Coffee House Specdata

Budget 2014: the six scary graphs

19 March 2014

Listen — Fraser Nelson on what the budget means:

Yes, it’s a recovery. The good parts of the Budget will be all over the media right now – the Treasury is very good at broadcasting its achievements. We’ll cover them too, in a bit. But for now, in the interests of balance, here are some graphs that you won’t find in the Budget, using data taken from its small print.

1. The Deficit – an improvement since last year’s forecasts (thanks to higher growth). But still far adrift from what Osborne promised initially (in yellow, below).

Screen Shot 2014-03-19 at 13.05.03

2. Osborne fails his own debt test. The Chancellor congratulated himself for sticking to the course. “We set out our plan. And together with the British people, we held our nerve.” Not on debt, he hasn’t. In his career as Chancellor, Osborne has set only one target in stone: that the debt/GDP ratio would fall between 2015/15 and 2015/16. He gave up on this a while back. The OBR is still required to judge him each year on whether he’s likely to hit this target. Part of the reason for setting up the OBR was that it would act as bad cop, lambasting the Chancellor if he gave up on his promises. Instead, its own small print says only “The government is still on course to miss its target”. The OBR says the debt ratio will rise (by 1.5 per cent) over that period.


Osborne’s original plan is in yellow. The published Labour plans he once disparaged are in blue. His current plan now is in red.

Screen Shot 2014-03-19 at 12.58.04

2. National Debt. Continued. You can see the effects on the whole debt pile here. Osborne’s still borrowing more in five years than Labour did in 13 – in nominal and real terms.

Screen Shot 2014-03-19 at 14.23.12

3. Yes, there are upgrades. But downgrades, too. The below compares the growth forecasts – the OBR has upgraded this year, but downgraded in later years. It’s a wash.

Screen Shot 2014-03-19 at 12.51.25

4. And it’s still the worst recovery in history The 2.7 per cent growth for this year comes after pretty bad growth. Put into historical perspective, Britain is still midway through the worst recovery in our history.

Screen Shot 2014-03-19 at 13.23.365. Only Italy has had a worse recovery You’ll have heard George Osborne listing all the counties we outpaced in the last quarter of last year. But look at the last few years, and how do we compare? Don’t ask…

Screen Shot 2014-03-19 at 21.57.26

6. Earnings – 15 years of hurt Yes, you’ll hear on the TV that earnings are expected to rise a bit more than inflation. But it depends which inflation: RPI or CPI? The below graph shows that even in CPI, it’ll take 15 years for the average wage to recover to where it was. You may get a penny off a pint, but the rest of your shopping will be as expensive as ever.

Screen Shot 2014-03-19 at 14.39.38

And finally, jobs – a non-scary graph. It is the one undiluted good news story of the Budget.Screen Shot 2014-03-19 at 14.41.39-2

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  • e2toe4

    The need to protect property book values commercial/retail AND domestic (to protect the banks) itself establishes a condition where Help to Buy is an easier decision to make.

    But the productivity gap/lack of investment is directly related to the way property obsesses our country and sucks in productive capital.

    It isn’t rocket science… as the ‘recovery’ is extremely fragile…as business has spare capacity, then instead of investing in ones own business, one invests in property. Especially as the government are going to feed fuel onto the present boom…

    In effect like a supernova eating itself the economy is blazing away right now in one last burst…. One doesn’t need to be a communist, socialist or general leftie to think the pre-election giveaway (in terms of trying to give voters with property a feelgood factor) is just plain wrong.

    Certainly the ‘weakest recover ever’ graph is easier tro explain if the above is anywhere near accurate.

  • E Hughes

    At least do your top button up and tuck your shirt in.

  • Tom Tom

    You would expect incomes to collapse over coming decades – the more The State consumes the less for the rest

    • ronadmcgonad

      Yes, there’s only a fixed amount of money since the government doesn’t issue the pound and spend it into existence.

  • Shinsei1967

    I really don’t know why Fraser constantly keeps referring to borrowing projections set in May 2010.

    That was before the oil price shot up from $70-80 to $120 thus pushing up inflation and cutting real wages. That was before the Euro crisis set off properly with the Greek crisis and its impact on business and investment sentiment.

    The world was a very different place back in early 2010. So why keep assuming that projections made then are of any relevance subsequently.

    • HookesLaw

      Nelson painted himself into a corner years ago and is unwilling to get the soles of his shoes sticky.

    • Makroon

      Fraser Nelson, exactly like his dim journalistic colleague Kevin McGuire, still can’t get his head around the difference between a “forecast” and reality.

      • the viceroy’s gin

        …or maybe he can, and realizes the value of them and wants to show you that value, particularly those made by that clueless muppet Boy George.

        • Makroon

          Oh gin swilling expat one, just for your info – the forecasts are made by the OBR (not Osborne), and QE in the UK ceased in Summer last year.

          • the viceroy’s gin

            But your Camerluvvie buddy is flashing them around, lad, and apparently they are as useful as everything else he flashes around, which you seem to be just now finding out, finally. That’s the purpose of shoving that past rot back in you socialists’ faces.

            Oh and laddie, QE “ceases” when the illegitimately purchased debt is restored to the marketplace, not held by the “private” BoE. Of course, it’s not “private”, as all but you socialist muppets understand, and it will do your socialist Camerluvvie bidding and refuse to do what it previously pledged it would, and sell that debt.

            But it’s “private”, sort of like the OBR is not under Boy George’s control. Right then.

            Fortunately, your Camerluvvie buddies will soon be expatted to Brussels, with the rest of your buds.

    • Mike Barnes

      Because the whole argument at the time was Tories would be prepared to cut the deficit in one 5 year term, no matter what, and Labour said it couldn’t be done. Labour would half the deficit in 5 years, giving a bit more breathing room, in case negative external shocks happened.

      The Tories abandoned their deficit plan. A good thing no doubt, there’s no use pressing on causing misery, but they can’t pretend their original aims have been successful.

      Lets not even start judging Osborne by whether he kept the AAA rating (as he once asked us to), or looking into his export led recovery etc etc.

      • HookesLaw

        There was no ‘no matter what’. And the tories promised to cut the structural deficit. You cleary are to say the least confused. Following the Euro crisis the govt chose to let the normal cyclical regulators do their thing rather than squeeze the econom y mor for the sake of a target.
        ‘A boost in UK exports as well as rising UK sales
        has driven strong growth in the manufacturing sector, according to a
        new report’

      • Shinsei1967

        Alternatively, a less partisan explanation would be that Osborne said that in May 2010 “based on independent current growth expectations” we will eliminate the deficit in 5 years. And using the same forecasts Labour said they would do it in seven.

        As it happened quite a bit happened to cause those forecasts to be far too optimistic. Euro crisis, high oil price and a reduction in North Sea oil production. All of which were out of Osborne’s control. As the OBR (and IMF/OECD) points out it was inflation/EU crisis that caused 2010 forecasts to be missed and not austerity.

        The AAA pledge was a stupid hostage to fortune. However if Osborne had instead said he wanted to keep UK borrowing rates as low as reasonably possible then he successfully achieved that.

        • the viceroy’s gin

          …maybe he should just file an errata forecast and claim that was what he actually said back then. That would be at least as coherent a process as anything else the muppet has done during his flounderings.

        • e2toe4

          I agree with you on this…

          On a connected aspect I do feel that politically the failure to tackle the banks (difficult I grant) or even do as the Americans do and drag a couple of examples into court in boilersuits and plastic wrist restraints…God knows there has been massive fraud throughout the financial sector…… has undermined the ‘We’re all in it together’ message.

          That WAS a good slogan..but most people now feel it’s ‘WE’RE all in it together…but you are not.”

          This is where Labour’s attack on the Bullingdon Club rich kids really hits home…because there are no really prominent examples of corporate greed, especially in the financial sector, being hauled into the courts (Of course there have been one or two..but no really prominent ones).

          I do think that if that had happened the ordinary person would be less ready to accept the ‘Rich Kids’ taunts as given facts…and the polls would be reflecting a better picture.

          Get the ‘numbers’ wrong and people can forgive that–as you say forecasts are forecasts and most ordinary people treat ALL of those as so much noise most of the time…but get the surrounding politics wrong as well and people then examine the stats far more intently (especially when as now the realities of most people’s life do reflect that otherwise thuddingly banal ‘cost of living crisis’ message being stuck out by the opposition.

      • Makroon

        Labour troll rewrites history again ….. yawn.

        • the viceroy’s gin

          …hey, all you LibLabCon clones do it, lad.

  • Denis_Cooper

    And the differences between CPI and RPI are because … ?

    • the viceroy’s gin

      One is a lie… and the other is a really, really big lie.

    • BrianT

      CPI doesn’t include housing costs for a start

      • Denis_Cooper


  • ohforheavensake

    First thing- a balanced budget isn’t an automatic good. If you look back over the history of public debt, you see there’s no automatic correlation between debt and growth.

    Second thing is: employment isn’t a non-scary graph; not once you factor in underemployment, wage levels, and the number of people who no longer appear as unemployed (because they’ve been shufled on to government schemes with a low success rate).

    • rtj1211

      When you are talking about public finances, you might do well to correlate ‘growth’ with ‘growth in tax receipts’. Amazon and Apple grow very well thank you, and they do so quite a lot because they avoid their societal obligations through offshoring.

      Public sector financing is entirely dependent on a social contract adhered to by all.

      When the big corporations think they are above the law or distort it so much that ti feels like they are, it doesn’t matter how good GDP is, public finances get stuffed.

    • anyfool

      A balanced budget is not an automatic good, yes it is, this is typical socialist nonsense where debt becomes good and the profligate mismanagement of Labour becomes the norm.
      Lets all change to where black is white and 1 and 1 add up to whatever fantasies your twisted logic can invent.

      • ronadmcgonad

        Yeah, it’s not like government debt is equal to the amount of government credit that has been created and given to the public in the form of money. Since government debt is bad and must be eliminated, we must also eliminate government currency.

    • the viceroy’s gin

      Debt isn’t an automatic good either, much as the LibLabCon clones all seem to disagree.

      But yes, employment levels are more complex than that top line number, as you mention. Figuring immigration, among other variables, the stated numbers are not very impressive.

  • HD2

    Red Book: Interest on National Debt = £53 billion 2014/15

    So, by 2020, when the Budget is balanced and interest rates are back to normal levels, that’ll be in excess of £150 billion.

    We’re stuffed.

    • McRobbie

      We’ll be even more stuffed if labour gets their hands on our money again.

      • HookesLaw

        Tell that to Nigel Farage.

        • the viceroy’s gin

          …no, tell that to you Camerluvvies, voting for the incompetent fools running up all this debt.

        • Alexsandr

          the tories should withdraw in the 2015 election. save splitting the UKIP vote (Grin)

    • Kitty MLB

      How much worse would it have been if the mindless Labour fools
      and their chanting serfs were still in charge.
      Thank God for George, and that we do not have Balls.

    • HookesLaw

      No we are not stuffed – we have been droipped into a heap od shte by Labour and we are digging ourselves out. Inevitably the smell will linger. There is no magic perfume.

      • the viceroy’s gin

        …the smell will linger because you socialist Camerluvvies photocopied Darling’s budgets, and even raised spending in fact, after your IMF masters told you to do so.

    • ronadmcgonad

      Yes, the UK is going to run out of the currency they create.