‘Labour plans have a £27 billion black hole,’ says the Sunday Times, quoting analysis from George Osborne’s Treasury. If true, that’s the first piece of good economic news we’ll have heard from Labour. Osborne’s black holes have been way, way bigger – well over £100 billion so far. In his excellent new book about journalese, Robert Hutton offers this definition of black hole:
‘A point in space so dense it creates a gravitational field so strong that not even light can escape. Or, in newspapers, a gap. Especially in finance, where it typically refers to any funding shortfall over £1 million.’
Parties love casting a slide rule over each other’s policies, declaring that they don’t add up and use phrases like ‘black hole’. But that was back in the days of balanced budgets. George Osborne is not so keen on them now. He has torn up his plan to abolish the deficit, and offers no date by which he’d balance the books. His published plans run to 2017/18 and even then, he proposes a deficit – sorry, a black hole, of £43 billion. So if Labour could reduce it to £27 billion, it’d be a marked improvement.
Yes, Osborne inherited black holes. But crucially, in office, he decided to make them bigger. The below graph shows what he has done:-
The Conservatives are in a rather weak position, given that the government is still borrowing like drunken Keynesians – each day creating black holes big enough to swallow a Klingon army. It’s tempting to try this attack line anyway, though, because so few people actually realise what Osborne is doing. Polls show that between 6 per cent and 12 per cent of us realise that he is pushing up the national debt. Perhaps this is because ministers (and the Chancellor himself) keep telling us how they are ‘paying down’ or ‘dealing with’ the debt. Here’s the Prime Minister, earlier this year:
The Conservatives have become intensely relaxed about multi-billion pound black holes, while taking sternly about how dangerous they are. What I suspect this dossier means is that the black hole would be even darker under Labour, but the Tories want to give the impression that there would be no such instability with them. If only this were so. The choice in 2015 will be a depressing one: would you like your black hole red, blue or yellow?
The Tory attack on Labour today is on the premise that such black holes are destabilising. ‘It’s exactly the kind of something-for-nothing economics that got us into the mess in the first place,’ says Sajid Javid, the estimable Treasury minister. He’s quite right. But I’d prefer that Treasury officials spent more time worrying about their black hole, and less time worrying about Labour’s.