The ‘Labour overspent’ lie debunked – again

It’s astonishing. Right-wing politicians, journalists and members of the public are still – still – pushing the myth that the financial crisis and recession of 2008 onwards was caused by the last Labour government overspending, being “profligate”, “not fixing the roof while the sun was shining”.

This Writer heard it twice on Thursday evening alone – from the Tory candidate at a local hustings event (although, bearing in mind that Brecon and Radnorshire’s Conservative candidate Chris Davies has all the intelligence of a farm animal, this is not surprising) and on the BBC’s Question Time, from William Hague (who was probably one of the Tories who invented this particular tall story in the first place).

Professor Simon Wren-Lewis wrote illuminatingly on the subject in his Mainly Macro blog, saying that the Coalition government wanted people to believe a myth that it rescued the economy from an impending financial crisis, but this could not be squared with the fact that the very large government budget deficit in 2010 was largely the result of the recession.

Therefore, he stated, it was important for the Conservatives and Liberal Democrats “to push another explanation for the large deficit: that it reflected the profligacy of the previous government.

“Economic journalists know full well this is a myth. Yet it is a myth repeated on countless occasions by the coalition parties, and by journalists working for the partisan press. On one occasion one of these journalists tried to rubbish a post where I wrote it was a myth, and I hope learnt to regret the experience.”

As ever, with a big lie (and here on Vox Political we have seen this very often in regard to the SNP’s claims) there is a nugget of truth. Here, it is the criticism that Gordon Brown was not as prudent as he might have been in his pre-recession budgets. Professor Wren-Lewis writes: “That memory is both correct (both the IFS and NIESR made that criticism) and the criticism is valid… This is the half-truth that sustains the myth.

UK public sector net debt

“But mild imprudence is not profligacy. We can see that by looking at another chart, for the debt to GDP ratio. Profligacy would imply a rapidly rising ratio, but this ratio before the recession (37% in 2008) was below the level Labour inherited (42% in 1997), and below its fiscal rule figure of 40%. No profligacy there.”

More prudence would not have helped because, “as Vicky Pryce, Andy Ross and Peter Unwin state in their book ‘Its the Economy Stupid: Economics for Voters’ (which I happily recommend, and which in its initial chapters covers much of the ground of this series): ‘The elimination of the UK’s structural deficit [under Labour before the recession] would not have been even a sticking plaster in the face of the haemorrhaging of the finance sector’s jugular’.”

The professor also adds that the Tories argued for less financial regulation before the collapse, and opposed Labour’s measures to moderate the recession in 2009.

In addition, this blog can add a recent response to a commenter, which ran thus: Labour didn’t ‘recklessly spend money we don’t have’ [as the commenter had claimed]. Labour ran the economy very well – as reports from such leftie strongholds as Oxford University have shown.

The global economic crisis that started in the US subprime housing market affected the UK deeply, and the Labour government of the time was forced to take action to prevent a run on the banks that would have deprived most people in the UK of their bank account savings – including people criticising Labour now.

The narrative about Labour profligacy is a fairy tale made up by the Conservative Party … in order to fool voters into supporting that party so it could win the 2010 election. Even then, it didn’t work and the Tories had to go into a coalition with the Liberal Democrats. They anticipated this, and hedged their bets by making a deal with the Lib Dems in March 2010, two months BEFORE the election (this information is from Five Days To Power, a book on the subject by Rob Wilson, Conservative MP for Reading East).”

The issue is not Labour profligacy; it is Conservative (and Liberal Democrat) dishonesty.

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  1. Florence April 25, 2015 at 4:53 pm - Reply

    It’s also weird that Darling was the chancellor, not Brown, for the end of the period being lied about. When Brown was chancellor he was regarded internationally as one of the most able, and spoke at many global leaders meetings and summits. So what really rankles for me is not just the enormity of the lie, but the character assassination of a man who was world class. He was an intellectual, and a giant compared to the idiot currently in no 11. Oh yes, and his by-line was “prudence”!

  2. Stephen Bee April 25, 2015 at 4:58 pm - Reply

    Whats astonishing as Micheal Meacher has rightly perceived in his own blog…is Why are Labour NOT decrying and Disproving the Conservative Lies? WHY?

    • Mike Sivier April 25, 2015 at 5:04 pm - Reply

      Meacher does it, Peter Hain has done it, but beyond that I can’t recall much of it going on. I have no idea why Labour politicians aren’t hammering that point home at every opportunity.
      If any Labour politicians are reading, perhaps they’d care to explain?

      • The Infamous Culex April 25, 2015 at 5:35 pm - Reply

        It is surely a matter of credibility, as the Tory riposte would be that, of course, a Labour politician would say that they were not responsible and, even when the statistics are presented to prove the point, the Tories will continue to bray their lies.

        The Tory Party is surely proof of the old maxim that empty vessels make the loudest noises.

      • fathomie April 25, 2015 at 10:17 pm - Reply

        One does wonder? It has been argued, with some force, that parties in opposition sometimes do not want to win elections. They would rather wait until Public opinion has swung their way and then put full force behind their campaign – and leader. Labour did this between 83 – 92′ when they fought out their internal battles. Sadly, New Labour emerged victorious both in party and hustings terms. The Tories had neither the policies nor the leader between 2001-2005 and knew they weren’t going to turn it around. Hague couldn’t win an egg and spoon race, and the only policy that caught public attention was the new ‘immigration’ assault started in 2001 with the ‘bogus asylum seeker’ bandwagon. Once Cameron arrived though, the Tories went for the jugular. It says a lot for the Tories inability to put a decent policy forward, that they still didn’t win outright – even with Murdoch and co fully behind them.

        Or perhaps it simply that they know the public is not going to believe them? As DC’s all time number one political hero once wrote in Dave’s most read work, the bigger the lie, the more people are likely to believe it. And Cameron and the Tories have told some real whoppers over the last six years.

      • Shaun April 25, 2015 at 10:34 pm - Reply

        Mike, I just mentioned that point on the mainly macro blog. I also asked why Labour is silent on this issue. My guess is that the Tory media did such a hatchet job on Brown and that Labour government that it’s thought better not to mention his name. My own opinion on this is that in protecting, as those in power thought, the City of London during the crash Labour made a fatal mistake. It should have told things as they were and went for inefficiency of the system that caused that crash rather than protecting it.

        • Mike Sivier April 25, 2015 at 10:55 pm - Reply

          I don’t buy that – that Labour thought it’s better not to mention Gordon Brown. Look how he was brought into play during the Scottish referendum campaign. Far from being ashamed of him, he was considered one of Labour’s big guns (rightly or wrongly is debatable considering the fallout, but the attitude to him was clear). So I don’t think that’s right.
          But that leaves us coming back to the central question: Why doesn’t Labour put the record straight?

  3. The Infamous Culex April 25, 2015 at 5:42 pm - Reply

    Please do not compare Chris Davies to a farmyard animal, as that is grossly unfair to farm animals who are unable to defend themselves against such calumny..

    • Mike Sivier April 25, 2015 at 5:54 pm - Reply

      I can’t compare him to anything human, though.

  4. Rupert Mitchell (@rupert_rrl) April 25, 2015 at 8:35 pm - Reply

    I thoroughly endorse all the above comments and also find it impossible to understand why the rest of the Labour party leaders have not spoken out to correct this lie. The instigators of the lie are of the type that think that if you repeat a lie often enough then listeners will believe it and it is probably true which is even more reason for the Labour party to continually and strongly deny it.

  5. Andy April 26, 2015 at 1:00 pm - Reply

    I did not catch the comment from Hague but I think Harriet Harman was also on the panel. Did she challenge him on this?

    I cannot help but wonder whether some members within the Labour hierarchy have a little bit mor background information which is unknown to the likes of Professor Wren-Lewis and which prompts them to remain silent.

    It is a thought for which I have nothing to offer to substantiate it…but it does seem strange that for five years it has been allowed to run and run.

  6. Michele Witchy Eve April 27, 2015 at 7:40 am - Reply

    Does anyone else get the growing impression that none of the major parties seem particularly keen on winning the next election? Do they know something we don’t? Perhaps the state our country is in (and the rest of the globe) is beyond the control of our governments and no-one wants to be the first to have to admit it? It would explain why Labour seems to have missed so many open goals. Please tell me I’m just being paranoid again.

    • Mike Sivier April 27, 2015 at 9:21 am - Reply

      You’re being paranoid.
      However, now I feel paranoid too.

      • Michele Witchy Eve April 27, 2015 at 7:07 pm - Reply

        Glad of the company Mike, but wish it were better circumstances.

  7. Andy April 28, 2015 at 8:23 am - Reply

    I see Nick Clegg raised the issue again over the weekend about the Labour party being “too bone-headed to apologıse for the economıc mess they created”……but nobody has countered it, agaiın.

    It does make me wonder iıf there iıs somethiıng iın the woodwork that iıs not in the interests of the Labour hierarchy to have made public; I am sure I am not alone..

    • Mike Sivier April 28, 2015 at 10:47 am - Reply

      Clegg was just trying to divert attention away from the economic mess he and the Tories have created.

      • Andy April 28, 2015 at 2:39 pm - Reply

        See that Alexander also referred to the economıc mess the coalıtıon ınherıted and also a £37bn blackhole ın the defence budget…..and stıll no denıals, strange…

        • Mike Sivier April 28, 2015 at 2:44 pm - Reply

          It is strange, yes – unless of course you take the view that Labour believe these claims are beneath contempt and are simply not worth answering.
          I wouldn’t want to do that, personally.

  8. Malcolm Burt May 4, 2015 at 10:42 pm - Reply

    Great article as always & comments are also worthy of note.Yes the point could have been driven home by Labour more yhan what it has been.Sadly what is also coming back to haunt them is the famous note left for the incoming treasurer about there being no money left.

    • Mike Sivier May 5, 2015 at 1:00 am - Reply

      It was habitual for outgoing Chief Secretaries to leave a note for their successor, it was traditional for these notes to be humorous in nature, and it was also expected that these notes would not be publicised by either side. In making this note public, five years ago, the Conservatives and Liberal Democrats committed a gross breach of protocol. It would be disgraceful if they were to gain votes from such low behaviour.

      • Andy May 5, 2015 at 9:48 am - Reply

        Only following a similar disclosure by Jim Callaghan of the “Sorry ıt’s such a mess” message from Reginald Maudling in 1964, so nothing new..

        • Mike Sivier May 5, 2015 at 10:08 am - Reply

          Oh right, so the Tories did it first?

          Why are they complaining, then?

          • Andy May 5, 2015 at 10:22 am

            No – It was Maudling, a Tory, who left the message for Callaghan and Callaghan, who was Labour, who revealed it. To day, it is Labour who are complaining about the Tories using Byrne’s note or hadn’t you noticed?

          • Mike Sivier May 5, 2015 at 10:54 am

            Exactly – so the Tories did it first.

          • Andy May 5, 2015 at 10:56 am

            Did what first?

          • Mike Sivier May 5, 2015 at 11:01 am

            Wrote a silly note.

          • Andy May 5, 2015 at 11:08 am

            No idea who started the practice…my comment was in relation to your suggestion that disclosing the content of Byrne’s note was in breach of protocol…but you knew that, didn’t you?


          • Mike Sivier May 5, 2015 at 11:32 am

            Again, though, they would have known it was a breach of protocol of Callaghan had done it. I bet they complained then; hypocritical to do the same now.
            Whichever way you slice it, the Tories were in the wrong.

          • Andy May 5, 2015 at 11:54 am

            From memory it was laughed off by the Tories. Of course, if Callaghan had done it then it is hypocritical of the current Labour party to complain now over Byrne’s note and if it never was actually a breach of protocol, and I have never seen it anywhere to be shown as such, in the first place, the Tories were totally ın the rıght, anyway,

            You once told me to stop nit picking Mike….suggest you follow your own advice on this one!

          • Mike Sivier May 5, 2015 at 3:49 pm

            No, it was a breach – you’ve only made a claim that one had been made previously, which was nit-picking in itself.

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