Coffee House

Lies, damned lies, debt and Nick Clegg

8 May 2012

Does it matter if the Prime Minister and his deputy mislead the country about what they are doing to the national debt? Neither of them seem to think so, if today’s Essex Relaunch today is
anything to go by. First, Cameron:

‘The problems of over-spending and too much debt can’t be solved by even more spending and even more debt.’

He chose his words for consumption by the ordinary voter, the factory workers who formed his backdrop. Who, listening to that, would guess what Cameron and Clegg are doing with the
national debt?

Clegg, I’m afraid, went far further and suggested that the debt was being eliminated.

‘I think we have a moral duty to the next generation, to our children and our grandchildren, to wipe the slate clean for them. We set out a plan, it lasts for about six or seven years,
to wipe the slate clean. To rid people of that sort of dead weight of debt that has been built up over time… We owe it to the youngsters of today to lift that dead weight of debt off their


If Clegg were a company director, and used this language in a financial report, he would go to jail. To use an analogy the Tories adopted, a baby born in 2010
inherited £17,000 of national debt. By 2015 that will be £21,000 (more here). By
what stretch of the English language does Clegg think this is that ‘wiping the slate clean’?

Clegg talks about ‘moral duty’ and at the risk of sounding pious, I’d say that his moral duty is to level with the public, to be completely honest about the extra debt with which
his government is saddling the people. It’s going up by 60 per cent over the parliament, just as much as Labour proposed. If Brown had stood up and said his debt programme would ‘wipe
the slate clean’ the Tories would have jumped down his throat — and rightly.

Now, you can say that harsher cuts would be dangerous — even counterproductive to the recovery. But it is outrageous that the Deputy Prime Minister should stand in a factory of workers and
claim that his government is ‘wiping the slate clean’ on national debt when he’ll leave that slate (and those children) with 60 per cent more debt than when he arrived.

It’s odd: two otherwise-honest men have decided to use language which is designed to convey the opposite of what is happening with the national debt. Given that both say they want to restore
trust in politics, it is utterly inexcusable.

Hat-tip to Patrick O’Flynn who alerted me to Clegg’s remarks, which were not in the "">No.10 version of his speech.

This was no slip of the tounge. Clegg’s office tweeted the ‘slate’ line after the speech and Pete has "">critiqued Osborne’s ‘credit card’ analogy which Cameron used again today.

  • Ian Walker

    Presumably the plan is to be in a better shape when the growth – eventually – comes.

    The great imponderable is what your graph would have looked like under a Brown or Brown/Clegg administration. A massive middle-fingered salute to the nation, I would hazard a guess.

  • Richard of Moscow

    “Just been listening to a member of one of the newly elected greek “dissident” parties who advocated a moritorium on all national debts within the EU in order that countries like the PIGS (and the UK) could use the monies that they are currently spending on interest to expand.
    It sounds quite plausible on the face of it but who would be the big losers? if any?”

    How would the EU govts attract future lenders afterwards? They are having enough trouble now.

  • Trevor Bacon

    Just what would happen if nothing works. What if pump priming or austerity were yesterdays solutions. What if the excessive debt, public and private, were the entire basis of economic growth in the years before the crash. What if the game had completely changed and nobody noticed?

  • Dimoto

    Actually, the term “national overdraft” is equally inaccurate and misleading.

    It’s pretty obvious that the script-writers are struggling to come up with a suitable “demotic” term that the electorate can understand.

    If the coalition does what it was elected to do, and planned to do, i.e. reduce the annual budget deficit to (say) 1-2% GDP, (implying a slowly declining national debt), within 5 years, the problem would be contained.

    Unfortunately, the Euro-screw-up, combined with a very poor performance by the Treasury, has put the plan in serious jeopardy.

    It is fair to point out the disruption caused by the ongoing Euro-crisis, but also fair to point out that Osborne and his team have been sleeping on the job.
    Deficit reduction is a hard, full-time job, on both the income and expenditure sides of the equation.
    The coalition simply haven’t walked the walk !

  • DAS1

    Cameron’s recent speech was headlined in The Daily Telegraph of 6th May as “The Coalition risks being seen as a ‘bunch of accountants’ warns David Cameron”. No problem David, not you and Nick. I thought it silly at the time to potentially offend a core voting group with key skills with blasé remarks, now I think this double act is combining dishonesty with silliness. Soubriquets like “posh boys” are already flying around. They now sound like PR types with public school Monty Pythonesque humour inbuilt into their DNAs – why not now try a variant of “a fine mess you’ve gotten me into Stanley”.

  • Robert Williams

    “He chose his words for consumption by the ordinary voter” As did Wilson with “the £ in your pocket & purse” statement in his devaluation (to $2.40 to the £!!) speech that got him forever ridiculed.

  • TomTom

    “but we are slowly getting rid of the overdraft “

    John Moss you are amusing. The Bank of England has rigged the system to borrow at low interest destroying pensions and savings; it then issues Gilts to Banks and Pension Funds and buys the older Gilts back using Magic Money.

    You are barking mad if you think they are making any impact on the PSBR or the National Debt which will be >£1.4 TRILLION by 2015. Britain is in WORSE shape than Greece but it has its own currency to debase.

    Remember Edward Heath ? One of his 1971 Pounds is now worth 9 pence.

  • lola

    Which long lamented political journalist was quoted as thinking when interviewing politician – “Why is this lying bastard lying to me?”.

    Plus ca change. Plus ca meme chose.

  • Ghengis

    oldtimer – it,s called “spin”, remember – those persons we now employ to run such affairs charged themselves with getting rid of prior to getting elected.

  • oldtimer

    One of two conclusions can be drawn from Mr Clegg`s remarks – either he does not understand what he is talking about or he does understand but chooses to lie about it. Either way he is unfit for the office he holds.

    Cameron has made similar, if more slippery, remarks in the past about paying off the national credit card. It is squalid politics.

  • HASurvivor

    Mind you, if the monocular mucophage’s mob were still in charge that graph would need a logarithmic vertical axis. They’re having a go but they’re trying to alter the course of a supertanker. Before you can reverse a trend of this sort it needs to be slowed down; that’s happening, at least. It will take far longer to turn it back down.

  • John Moss

    Indeed this is misleading and also, unhelpful to their case. they should say,

    “We are running an annual overdraft of £120 billion and our collective mortgage is £1,000 billion. We can’t just stop spending or we’d go the way of Greece and Portugal, but we are slowly getting rid of the overdraft and until we do, the mortgage is going to get bigger. Then, for a couple of decades we’ll still have to be prudent and pay back some of the mortgage. Then we might have something decent to leave to the children.”

    They might get brownie points for telling the truth and people might realise the sheer scale of the mess Labour left behind.

  • Tom

    “will inherited” typo?

  • RKing

    Sir Everard – But if the moritorium allowed expansion/recovery then there might be perhaps a better chance of getting our money back than allowing this seemingly impossible debt situation to continue. If countries go bankrupt, as it now seems likely, then we will never see our money again. It could well be in the UK’s interest.

  • Popeye

    “two otherwise-honest men”
    Sorry Fraser, honest and politician should never be used in the same sentence.

  • 2trueblue

    Fraser, where did you get the idea that debt could be written off just by saying so? The whole world is in debt and unless the government stands behind the debt we are doomed.
    Cutting anything costs money initially, paying people off costs money. The lists of costs is endless. Are you so economically illiterate that you are unable to present the facts? Find a new job.

  • Amanda

    Luckily we have the BBC on hand to point out these misleading utterances. Hats off to the Beeb for keeping our politicians on the straight and narrow!

  • Scotty

    So the alternative to the posh boys is ?? – balls and mille, more posh boys but with union support who would spend EVEN more in the pursuit of “growth”.
    Their version of growth is paying for jobs that achieve nothing and increased pay for their buddies in the unions who will pretend to “work harder” – you can see the success of the brown balls policy in the 3rd class education system , the non caring NHS, the grossly abused welfare system with thousands paid more than top rate tax payers get paid.
    And this is the alternative to the current posh boys ? – we’re dooooomed.

  • Nick

    How to measure debt, and how to pull the wool over the eyes of the electorate.

    If its a percentage then its numerator / denominator * 100%

    So the first trick is to make the denominator bigger. Include other people’s income. e.g. GDP rather than taxes.

    The second trick is to make the numerator smaller. Omit lots of debts. If you’ve a pensions black hole, leave it out. Put things like PFI off the books. That makes the ratio smaller.

    To justify it, say other countries are doing the same. Just like Reggie Kray claiming he can’t be prosecuted because others are getting away with murder.

    The real debt is 7,000 bn. Tax revenues are 550 bn.

    The proper ratio is then 7,000 / 550 = 1270%

    Nearly 13 times geared. More than the risky banks that went bust, and they didn’t have the expenses of running defence, police, NHS, schools, roads, justice, ….

  • Nick

    Ah yes, what is Fraser hiding?

    Yep, your state pension. In fact all government pensions. They don’t owe you a penny. It’s not a debt because the numbers above are only gilts.

    That’s the plan. The plan is to not pay out on the pensions. That is plan B. Screw the electorate.

  • HJ

    “If Brown had stood up and said his debt programme would ‘wipe the slate clean’ the Tories would have jumped down his throat — and rightly.”

    In fact, Brown said something very similar and wasn’t picked up on it. Here he is claiming to the “bigoted woman” that his deficit reduction programme would “cut the debt in half in four years”.

    The relevant bit is at around 2:00 into the clip.

    Although I agree with Fraser’s general analysis, to be fair to Clegg, if the deficit is eliminated, then with GDP growth, the debt level as a percentage of GDP will naturally fall and will gradually become less and less of a problem in the future. So Clegg’s point, if not his exact wording, is valid.

  • Sir Everard Digby

    Ben M -how do you think GDP is measured? It includes the ‘value’ of goods and services delivered by the government. Therefore the debt as a % of GDP measure is not a reliable way to look at this.If the government borrows money to ‘invest’ in public services it could be possible that debt as a % of GDP remained the same if the value of the services provided by the ‘investment’ was the same as the amount borrowed. Very hard to establish. Using this ‘narrative’ is therefore unwise and confusing…..or is that the obhjective?

    R. King – our banks have taken part in the lending to Greece. A moratorium on debts probably meaning a delayed default) would require us,the taxpayers, to support further bailouts to our own banks. Greece would simply be shifting the problem somewhere else -but there is nowhere else to go.

    If Greece did this, the cost of any further borrowing would be astronomical and assumes withdrawal or ejection from the Euro. That would incur break up costs they cannot afford.

    It is yet more political class hyperbole.

  • TomTom

    “we need to see where this debt will be as % of GDP.”

    You might, but real people know that Debt is what boosted GDP for decades – that and public spending. It is what is keeping the economy afloat as Osborne raises Taxes and increases Spending…..the Economy belongs to the Government and the Banks – Households must simply pay Interest, Taxes, Fuel, Food and go further into Debt to fund Government and the Banks.

    The policy is simple the results disastrous. We have decades ahead to enjoy this scorched earth policy and marvel at Bankers and their ability to make us pay for their venality and corruption

  • Archimedes

    It is strange that a government that was elected because of debt problems, and is, to some extent, disliked because of the measures they are taking to tackle debt, are underplaying the problem.

    Babies born aside, every member of the workforce has £40,000 of debt and by the time the deficit is eliminated they’ll find that they have to earmark about 10% of their earnings just to pay for maintenance of the public debt.

    It’s funny that Osborne is supposedly the ‘Great Strategist’, because he completely underplayed his hand in this. It should be pointed out, to those that love the big state, that as long as debt maintenance payments are increasing, the eventual real term cuts to core public spending will also have to be increased just to bring the budget into balance.

  • Colin Cumner

    You can dress it up as you will, produce graphs, statistics, etc. to create the illusion you are dealing with Britain’s debt crisis but it remains just that – an illusion. Plain truth is if you spend what you haven’t got, you end up in debt and if go on spending in this manner, you end up in deeper debt. Doesn’t take a degree in economics to fathom that out.

  • Radford NG

    This Seven Year Plan reminds me of Comrade Stalin and all the announcements of economic figures that went with them;and continue in the fantasy worlds of Cuba and North Korea.It also brings to mind Orwells didactic work’1984′.

  • GixxerBoy

    Ben M. Do you seriously expect the UK’s GDP at constant prices (i.e. not including inflation) to rise over 60% by 2015? If so, you are either quite insane or you know of some economic alchemy. If the former, I’d suggest you seek help. If the latter, you should be sought out by every government on the planet.

  • MPM

    The only slate they have wiped clean is the one marked morale in the Armed Forces.

    This will be their only tangible legacy.

  • Seasurfer1

    I have lost all faith in Cameron. He has got to go!

  • RKing

    Just been listening to a member of one of the newly elected greek “dissident” parties who advocated a moritorium on all national debts within the EU in order that countries like the PIGS (and the UK) could use the monies that they are currently spending on interest to expand.
    It sounds quite plausible on the face of it but who would be the big losers? if any?

  • Dimoto

    The LibDems have been “misrepresenting” since time began, why get all shirty about this little speech ?

    Of course, there is always the alternative possibility that banker Clegg doesn’t understand the difference between debt and (the annual)deficit.

  • Richard Evans

    This article is either deliberately misleading or a misunderstanding of the situation.

    Yes debt will rise. That is a fact, it’s never been denied. What the coalition have said is they will reduce the deficit. Now the deficit is basically the shortfall between income and expenditure, so reducing it means borrowing less than you would BUT STILL OWING MORE. Until you enter a surplus debt will increase.

    Cleggs remarks are still valid, we don’t want to increase debt any more than we have to.

    And this is from someone who wants Clegg and Cameron out of no. 10

  • JohnPage

    Have I misremembered or was it on the R4 6pm news? I know when I heard it I thought it breathtakingly disgraceful.

  • Magnolia

    Don’t forget Osbourne told the whole world on TV that Britain could give £10 billion to the IMF because it had dealt with it’s debts.
    This post reminds me of the time you popped up on live TV and asked Gordon Brown if he was lying about cuts. The country needs brave honest journalism and truth. Why don’t you ask Clegg if he’s lying about debt? I suspect the answer will depend on the colour of tie that he happens to be wearing that day.

  • Mark M

    This is why people think there’s an alternative to austerity. The way Dave and Nick talk they paint a picture that austerity = no debt, and people think that a little debt is worth is avoiding the austerity.

    They don’t realise it’s austerity = lots of debt, no austerity = even more debt.

  • idle

    One could go so far as to say that they are a pair of lying bastards. Dishonesty in public office is a scourge. Can we start impeachment proceedings?

  • Right On

    Utterly pathetic, it’s dismal that we can basically choose between two groups of charlatans who are intentionally misleading everyone to manufacture a political “choice”.

    Basically we can have big government, big spending socialists or socialists, who like big spending and big government.

  • Cuse

    Well highlighted Fraser.

    Cameron and Clegg both suffer from “Hyperbole-itis”. They’re fond of making outrageous and untruthful statements, believing in New Labour’s tactics of aiming not for the truth, but for the news cycle.

    This government is truly awful, isn’t it?

  • Thomas Paine

    Clegg has long-standing form on this he did it in a R4 interview with Martha Kearney a while back and she completely let him off with it.

    There’s a great Photoshopped pic of him online somewhere with a Pinocchio nose on him, about time that became every publication’s stock pic.

  • Austin Barry

    “It’s odd: two otherwise-honest men ..”

    No, just two dishonest men who lie effortlessly. Conmen.

  • strapworld

    Goodness me Mr Nelson, you are becoming my star writer. Please keep taking the medication. Whilst agreeing with almost everything you write I cannot accept your statement that these two charlatans are ‘two otherwise honest men’ Deception, lies and attempting to fool the people whilst treating them as idiots is not honourable. The sooner the conservatives ditch this odious man and call a general election, the better for the country.

    Now you are in this mood, About immigration………

  • BenM

    Right Mr Nelson. That’s the debt curve. Now, what’s the GDP curve?

    You are right that aggregate debt is rising throughout the current period of austerity – and even more so given its failure.

    But you are guilty of mendacity too.

    Nominal debt levels may look scary, but to see the real picture we need to see where this debt will be as % of GDP.

    Debt per person may look frightening when journalists get lost in the detail but means nothing against that person’s spending power.

    Perhaps £21k of debt per child is a price worth paying to keep their parents in work and able to feed them?

    Look at Greece where for many families this is no longer the case.

    That is a far bigger cost to hand on to our children – far bigger than some level of intangible sovereign debt.

  • Donald

    As you say Fraser “if Clegg were a company director……..he would go to jail”.Why do they say these things? Because they know they can get away with it.Clegg won’t even be challenged on this.Why?

  • Tarka the Rotter

    I see the Radical Left Party in Greece have a five point plan, one of which is to abolish the law which gives politicans immunity, making them personally responsible for their actions. We could do with such a law here…(good grief, I’ve just found myself in agreement with the Radical Left…time to go and lie down)

  • Tiberius

    As you know, Fraser, it has to get worse before it gets better (turn the ship around, etc), thanks to Brown. The markets believe in the end product as things stand.

    I don’t think Cameron’s remark suggests that this is not the case, but he could have set it out within context. Clegg’s “wipe the slate clean” does not, however, stand up to scrutiny in any context. But I do fail to see why you keep using Labour 2010 spending plans as a benchmark. Balls would have taken us to Armageddon if he’d got into no.11.

    BTW any progress on the blog about the shambles by the guy from whom Cameron can learn so much? 😉

  • Liz Brown

    Perhaps they believe their own bullshit – I doubt too many “ordinary” people believe anything any Politico, anywhere, says anymore

  • Derek

    What possible benefit do they think they’ll gain from this? In three years time for all the talk about harsh cuts there will have been no cut to overall govt expenditure. All the hyperbole with none of the benefits. These two clowns even said it wasn’t about cutting the size of the state or for ideology that they were doing this. Other than the fact they arent actually doing anything! When Cameron purses his lips and delivers what

  • Noa.

    Well said Fraser

    Dave and Nick are plunging down the Trust and Truth curve as quickly as their Debt curve is rising.

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