP/annum).
The cutting plans are not even especially fast, compared with our economic peers.
Given the above, you are more than a little hypocritical for firstly attacking the Tory plans for cutting at all, as you (and others) have done repeatedly on this blog, but then turn around and then attacking Tory plans for not cutting fast enough! You can’t have it both ways.
Up to only a few days ago, we were being regularly told that there is “no alternative” to Osborne’s fiscal prescriptions set out in his budgets last June and March this year.
This Monday morning, in his BBC Today interview, Osborne was stressing how “flexible” his plan is:
http://news.bbc.co.uk/today/hi/today/newsid_9505000/9505478.stm
The rhetoric has certainly changed.
@5 Sunny
“I’m pointing out that the difference between the plans ARE in fact large. Hence why I link to Ben Chu’s blogpost who shows this”
I looked at the link and could not find any evidence in there that there are differences between the Tories and Labour. All the blog did was to highlight that some departments had significant cuts even if over all the cuts are only 3.7% over four years. No mention of Labour policy on cuts.
I am a tad confused, as I am always when it comes to economic arguments, thats why I tend to stay out of them. What I am curious to know is, do you think these cuts would be the same if the tories had achieved a majority? Dont care who answers this question it just would like to know?
What I am curious to know is, do you think these cuts would be the same if the tories had achieved a majority? Dont care who answers this question it just would like to know?
The same in size, possibly different in distribution.
Reactions: Twitter, blogs
- Liberal Conspiracy
New tory message: "There's little difference between Osborne and Balls' plans on economy" http://bit.ly/ld4JtV
- Mabel Horrocks
New tory message: "There's little difference between Osborne and Balls' plans on economy" http://bit.ly/ld4JtV
- sunny hundal
New Tory message on economy continues to claim there's little difference between Osborne and Balls' plans: http://bit.ly/ld4JtV
- sunny hundal
@DPJHodges to make it easier for you, I've highlighted the relevant bits here http://bit.ly/ld4JtV
- sunny hundal
Are Tories confused on whether there's a big difference between Osborne's and Balls' plans, huh @ToryPressHQ? http://bit.ly/ld4JtV
- This slowdown is entirely of Osborne’s making | Liberal Conspiracy
[...] at 8:59 am George Osborne may have been gloating yesterday after the IMF’s full-throated (but worried) endorsement, but he should wipe that smile off his face. The BBC reports today: Retail sales [...]
- Anfortas_Fisher
Tories: little difference in ours & Labour’s plans | Liberal Conspiracy http://t.co/UbX8eSko via @libcon
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