Coffee House

Budget 2013: Six Scary Graphs

20 March 2013

Those of a nervous disposition should not click beyond the link. What follows are a few graphs that sum up what’s very hard to spin out of: the extent to which our economic situation has worsened, and how bleak the future looks.  The Chancellor started by saying he’d cut the deficit by a third, not a quarter. That’s one way of putting it. Another way is to say that debt is up 38 per cent under the coalition so far, and is set to double:

George Osborne’s targets involve ratios, not absolute levels of debt. Here is how the outlook on his debt/gdp ratio has changed since his first budget:




Claim your gift


And that’s the optimistic view. Citi doesn’t think (pdf) the ratio will fall at all. Three years ago, George Osborne was talking about abolishing the structural deficit. Put the OBR’s 2015 projection next to those the IMF have for the rest of the world and it seems he’ll now fight the next general election with the…

The impact of inflation, paired with low salary growth, is perhaps more meaningful than any of the above:

The same is true for the economy. Four years ago, The Spectator ran a cover asking if we had entered a Japanese-style lost decade. Here’s the answer: GDP per head.

So, all told, this is the…


But there is some good news: the fall in real wages makes it cheaper for companies to keep workers on and hire more. Employment, as ths OBR says, “continues to surprise on the upside.” One of the undoubted successes of Osborne’s strategy is that there are more people in work than ever before:

Give the perfect gift this Christmas. Buy a subscription for a friend for just £75 and you’ll receive a free gift too. Buy now.

Show comments
  • Claw toes

    That is we call news..

  • AlexanderGalt

    For some reason oGeorge Osborne refuses to learn the real lessons from the 1930s.

    The National government of 1931 cut spending savagely and the British economy grew more than 6% in 1934.

    There’s a fun take on this in: “Here’s to a 1930s Type Recession” at:

  • Polleetickled

    This article appears very opportunistic by omitting how *any* of this compares to other leading nations. No surprise. Peer reviews have never been a leftards consideration.

  • itdoesntaddup

    The obvious answer: annex Norway…

  • Andrew Neill

    Dear Fraser…

    You’re right, Gideon (who is massively unloveable) did indeed get it wrong, but only in terms of selling a coalition reaction response to high. Yes, they should have cut spending further and quicker, but it’s not their fault that spending was so ludicrously high. As I am sure you know there are always pitfalls in spending cuts, purely due to legislature that exists in terms of chopping loose fat and the costs associated. You know plenty of people in whitehall, therefore I’m sure you know how hard it is to cut public funded jobs (legally, financially and politically).

    The problem here is that we’re still suffering from the actions of the last government. The decisions taken to increase public sector employment (and salaries within), the decisions taken to further human rights and the decisions taken in the last 12 months of office to scorch the earth… Ensuring the current government never really had a choice, the ridiculous contracts, the increased spends, the commitments to Europe. All have (basically) led to this government being stitched up, add to that the mess of the Euro and we’ve got a situation that whoever had control of the ship would have been in this position now. Precious few could have avoided it, certainly not labour. Without coalition a conservative government would have had more chance but (as ALL the political sooth sayers predicted at the time [including Mervyn King]) this tenure was always going to be a poison chalice.

    Do you not think you (I mean personally, well, in the sense the magazine you edit) are hurting the country more by attacking the Conservative party so much at this point. There isn’t long left in this electoral period, not long before the polls are opened to see what choice we make (one which we’re now legally abided) to for a further 5 years. George isn’t setting the world alight, Dave is having the odd moment or two that work, the odd that don’t. But frankly we’re bette off with these guys than we would be going back to Labour and MilliEd.

    I implore you consider this in terms of future editorial, a return to labour is not what we need. The right leaning press continually beating up on the right leaning parties is the last thing the country needs right now. I believe that we should be overly critical of ourselves, but think you’re approach to the reality of the situation is naive. There was never a way to win this hand, it was always damage limitation…. Right now all you’re doing (day in day out) is giving the opposition an easier way back in.

  • Daniel Maris

    Have the governmnet been fiddling the figures on expenditure this year, though?

  • G Hillath

    So to recap, we are screwed but at least more people are in 2 or 3 part-time jobs to try and make ends meet.

  • Daniel Maris

    I don’t accept that the employment rate is a success for Osborne. We haven’t yet got to the bottom of what is happening there. We have really seen a shift to part time employment, self-employment and subsidised employment.

  • Dogsnob

    The fall in real wages is good news? Do you earn a real wage Mr Nelson?

  • BigAl

    Looks like Osborne has shown us that Ball’s plan of borrow and spend more has not worked…….

  • dalai guevara

    What strikes me here is that one graph, the ‘worst deficit in the west by 2015’ graph.

    We note that of all nations, Norway sport the BY FAR the highest surplus, although they have incredibly high standards in child care, maternity leave and healthcare. After paying for all that (we get a pittance in comparison), they still run huge ‘profits’. Now, everyone knows how they do that: natural resources.

    What on earth is going on in Britain in that sector? North Sea oil, massive new discoveries of shale gas resources, and who is creaming off the profits? How exactly do our natural resources benefit our society? The answer is of course plain to see: there is no interest for society to benefit in a Norwegian manner.

    • 2trueblue

      Worth looking at the line drawn up at the time with Norway when saying who owned what. Our civil service were not so efficient and gave a lot of territory away. They were a bit surprised that the UK gave away so much. Can’t remember which party were in power. Whoever it was did not do a very good job for us.
      With a smaller population the money goes a lot further.

      • dalai guevara

        Worth noting that I am keeping my eyes on the ball that is the British civil service.

  • Mike Barnes

    “One of the undoubted successes of Osborne’s strategy is that there are more people in work than ever before:”

    There are more people in the country than ever before, it’s not really that impressive is it? Especially as our GDP is still significantly lower than it’s 2008 peak, despite the extra workers.

    It’s a productivity crisis, zombie firms propped up by low interest rates, workers doing low wage few-hours jobs propped up by tax credits.

  • andagain

    Oh look! The OBR says the recovery will finally start next year. Just like they said last year. And the year before that.

    Let me guess: in twelve months they will say that growth has been less than expected, but they expect it to pick up in another year or so.

    • petermorris

      We now have an independent budget forecaster that gets it just as wrong as the government forecasters before them. Big Deal!

      • andagain

        Things are always far worse than the OBR says they are. So however appalling things seem to be, they are far, far worse.

        And they will get worse still when the eurozone falls apart.

        • petermorris

          I am sure the Eurozone will survive the Cyprus problems. If they can solve Greece, Spain, Portugal, Ireland, Italy, etc. they can survive almost anything. Cyprus contributes about 2% to EU GDP – peanuts.

  • Tom Tom

    Fraser, it is rather as Jim Rodgers said Britain hasn’t got a future, no deus ex machina as with N Sea Oil. It is a Secular Slump because there is no motor to drive the economy forward in a very competitive world. There are simply too many people here, and too many whose lifestyle depends on public spending. There is a very weak private sector outside the monopoly businesses and it will never be strong enough to carry all the passengers. Basically there needs to be a 30-40% cut in living standards probably to levels of the early-1960s…….it is the adjustment that is slowing recovery. Osborne has to decide if he wants 5-9 million unemployed, or whether he can somehow cut incomes substantially through inflation and devaluation driving up input prices over say the next 7 years while holding down incomes.

    • Makroon

      Jim Rogers, the know-nothing speculator who said UK was finished and Sterling would go to parity (when the exchange rate was hovering at about 1.41$ ?
      You certainly know how to pick a guru.
      Actually, Rogers was just parroting Mike Porter, who wrote in his book on the comparative advantage of nations (about twenty years before Rogers), that the UK had none.
      (Due respect to Mike), it’s called good ole Yankee ignorance.

    • andagain

      no deus ex machina as with N Sea Oil.

      Shale gas.

  • LB

    As usual, lets ignore pensions debts. That’s just for the little people.

  • Kirkwells Planning
  • HookesLaw

    The government inherited a deficit of £160 billion pounds!
    And as I said earlier I do not believe Mr Nelson is being honest when he compares the relative levels of public deficit with those countries who fund their NHS by insurances. Foreign heath systems which themselves are in deficit.

    • liversedge

      What’s National Insurance?

  • rollahardsix

    In all seriousness, is it now time for us to give up on UK PLC and for the bulk of this country’s population to leave and go live in Australia, on the understanding that our politicians may never stand for election there and cant screw them up as well? Lost decade, while our competitors continue to grow, we get poorer in relation to other nations and by the time its all over we are an economic shadow of what we were. Stuff that, I’m off to Australia :-)

  • The_UK_is_a_corporatocracy

    The bankers have done OK though.

    Today Osborne has promised them taxpayer bailouts on failed mortgage debt when we get the repossessions resulting from the interest rate rise shock when there is a run on the pound.

    Bankers can lend now to generate bonuses with little fear of losses. Lots of people buying overpriced houses with interest rates at a 300 year low. Did you see the “Moral Hazard” sticker on the side of the budget briefcase?

  • Chris lancashire

    On the other hand, we are starting to recover from Labour’s disastrous stewardship.

    • liversedge

      On what measure?

      • HJ777

        A reduction in the deficit and better control of public spending?

        • liversedge

          Tell me again what has happenned to Govt debt under this Chancellor?
          And have you looked at the deficit forecasts for the next 3 years?

          • HJ777

            So the increase in debt under this government is unrelated to the record peacetime deficit it inherited, is it?

            At least it has slowed the rate of borrowing.

            • dalai guevara

              latest data suggests he hasn’t
              go figure

              • HJ777

                The latest data shows that the deficit is down by over a quarter.

                • dalai guevara

                  the latest data shows the deficit at
                  – 2011/12 121bn
                  – 2012/13 120.9bn (only after fudging the figures, it actually up to 123.2bn)
                  20- 13/14 God knows what. They always go in over optimistic.

                  So your claim is blatant misinformation.

                • HJ777

                  What deficit did they inherit and what is it now?

                  I didn’t say that this years deficit was lower than last. I said that it has (past tense) slowed the rate of borrowing – which it has.

                  The blatant misinformation is all coming from you.

                • dalai guevara

                  Osborne inherited debts of just above 800bn, they are now 1,200bn, hot shot. The deficit is NOT down by a quarter.
                  You realise you are digging deeper, aren’t you? My advice: stop digging.

                • HJ777

                  I suggest that you take your own advice, especially as you clearly don’t understand the difference between the deficit and the accumulated debt.

                  When you inherit a huge deficit, debt will inevitably increase even as you reduce the deficit.


                • dalai guevara

                  Jeez – I made a clear destinction between debt and deficit – the Guardian table is OUTDATED. Deficit remains unchanged at above £120bn for THREE consecutive budgets. Who flippin cares what the budget was in one year and after a crash?

                • HJ777

                  Jeez, indeed. The fact that the debt is up is not pertinent to what has happened to the deficit. There was never any scenario under which the debt could not have increased.

                  The deficit in 2009/10 was £156bn.

                  In what way has he not reduced it from that figure?

                • dalai guevara

                  In what way does a one year hike of deficit levels due to a global financial collapse and thus a reduction in the following year satisfy you? Ok, the car hit the ditch in 2009 (everyone’s car did), but do we see any signs of movement out of that ditch? No, we don’t – three consecutive years thereafter, we still see stagnant levels in the deficit – God knows where we would be if bookkeeping tricks like the Royal Mail pensions grab and other undisclosed financial sector interventions were all accounted for properly.
                  What is one the cards here is the real possibility for Osborne to almost DOUBLE the debts during his time in office. Lord have mercy!

                • HJ777

                  A ‘one year hike in deficit levels’?

                  Here the deficit (and spending) figures:
                  2006/7: £32.2bn (£550.2bn)

                  2007/8: £36.4bn (583.7bn)

                  2008/9: £69.0bn (£630.8bn)

                  2009/10: £156.3bn (£671.5bn)

                  As these figures clearly show, nearly all the increase in the deficit was due to higher spending (which doesn’t include financial interventions, by the way), so it can’t all (or even substantially) be blamed on lower tax revenue.

                  We ended up with a bigger deficit than any other major economy.

                  I repeat my question again – by what measurement has the deficit not been reduced (especially if we look at real terms figures, i.e. taking inflation into account)? Whether it is still reducing is another matter altogether.

                  You have a point about ‘bookkeeping tricks”. You include things things like PFI and 3G licences, I presume.?

                  By the way, some elementary maths for you. If we have two governments consecutively in power and first one doubles the deficit and the following one halves it, then the debt will be higher under the following one. But which has been more fiscally responsible?

                • dalai guevara

                  Yes, let’s just wait and see how in Gidiot’s last year, he will also rake up expenditure in a last straw-clutching attempt to get reelected. This is what we all know Brown did – why should the towel folder not learn from him? He would of course have picked that up, and bOoOoOm! We just doubled our debts – in only one (!) legislative period…

                  You cannot deny you heard that here first.

                • HJ777

                  So you accept that you’re wrong about the deficit, so far. We’re making progress at last.

                  You just think that Osborne will do the same as Brown did, later in this parliament. That’s fair enough, but don’t condemn him for something he has neither done nor proposed yet. Wait until he does it- if he does it and then condemn him for it then.

                • dalai guevara

                  The deficit has doubled compared to 2008/09 levels. Equally true but irrelevant.

                • HJ777

                  Yes, but who doubled it (principally through ratcheting up spending to try to inflate the GDP figures)?

                • dalai guevara

                  So what are you going to do about it? Double debt again?

                • HJ777

                  From a position of a deficit of £156bn in 2010 (around 12% of GDP), there was never any real prospect that debt wouldn’t double over the following few years. As Hayek observed, the time to fix these things is during the boom. Once you wait until the boom turns to bust, it is too late to prevent most of the unfortunate consequences.

                • dalai guevara

                  Yes, agree. the boom was fuelled by real growth, but by making things up. Now the bust is fuelled by making things up. That ‘good news’ tactic playing out in front of our eyes is just not working for me. An the blame tactic clearly indicates that after three years on the ball, our current set of leaders are still looking back and not forward.

                • HJ777

                  Yes, despite the protestations of the left, the economic policies of the current government are only mildly different from those they inherited. They’re better, but not convincingly so.

                  I’d prefer it if they implemented a far more radical change of direction, extensively cutting the bloated state, implementing supply side reforms and cutting taxes. Not much can be done about the short term (as Hayek said, the time to do something about the bust is during the boom, otherwise you’re too late) so they should have been looking at longer term reforms.

                • LB

                  And another 5,000 bn of pensions debts.

                  You do want your state pension don’t you?

                • dalai guevara

                  Nope – long past expecting anything from the state. Never have and never will do (all fingers crossed).
                  Pensions are of course a future (unfunded) expense without any asset backing, so on one shelf with Trident, costs of military interventions and outrageously high subsidies for nuclear. You do not add the latter (unfunded and non-asset backed) to your up and coming debt pile, so why add the former?

    • G Hillath

      Someone’s been indulging in cheaper beer a little early.

  • Nicholas chuzzlewit

    I was always keen on a move to Norway.

    • Smithersjones2013

      Didn’t you know its one of the few countries in Europe that does not benefit from being a member of the EU but still is under the Jackboot of the EU (well according to assorted Europhilacs it is). They seem to be relly suffering as a result don’t they?

      • HookesLaw

        Norway obeys EU single market rules. It does not vote on them. It agrees to free movement of labour with the EU and it is in the Schengen agreement as an independent Scotland would have to be if it wanted to join the EU.

        Feel free do disagree with any of that if you want to.

        ‘Norway and Switzerland are opposing a budget increase for the next
        Framework Programme, which starts in 2014, fearing that their contribution to its costs could grow out of all proportion.
        Both countries are outside the EU and would have to pay significantly more towards Framework 8 than previous Framework Programmes if its budget increases. On 13 January, Norway’s research minister Tora Aasland warned that the Framework Programme should be reorganised before its costs grow any further.’

        and …

        ‘EEA participants in the Framework Programme have to contribute an amount equivalent to their share of Europe’s GDP. Norway’s share of Europe’s GDP is 2.4 per cent.
        So if the EU spends 100 million euros on Framework Programme research, Norway pays 2.4m euros on top of that to take part.’

        What is the UK share of EU GDP?

    • HookesLaw

      Norway’s tax burden is about 44% of GDP c0ompared to the UK’s 39.
      Go to a pub, if you can find one and see how much a pint (or about 3/4 pint) costs you.
      Try and buy a bottle of whisky – hint, don’t go to a supermarket.
      As for a Big Mac….

    • Brunost

      Don’t be, they are mostly humourless zombies!!

  • John_Page

    It’s an omnifail by a useless chancellor though Balls would doubtless have been worse. Press control, discrimination against mothers who actually want to bring up their own children, Fitch reviewing the AAA … can the government get anything right?

    Maybe they could appoint a media minister capable of being trusted with negotiations and who’s heard of Hello magazine.

    The hamfisted mediocrity from the top is condemning us to five years of the jackboot of Miliband and Balls.

    • andagain

      discrimination against mothers who actually want to bring up their own children

      I am slightly tired of Tories demanding spending cuts and then claiming that stay at home mothers need subsidised childcare.

      • itdoesntaddup

        Just what subsidy do they receive? Their families are taxed instead – unless they’re single, of course.

        • andagain

          This one:

          Subtitle: “George Osborne’s subsidised child care rewards two-job families, and punishes those who choose to stay at home with their children”

          Because, you understand, mothers who stay at home with children still need subsidised childcare according to the Telegraph. So long as they are nice, middle class mothers with the right background, of course.

          • HJ777

            Where did the Telegraph say that stay-at-home mothers still need subsidised childcare?

  • geek1981

    Blime! Are we worse than Ireland/Greece for Deficit?

  • telemachus

    If ever we doubted that the Coalition had lost its way the above is it

    Debt as far into the future as he told us today will rise to 86.7% 0f GDP
    Given that he will not have solved the deficit and that we have not yet seen growth we will very soon have a debt equal to our wealth (creation)
    I am appalled and scared

    • HJ777

      The only consolation is to think how much worse it would be under Balls.

      • liversedge

        How so? What could he have done that was worse?
        Do bear in mind that in May 2010 we actually had growth in the economy.

        • HJ777

          It is very easy to produce short term ‘growth’ in the economy. You just rapidly raise government spending (and never mind how much you have to borrow to do it). In the short term, the ONS assumes that any increase in government spending creates an exactly equal growth in GDP (because they have no way of measuring the value of government output, as it is generally not sold).

          It’s a very simple trick – and that is exactly what the last government did. However, if you look at the figures, the monetary value of the GDP rise was less than the rise in spending. In other words, increased spending covered up negative growth elsewhere. As soon as the current government slowed this rate of increase (it didn’t cut spending, only slowed the rate of increase) then measured GDP growth fell away, entirely unsurprisingly. Only if you could raise the rate of borrowing indefinitely could this tactic work in anything other than the short term

          The big problem when governments pull these type of tricks is that afterwards we are back where we started but with the burden of more debt and a higher deficit.

          • liversedge

            Except of course the money that is spent is of value — it is not pissed against the wall. We get schools and hospitals etc. We maintain our infrastructure. You will have to pay the bill one day – its what is known as a false economy.

            What is more, even the IMF recognise their multipliers were wrong in the past and contrary to your assertions above about the ‘easy’ trick of Govt spending, they now recognise it has a multiplier between 0.9 and 1.7 (these are their figures, not mine) in return on GDP.

            • HJ777

              No, the last government announced huge cuts in capital spending. The increase was in current expenditure. We certainly will have to pay the bill one day (plus the interest).

              So what you’re saying about the fiscal multiplier is that if governments spend more, their economies will always grow faster. I wonder if you can spot the flaw in that argument and why you might have misunderstood the IMF (which still publicly supports fiscal consolidation).

              • liversedge

                Not sure why you think there is a flaw in the multipliers. I’m talking explicitly about growth and not revenue, so can’t really see a “flaw” .. tis just facts.

                Osborne’s spending review from 2010 introduced massive cuts in capital expenditure across the board incl 74% in local govt and communities, 60% in schools, 17% in health. Coupled with a VAT hike (which he promised wasn’t planned at the election, btw) has crippled the economy. As predicted by Balls.

                And falling back on the blame Labour meme re their capital spending plans is rather circular when your first claim is that Labour would have made things worse — do you see that?

                • HJ777

                  I didn’t mention revenue, I spoke about the economy. The increase in government spending in the last years of the Labour government was rewarded with GDP ‘growth’ of less than the cost of the extra borrowing. In other words a multiplier effect of much less than 1.
                  You misunderstand what the IMF is saying and the IMF consistently said, and continues to say, that fiscal consolidation is the right policy. Why would they do that if it were inconsistent with their beliefs on government spending?

                  Neither can you explain why, if your understanding of the ‘multiplier effect’ is correct, that the way to prosperity is not always to increase government spending. Numerous studies have shown that high government spending lowers long term growth.

                  I fully accept that Osborne’s policy of tax rises initially was mistaken. I also think he would have been better to have cut current expenditure sharply and not capital expenditure (albeit his capital expenditure cuts were almost exactly in line with the plans inherited from Labour). However, what you (and Balls) are then arguing is for no tax rises and more spending. This means an even bigger deficit.

                  In the short term, because of the way that GDP is measured, it makes little difference whether government spending is capital or current (I fully agree that capital spending is more likely to produce a long term return). Overall, Osborne didn’t cut spending from the rapidly raised levels he inherited from Labour – it continued to rise, just not as fast. So you can’t blame ‘the cuts’ for lower measured GDP in the timescale we’re talking about.

                  It seems, however, that your solution (and that of Balls) would have been to do more of the same, i.e. to continue to increase the rate of borrowing in order to ‘fund’ GDP growth worth less than the rise in government borrowing. It might well have worked for a short period, just as you can take out another credit card in order to continue spending. We all know what the longer term effect of doing that is though. After all, as you pointed out “you will have to pay the bill one day”.

                • liversedge

                  I urge you to read the source. The multipliers are not static.

                • HJ777

                  I never suggested that they were or that they weren’t dependent on what you spend your money on (obviously they are) – you did. That’s why I said that you might have misunderstood the IMF.

                  I presume that you haven’t read the IMF paper before? If not, I suggest that you re-read it carefully and see what it says about fiscal consolidation and how spending cuts have been shown to be more effective than tax cuts and where it talks about the interaction with monetary policy (remember, borrowing costs would have increased without fiscal consolidation).

                • liversedge

                  No they vary by the economic conditions.

                • HJ777

                  I see.

                  So you’re telling me that the Labour government must have ratcheted up borrowing and spending at the wrong time then (because the multiplier was less than unity).

                  Nice to see that we’re in agreement, at last.

              • petermorris

                The last government had a credible school building program to stimulate the construction industry which the coalition scrapped as soon as they came in. 2 or 3 years later they try to start up their own school building program. Playing with the economy for political idealistic purposes. Bl**dy incompetents.

                • HJ777

                  You mean the “Building Schools for the Future (BSF)” programme?

                  That vast waste of money which produced schools at enormously inflated costs?


                • petermorris

                  Yes, the building program (albeit not perfect) that was helping keep the construction industry bubbling along and the cancellation of which has helped Osborne stall the economy and lead the UK into a triple dip recession. That building program.

                • HJ777

                  Oh, I see. You think that spending money is inherently good for the economy even if it is wasted?

                • petermorris

                  Yes, wasting money on building more schools (which is what the coalition is now doing 3 years later), wasting money on our children’s futures, wasting money on better learning. In a time of economic recession, you need to stimulate the economy to get it working and to allow other industries. Osborne is borrowing more money than he planned and for what – to pay unemployment benefits and redundancy payments! Now that is waste!

                • HJ777

                  No, wasting money that could have been spent on building more schools or on education, had it not been spent so wastefully.

                  Oh, you believe in government borrowing more money to ‘stimulate’ the economy do you? Was increasing borrowing to £156bn per annum not enough for you? Perhaps if Brown’s government had borrowed a bit more and raised spending even more rapidly than it did, then everything would be bathed in sunlight by now. Or we might be in an even bigger mess.

                  Unemployment is no higher than it was when this government came to power.

                • petermorris
                • HJ777

                  Can’t trust selective reporting in The Independent, more like

                  Ordering departments to underspend their budgets is a saving. Whether it’s wise to do it at short notice is another matter, but it is a saving.

                  It all makes little difference. The deficit has been cut. It hasn’t been cut enough. It’s about flat this year compared to last. Everyone knows that (apart from you, it would seem).

                • petermorris

                  Yep, just me…and Paul Krugman and a number of other qualified economists.

                • HJ777

                  Even Paul Krugman isn’t barking enough to believe that the deficit hasn’t been cut since this government came to office.

                  He talks nonsense, but he’s nowhere near as bad as you.

                • liversedge

                  Deficit stalls for next 3 years, just like Growth. It. is. not. working.

                  can you really not see it?

                • HJ777

                  What is “it” and what is your alternative?
                  Where is your evidence that your alternative would not make things worse?

                  I would do things very differently from Osborne. What I would do is almost certainly completely the opposite of what you would do.

        • 2trueblue

          It was all built on sand and it did not really exist, so he created a myth that even he would have had to admit was so. Shame in retrospect that Balls did not have to pick up the bits.

        • Makroon

          That was not growth.
          In the jargon, it was a dead cat bounce.

        • Nick Reid

          Also borrowed £156bn in that year. Unfortunately that was unsustainable.

          • petermorris

            I expect Osborne would give his right arm for borrowing that low!

            • HJ777

              Osborne is borrowing much less than that every year now. Still too high, but much less than the level he inherited.

              • petermorris

                Yes – Osborne is manipulating the borrowing figures to show that – delaying borrowings into the next year to keep this year’s figures lower than they are. He has not met his own borrowing or debt targets for the past 3 years.

                • HJ777

                  I didn’t say he’d met his targets. I said he is borrowing much less than £156m per year, and not more as you erroneously seemed to believe.

                • petermorris

                  Add the borrowing for this year which has been placed into next year, plus all the other little fiddles like with the Post Office Pension Fund and he is way off. You can tell he is lying because his lips are moving.

                • HJ777

                  Yes, the Post Office pension fund is a one-off. But even without it, the deficit is lower than this government inherited.

                  Of course, Brown never included any one-offs in his figures did he? No 3G licences? Never concealed any public borrowing (PFI, Network Rail)?

                • petermorris

                  When the economy is running along alright as it was under Labour there is not a lot of need to manipulate borrowing figures, but when the economy is continually being forced into single dip recession, double dip recession and triple dip recession, Osborne just cannot help himself without doing a bit of manipulation.

                • HJ777

                  if the economy was ‘running along alright’ under Labour, why did they manipulate them then?

                  I seem to remember that the really big recession and record deficit occurred under Labour. Is that what you cal ‘running along alright’? Neither has there been a third dip.

      • G Hillath

        Yes indeed. Imagine having a Chancellor who got all his predictions correct.

        • HJ777

          Balls can’t even get economic history right, let alone predictions of the future.

          Remember, this is the man who claimed that the last Labour government weren’t running a structural deficit (Andrew Neil enjoyed skewering him on that one). This is the man who, in his Bloomberg speech, claimed that the 1981 budget caused a recession ( a few seconds on the ONS web site will tell you that the economy grew from Q2 1981 onwards and consistently).

          He’s a plank.

          • petermorris

            And Osborne is a splinter!

      • petermorris

        Surely you jest. No one could be worse than George “A Penny Off a Pint” Osborne!

    • 2trueblue

      Ah but look at the great foundation this debt had under Liebore with Balls and Millipede being such arch architects to help Brown, Blair, and some help from Whelan, bless.

  • Jupiter

    Yikes, the national debt will quadruple between 2000 & 2018.

    And we have nothing to show for it, the government might as well have pissed all that money down the toilet.

    • Nick Reid

      It’s gone to pay all the old age pensions, teachers salaries, NHS costs and a bit of financial sector bailing out that we don’t cover by taxes.

      No doubt some is wasted, but vast majority goes on stuff that most people think is useful and valued.

      The point isn’t that it is money “pissed down the toilet” but money that we couldn’t afford to spend.

      • rollahardsix

        Agreed Nick, it is symptomatic of us living beyond our means for too long and people up and down the country having unrealistic ideas of what living standard they should have and what the government can afford to spend

        • LB

          I partly disagree.

          If people had been allowed to invest their NI, the money wouldn’t have been wasted.

          They would have a lot

          • DrPlokta

            If people had been allowed to invest their NI then their parents wouldn’t have had pensions. NI can only ever work on the basis that each generation pays for the pensions of the previous generation, not its own pensions.

            • LB

              The parents would have had pensions, because the state wouldn’t have taken their money to give to someone else.

              So here’s a question.

              26K a year is median wage, Mr or Mrs (or Ms) Average.

              40 years ago that was 700 quid a year.

              What would have happened if they had been allowed or even forced to invest their NI into the FTSE?

              Now the FTSE is risky. You can make or lose money.

              Well, I’ll tell you. 560,000 quid.

              The state pension costs less than 130,000 to provide.

              That 26K a year worker has lost 430,000 pounds because the state gave it to someone else.

              I think that sort of robbery is evil. It’s an 80% take. Look a Cyprus. 6% is causing riots.

              • petermorris

                Of course, if that happened, the huge inflow of money invested in the FTSE would crowd out other investment. It would also probably lead to hyper inflation. So you lose all your money through inflation instead.

                • LB

                  Not at all.

                  1. It doesn’t have to be in the FTSE.
                  2. Where’s the inflation?
                  3. 560,000 in the FTSE, compared to 130,000 at most cost of a state pension.

                  If you want a 20% payout, I’m prepared to invest your pension money for you. I get 80%, you get 20%. It’s a great deal

          • 2trueblue

            You could put it that way. If our road tax went on the roads we would not have lots of large potholes. It is not just a question of what we could have done with the money, it is a tax and they spent it three, four, five times, thanks Liebore. But everybody could borrow so no one notices what was going on and what Liebore were doing with the money.

            • LB

              Quite. 430,000 pounds to the worse, for a 26K a year worker.

              Even a min wage earner is worse off.

              Earn more, and the theft is greater.

              Now what little they do pay comes to 5,300 bn according to the ONS (Its an underestimate too). 10 times taxes.

              It’s going to be worse than Greece

              • petermorris

                The UK actually does have the capacity to repay the debt though, unlike Greece. If only Osborne would directly stimulate house building instead of continually giving money to the banks.

          • petermorris

            We have a lot – the NIF has a surplus balance of £30 billion in it.

            • LB

              And they have liabilities of 5,300 bn according to the ONS.

              So does a fund of 30 bn pay a debt of 5,300 bn?

            • LB

              So lets analyse the 30 bn in a way to see if it can pay the pensions?

              10 million retired in the UK

              30 bn / 10 million = 3,000 pounds. Err, that’s a few months. Bugger, the money’s not going to last long is it?

              What’s the money invested in? Oh, the government has lent itself money. 30 bn in a IOU to itself

              Now there’s a solution to all your money woes Peter.

              Get out a piece of paper. Write on it, I, Peter Morris, owe Peter Morris, 30 bn pounds, and sign it. Bingo, you’ve a valuable asset, you’re a multi billionaire. One of the few.

              • petermorris

                We have been here before, Blagger. You ignore the current NI contributions of billions of pounds in real cash coming in every month from employers and employees and into the foreseeable future. Billions and billions of pounds to offset the liabilities you have identified. I note that by bringing forward the new flat rate pension system by one year, and with the cancelling of the contracted out discount for employers and employees, the Treasury is anticipating an addition £5.5 billion per year in NI receipts. Not IOU’s but real money.

                • LB

                  OK. Tell us what the liabilities are? Do you accept the ONS figures?

                  Now for the tax as an asset. Agreed, book that, but you equally have to book the costs of running those people. You can’t then leave of the expenditure of looking after people if you want their cash on the books.

                  So we what we have is 7,000 bn on the liability side. Zero assets. I can’t see how you can book assets that if you could sell, you would have to rent back immediately. e.g. Sell a school.

                  So on the other side. you want to book 550 bn in today’s value of tax revenue as an asset. OK. Now you’ve got to book 700 bn of costs as a liability too.

                  End result 150 bn a year going out. At 5% interest rates that’s another 3 bn of debts.

                  You can’t cherry pick. If you want to book future income, you’re going to have to book future expenditure of getting the taxes in.

                • petermorris

                  Your voodoo economics just don’t add up. A future income stream of NI contributions and taxes can be seen as an asset, especially if you want to count the future liabilities only.

                • LB

                  Yes. They can be seen as an asset. I’ve agreed with that bit.

                  However, at the same time the expense of maintaining that stream of taxes has to be booked as a liability by the same logic.

                  Since it costs more to keep the tax payer going, than the gain of the taxes received, by your logic, you have to say that there isn’t an asset, but a net liability.

                  That doesn’t solve the pensions mess.

        • Tom Tom

          It is because of BANK Balance Sheets…….

          • Daniel Maris

            The graph showing the history of national debt demonstrates just how well the baby boomer generation did in getting the national debt down from stratospheric heights to a reasonable figure.

            • LB

              But it ignores the elephant in the room, the off the book debts such as pensions

      • Tom Tom

        It has gone to the FIRE sector…that is where the bulk of Britain’s Debt has been incurred

      • TheRealAbeFruman

        Yup, it’s the teacher’s salaries that have done it.
        Dearie me…..

        • Nick Reid

          £50bn a year on education budget. What do you think the government’s £650bn annual budget goes on ? It’s pensions, NHS, welfare, and education mainly.

          • papyrus_minimus

            You are are right. The state simply employs too many people, on too good conditions, and their productivity is too poor.

            Hence the state vastly outspends its tax take (while providing sub-standard services), and will have to adjust somehow. The only way really is through devaluation.

          • petermorris

            Plus defence, in fact all the business of government. So what is your point?

      • Jupiter


        You talk more balls than Ed.

        • Nick Reid

          How so ? My point was more or less purely factual. Or are you just stupidly ranting, like your previous post ?

        • HJ777

          Come on. Don’t exaggerate.

          NOBODY talks more rubbish that Ed Balls.

      • petermorris

        The old age pension is actually fully funded from the ring fenced National Insurance Fund which currently has a surplus of over £30 billion in it. The Teachers Pensions are also actually fully funded through members’ contributions, employers’ contributions and investments, etc. The rest you are right about though.

        • HJ777

          I’ll let you into a little secret about the National Insurance Fund.

          There is no fund. It’s purely notional.

          Neither are there any investments in the Teachers Pension Fund. Again because, you guessed it, there is no fund.

          • petermorris

            As with your economic analysis you are wrong. There is a ring fenced NIF and if you bothered to do a bit of research you would know there is a £30 billion surplus in the ring fenced NIF:


            The HMRC says there is a funded NIF, the NAO audits the accounts each year, the GAD Forecasts the NIF each year and the DMO invests the huge £30 billion surplus in the NIF.

            • HJ777

              You need to read it and try (really hard, in your case) to understand.

              It confirms that it is a pay-as-you-go scheme and that there is no fund. The name is purely an historical misnomer.

              The fact that the NAO audits the scheme does not mean that there is a fund. The NAO audits lots of things where there is no fund. A surplus of receipts over outgoings (or vice versa) does not prove the existence of a fund.

              If you think that a fund exists, perhaps you would like to tell me where those funds are invested?

              • petermorris

                You say “The NAO audits lots of things where there is no fund.”. Do you really know anything about what you are talking about? I worked for the NAO and I know what I am talking about. You should get a visa and come back from La La Land.

                • HJ777

                  Yes I do know what I’m talking about. You, however, do not. I repeat that there is no fund – the ‘fund’ is purely notional.

                  The NAO audits (amongst other things) government departmental accounts. That does not imply that there is any fund associated with those departments. You seem to be under the mistaken impression that being audited by the NAO means that there must be a fund.

                  What did you do at the NAO? Clean the loos?

                • petermorris

                  There is a fund. I repeat, there is a fund. Real money goes into it every month from employer and employee contributions. It is accounted for separately from taxation. There is currently a cash surplus of over £29.2 billion as at the end of February 2013.

         and click on “latest market values…”

                  Really, I can’t help you any more with your NIF denial. If you insist on writing from a position of ignorance, all I can suggest is that you make an appointment with your local NHS Mental Health Service and hope that they can help you.

                • HJ777

                  You can repeat it as many times as you like. You can even stamp your feet if you like. There is still no fund. You are confusing an accounting exercise with a fund.

                  A cash surplus does not mean there is a fund. At present there is surplus of receipts vs outgoings in the NHS pension scheme. Does that mean there is an NHS pension scheme ‘fund’? No.

                  Previously being employed as a loo cleaner at the NAO does not mean you have any idea what you are talking about.

            • LB

              Define surplus for us Peter.

              is it

              1. Profit. ie. An excess of NI receipts compared to pension payouts

              2. Net assets. More assets compared to the liabilities.

              You have to realize that its 1. The assets are zero. You can’t make an asset by owing yourself money.

              On the 30 bn. How many months payout of pensions is covered by those IOUs?

              3. How much does the state owe for pensions? Are you disputing the 5,010 bn (2 years old – now 5,300 bn) figure from the ONS?

              • HJ777

                He really doesn’t understand the difference between a notional fund and a real one.

                • LB

                  I know.

                  However, I do have some sympathies with him. The government uses language to deceive.

                  “Pay as you go” is one example. You might think you pay for your pension as you go along in life. In fact it means you pay and the money goes.

                  “Surplus”. That really means profit. The government takes in more money in NI than it spends in pensions. It’s profiteering. There’s also a big implication. If its taking more money in now, at some point in the future, it will flip. The current contributors will want their cash back. ie. It’s building up a debt.

                  “The fund has assets”. You can’t create an asset by writing yourself an IOU

                  “The fund is massive”. Implication being that there’s more than enough cash to pay for the pensions. However, its just a few months of payouts.

                  “We can always print money to pay / states can’t go bankrupt”. Of course they can. Look at Greece. Argentina. Printing money cannot inflate away a pension that’s linked to inflation. You can only get out by defaulting.

                  “The state pension is welfare”. An insidious one this. If its welfare, then it will be means tested. That’s the plan. Watch the news and you will see that meme being pushed. You’ve got it with the rich will be denied all services meme going around too.

                  “The state should treat future taxes as an asset” This is reasonable. Morally suspect, because its a serf/slave owner mentality. However, if you do that, you have to also put down the cost of maintaining your serfs. The net cashflow then gets booked as an asset or liability. Oh dear, citizens of the UK are a liability. We cost more than we produce, hence a deficit.

    • 2trueblue

      Which government? It took them 13yrs to build the foundation for this. What a great job they die. Thanks Liebore.

    • Jonathan Lodge

      have you still not realised that is all that brown and bliar did? The FTSE 100 was lower when bliar left office than when he started.

      • petermorris

        FTSE 100 May 1997 4,445 – FTSE 100 May 2010 5,845 – that looks like an increase to me. Anyway, it is not necessarily the role of government to keep the stock exchange in quids, is it? I thought that was up to the company directors who get paid all those bonuses for being so clever.

        • HJ777

          Nominally, yes. Inflation adjusted, no.

    • Polleetickled

      The next generations might be in with a chance when the nation accepts; Getting paid less per unit but working longer and retiring to a life of volunteering + support not one of lavish world cruises.

  • full time mother

    Oh sh*t

    • Makroon

      Oh Gawd ! It’s Power Point time again.
      When will Fraser ‘fess up’ that his 2012/13 special – “spending will be even HIGHER this year, we will all be murdered in our beds !” was just another piece of journalistic rubbish ?
      Some time around May, when the revised figures come in ?
      Scanning the red book, the salient fact is just how dodgy and subject to revision all these estimates are (re-emphasised on practically every page).
      e.g. the positive effect on exports of the last two devaluations (1990s and 2008/9), were only picked up years after the event. They suspect the same might be true this time.
      Interesting to see how close to 38% of GDP tax revenue assumptions stay, all the way out to 2018.
      There is a 70% chance (according to the OBR) that the debt maximum will be reached in 2017/18, but a 50% chance that it will be reached a year earlier.
      Fun stuff econometrics ….

      • dalai guevara

        oh sh*t

Can't find your Web ID? Click here