Labour did not overspend in office. So why do Labour’s leadership candidates keep saying so? | Notes from a Broken Society

Perhaps the most depressing aspect of the Labour leadership contest is hearing the candidates acquiescing in the myth that Labour in office overspent – and, by implication, accepting the Tory framing that Labour crashed the economy.  Of course it is more nuanced than that, but the outcome of the recent election shows that this is not a debate in which nuance plays much part.

The simple fact is that Labour did not overspend.  In fact, as a percentage of GDP, New Labour spent less than Margaret Thatcher – an average of 41.5% of GDP against 44.2%.  And in fact that figure hides the fact that after the 2007/8 crash, with the economy contracting viciously and rapidly, public spending as a proportion of GDP inevitably rose.

Moreover, spending is only one aspect of a deficit – you also need to consider taxation.  And, again, Labour taxed less than Thatcher as a proportion of GDP – an average of 37.5% of GDP as against 42% under Thatcher. And, by 2007, public debt as a percentage of GDP was falling.

Source: Labour did not overspend in office. So why do Labour’s leadership candidates keep saying so? | Notes from a Broken Society

7 thoughts on “Labour did not overspend in office. So why do Labour’s leadership candidates keep saying so? | Notes from a Broken Society

  1. Steve Grant

    It strikes me that the only a Labour leader candidate stating that Labour dudnt overspend whilst in office was Yvettev Cooper….Says a great deal about the other candidates doesn’t it.

    1. Shaun-127

      I agree Steve, but it says more about past Labour party policy and the power of Britain’s media. Quite how we got ourselves into the current mess I’m not that certain, but my instinct is to get the truth out and to fight to make it known to the electorate. That noted, it’s going to be very difficult, and so risky, to achieve. However, to not to do so is to hand the Conservatives victory over one of the major factors voters consider when choosing who to vote for. Finally, we need to keep our belief in the very likely event that the Tories will be going into the next election with their economic policies having proved to be very defective. How are we to exploit that, or to prevent failure being spun once again as a Labour party failure, if what we’ve been saying up until that point is that Tory economic policy is best but needs to be applied with more compassion. We could be ceding not only the writing of economic history but the future too (Orwell’s Winston was acutely aware this can be achieved).
      ShaunT

  2. Marjorie Arnold

    i`v said all the way through the election – i cant understand why they didnt nail the lie and also point out that the tories are borrowing more than any labour government in history. margaret thatcher was the same constanly telling us we coudnt continue to live beyond our means and she borrowed loads as well

  3. Ian

    You do wonder about this, it’s so odd. Why would Labour collude in their own downfall? As ever, you need to ask yourself who gains? All it does is divert blame from the real culprits, that twerp Tristram Hunt even went further than the usual staying silent tactic on Question Time, he expanded on what they supposedly did wrong in detail; something about not saving enough during the good times.Who does that? There is absolutely no need and with borrowing costs so low it makes no difference anyway – borrow and spend or save first then spend. Given the state of the country – the NHS and schools in particular – it would have been silly to save just in case when there is so much to be done.

    The only ones to gain from Labour’s weak, supine attitude are the Tories and the economic system as a whole and the banking sector in particular. I know Labour were inept and offered very little but would they really help the Tories like this?

    So that leaves the bankers and the economic system. Labour were protecting the country’s vested interests. They took a fall to keep people misguided.

    I hope they think it was worth it.

  4. The Infamous Culex

    What this seems to say about the candidates for the Labour Party leadership, is that they are mostly pragmatists.

    Ever since the mid 1970s, the Tory Party has worked on the basis of the Big Lie: think of an untruth so outrageous that a reasonable person would believe that it might actually be true, and to keep repeating it even after it has gained currency, safe in the knowledge that the lies will generally be believed as true.

    If any Labour politician dares to state – truthfully – that Labour did not overspend, the loud-mouthed Tories will merely bray that Labour is still in denial and that, if ever elected again, they will “overspend” yet once more. Not even presenting the statistics will disprove the Tory Big Lie, nor will asking the Tories which of the banks they would have preferred to have been allowed to fail.

  5. Maria

    they want to just win votes now, out go their morals. which is why if they carry on this way I’m no longer going to vote for them in the future. I want a party that believes in morals and making the right decisions. But I don’t believe just taking money away from people makes them better, nor will endlessly giving people tiny amounts lift them, they need the right support, whether in work or education or financial support and it needs someone moral to assess people properly so they will not be afraid. It needs some one who cares about the nation’s people as opposed to a government that only thinks of money and not much else.

  6. Mr.Angry

    Why the hell Ed didn’t confront these claims is beyond me or was this the plan? I still remain bewildered.

    Given the amount of unreported protests around the country since the election is a major statement in itself.

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