Dear Citizen,
We are being deceived. I do not say this lightly, because it's a harsh accusation to throw at the government which ran this country for the last thirteen years, but I am also not known for pulling my punches where politicians are concerned. Over those thirteen years of Labour government, we lived on an unsustainable platform which I'm going to show you in detail.
First, we should look at Labour's economic legacy, then we'll go onto failing public services, and finally we'll look at the cuts being imposed by the coalition and why they're having to be made.
A very common misconception is that deficit is the same as debt. This is not the case: deficit is the amount being spent on public services, minus the amount being brought in via the tax system; in other words, deficit is how much we are borrowing in a given year and how much we are adding to the debt.
Debt is just the lump sum of how much we owe.
Most people understand that Labour were running a structural deficit -- that is, a deficit which is sustained over a number of years; put simply, Labour showed no interest in getting the finances back under control -- but very few people realise just how high it was when they were put out of office, or just how badly it was spiralling out of control.
This graph, taken from the Coffee House, shows that the deficit has been structural since 2002/03. Even ignoring the bank bail outs, we can see that for seven years, Labour has shown little interest in addressing the problem. Spending has also grown at greater than the rate of inflation in each of these years:
Tony Blair's own take on the situation, from his memoirs:
"We should also accept that from 2005 onwards Labour was insufficiently vigorous in limiting or eliminating the potential structural deficit. The failure to embrace the Fundamental Savings Review of 2005-6 was, in retrospect, a much bigger error than I ever thought at the time."
Despite this, Ed Miliband still refuses to accept that Labour's spending was irresponsible. He continues to insist that the cuts are too harsh and too deep, yet offers no credible alternative.
Is the deficit the only negative effect of Labour's economic policy? Not at all, as the IFS noted (The Public Finances: 1997-2010, 19 April 2010, page 2):
"During Labour’s first four years in office, the public finances strengthened further, as the new government stuck to the tight public spending plans laid out by the Conservatives. The following seven years, however, were characterised by fiscal drift. By the eve of the financial crisis, this had left the UK with one of the largest structural budget deficits in the developed world"
Labour sold off our stocks of gold at a 20-year low, spent £3 billion a year on benefit overpayments (DWP, Fraud and error in the Benefit system: April 2008 to March 2009, 2009), and left us with a 10.5% of GDP budget deficit (OBS, Pre-Budget Forecast, June 2010): higher than Greece (9.3%), Portugal (8.5%), France (8%), Japan (6.7%), Italy (5.3%) and Germany (5%).
As Nick Clegg said on the British loan interest:
"This year we’ll be spending over £43bn just on the interest on our debts.
That’s £830m per week. Just under £119m a day. For that money, we could build a new primary school every hour. We could buy a new Chinook helicopter every day. We could take 11 million people out of paying income tax. We could triple the number of doctors in our hospitals."
Hopefully all people of a sane disposition will now be able to see just how important it is that we clear this debt, as it will lead to a better situation for Britain in the future: whether that comes in the form of tax cuts, of new doctors or of better schools (or a mix of many things), parties will be able to once again compete on the grounds of who can offer the most (responsibly this time, I hope) rather than who can take the least away.
But what it is that makes this borrowing so sinister is what has been done with it: Labour used this money to create jobs in the public sector. What's wrong with that, you might ask? Simple, Labour did this knowing that these jobs were created on an unsustainable foundation, and on the knowledge that the Conservatives would have to cut them upon coming into power.
Think about that another way: if I buy my son a 73 inch television on a credit line which I know that I can't keep to, then fail to keep paying for it, my son will probably think that the bank are big meanies for taking his TV away. What they won't realise is that it was my financial irresponsibility which has lead to the situation of the TV being removed.
Similarly, the people are busy blaming Cameron for the cuts whilst Labour ramp up their poll results, potentially meaning they can do it all over again. Their deceptive economic policy is quite possibly the biggest coup ever pulled off by a British government upon its people.
Just in case anyone didn't get that, let me lay it out simply:
- Labour borrowed billions of pounds and used these to create jobs which could not possibly be sustained
- Labour sustain these by borrowing even more money year on year
- When Labour leave power, these jobs have to be cut, causing a huge backlash against the new government
- This leaves Labour in a position to regain power through the people's misunderstanding of the situation
After all that, you'd've thought we don't need any more proof that Labour are willing to put their political ideology before people, but then we find out that councils (mostly Labour councils) are deliberately cutting front line services instead of middle managers, passing as much as possible of the cuts onto the people they are supposed to represent.
This is supposed to be the party which will "stand up for the people ... against the cuts", as Ed Miliband keeps telling us, so why are they the ones ripping libraries, free parking and NPO funding out, whilst maintaining their beaurocrats' salaries?
I can only think of two answers:
- Labour honestly believe that their middle management are worth more to people than front line staff OR;
- Labour are trying to make the cuts look worse than they are, and subjecting the people of their councils' jurisdiction to unnecessary hardship
Whichever of these is true, it's a pretty bad sign on Labour's judgement, or on Labour's honesty, but it's important to understand that cuts don't always represent a worse outcome. The easiest way to look at this is to see how much of a positive outcome Labour's spending increases have had in fields which mean a lot to us.
First, let's look to a sector which Labourites are very protective of: the National Health Service. We'll first explore Labour's spending in the NHS, then the performance gains achieved of those increases.
NHS expenditure increased from £41.3 billion in 1997 to £102.7 billion in 2010 (DoH Departmental Reports). This represents an increase of 95% in real-terms spending.
As you would expect from such a huge cash boost, this has achieved a better NHS overall than we had in 1997. We have better results on cancer & heart disease, shorter waiting lists and more availability of care out of hours than we did 14 years ago. However, this is only half of the picture.
It is common knowledge that scientific knowledge in healthcare has improved within that time, and we still lag behind Europe on cancer and heart (WHO Statistics) outcomes.
Civitas, in a very balanced piece advising the president of the USA, says that:
- "NHS productivity has fallen by 4 per cent over the last decade"
- "1,000 cancer patients were denied drugs that may be clinically effective"
- "Health inequalities have actually widened under the Labour government"
It also urged the USA not to look to the NHS, stressing that it is "neither deity nor dinosaur", better than the US system but not as good as the systems in Europe. All-in-all, we've pumped twice as much money in (in real terms) this year than we did in 1997, but we're still behind European countries.
Thirty charities, including The Alzheimer's Society, The Patients Association & Arthritis Care condemned Labour's record on supporting the most vulnerable, claiming that "Carers, those nearing the end of their lives and children have all been let down" on Labour promises.
But despite all of those points, the Labour supporters keep on claiming that their party is the only party you can trust with the NHS, which is quite strange given that they were going to cut the NHS budget at the last General Election.
Here's another case of revisionism on the part of Labour. They claim to be the party of the NHS yet the coalition have ring fenced the health budget and they were going to make cuts. This is just another example of opportunism and deceit from the Labour party.
So, how about education? Surely Labour have done better there than they have on health care. The education budget has increased from £37.15 billion in 1997 to £79.50 billion in 2009, representing an increase of 61.8% in real terms.
However, we have slipped down the tables of the world with regards to number of people in education and educational results. Our youth often can't write properly, feel let down by the comprehensive school system and are held out of top jobs by Labour's decision to remove the meritocratic grammar school system.
Again, it is the Labour government, the party of the left, which has removed meritocracy and returned to a two-tier school system where results are based on ability to pay, rather than academic intelligence. The same Labour party which, in government, instituted university tuition fees in 1998 and tripled them in 2003 now attacks the coalition for increasing them seven years later -- what incredible hypocrisy.
Author David Craig accuses Brown of wasting over a trillion pounds (you can read some of the book online for free) during his stint as PM and chancellor, about 80% of the deficit.
So, overall Labour's record on the public services they claim to love is less than stellar. They doubled the health budget and failed to keep up with Europe. They added 60% to the education budget and free-fell down the world tables. Now they're cutting the front line services in order to preserve their beaurocrats.
Now, let's return to the cuts. Remember that we started by explaining that Labour was borrowing £1 for every £3 it brought in as tax. This means that 25% of the public sector was built on a false promise, just like my hypothetical son's hypothetical 73 inch TV.
So, we can show that in fact, the cuts being put forward right now are Labour's cuts, not those of the coalition. I can't say that I entirely agree with the way they're doing it, but I certainly think it's a good thing that they are sorting our finances out.
Now, it might be easy to slag off the government -- I do it all the time -- but the fear is that in our disdain for the cuts, that we become willing to go back to that government which put us in this very situation in the first place when we go to the polls in four years time.
It's a long way away, but there's no time like the present to make up our minds about the way we expect Britain to manage her economy.
A vote for Labour, whether that's at a Council, a Mayoral, a European, or a General election, is a vote for the following:
- Creating jobs on the premise that the next government will have to cut them
- Slashing public service to protect middle management
- Hypocrisy, lies and deceit
- Failing our schools and our youth
- An expensive and bloated, crippled healthcare system
- Waste, economical mismanagement and an eternity of austerity
It's time to demand that our politicians work for us, and don't spend money that we don't have. It's time to demand that they clear the national debt so that we have the ability to spend all of our tax revenues. It's time to demand that they consider the EU budget and financial aid for cuts as easily as they slash health, transport & education. It's time to demand responsibility and create a Britain which thrives to create her own wealth instead of stifling long-term growth with short term borrowing.
May we never have a government again -- red, blue or yellow -- which seeks to mislead us, to display great hypocrisy, to conspire against the people or to bribe us with our own money.
Yours Faithfully,
MINUS TEN
