I have been reading the Sunday papers about the economy and wonder why I bother to. Several of them rightly condemn the government for borrowing too much, but they all use Ministers’ own figures in the press releases and budget statement rather than reading the much larger and doubtless more accurate figures they had to put out in the small print of the budget book.
They tell us brrowing will reach 8% of National Income next year. Wakey,Wakey. The PBR book shows the government is already borrowing more than 10% of National Income this year. You can’t leave out all the borrowing to buy banks and bank shares, as the Chancellor did in his misleading presentation. The Chancellor said he would borrow a large £78 billion this year. His supporting book says it will be an eye watering £157 billion. Why can’t journalists report these simple and worrying facts?
If Economics editors and Business leader writers can’t be bothered to read the detailed 200 plus pages of the PBR they could at least read this website to avoid these howlers. They should know by now you cannot trust Ministerial figures.
November 30, 2008
I was reading another blog this morning about the PBR, and I wondered what the effect of the changes in National Insurance which are planned for later years would be. Specifically, I was looking at it from an employer’s point of view and I wanted to know how much it would cost to put £30,000, £50,000 and £100,000 into an employee’s pocket as net take-home pay. I gave up after half an hour of trawling the Inland Revenue and Treasury websites and digging out the papers from Tuesday.
It’s clearly a deliberate policy, and has been for years, to obfuscate true tax levels. It’s the same principle that’s used by retailers – and especially, say, airlines, who have zillions of different prices so that a low headline fare can be advertised which will bring in passengers who end up paying much more. For governments, it’s the old saw about plucking the goose to get the maximum number of feathers with the minimum of squawking. It really is disgraceful that the table of 2007/8 and 2008/9 NI rates on the Inland Revenue website has no less than 67 bits of information in it – some of which are percentages, some pounds per week, and some pounds per year. You then need to build a spreadsheet to work out the effect – not a hugely complicated one, but it takes half an hour or so to put one together which gives the answer I was seeking, even if you can find the figures for later years (which I couldn’t before I gave up).
So although I agree with your complaint about lazy journalists, I think the government bears more than a share of the blame – not just because Labour fib about figures as a matter of routine. The whole tax/Treasury culture is to complicate and obfuscate. A real priority in Conservative policy has to be to simplify matters. Apart from anything else, we as taxpayers are entitled to understand easily just how much of our money is being taken by the state. It might encourage us to complain more, which is surely a good thing!
November 30, 2008
What stops the Conservatives taking out a 1 page advertisement in a couple of newspapers and listing a few accurate statistics about the economy that we should expect our media to get right?
It is infuriating that the media are so easily led. The country is been sleep walked into a gaping chasm and nobody is shouting about it.
November 30, 2008
Off topic : All the links on the right hand side under the heading "Conservative Party Economy News" appear to be broken.
November 30, 2008
I hope you will send an edited version of this entry to the letters editors of those newapapers that said it. I doubt they will publish it but you never know. If you mention it here we can all look forward to seeing if they do.
November 30, 2008
Because they are lazy, used to being spoon-fed and simply regurgitate press releases with some additional comment. It seems investigative journalism is dying.
November 30, 2008
Thank you for this posting. The media has somehow become compliant; they are disseminators of information rather than reporters/investigators. It follows that if the conduit from Parliament to the people is broken by the media, then the people will only have a skewed or biased view.
Political parties who curry favour with media owners in order to spin a line to newspaper readers would, in an ideal world, not have a look-in. In an ideal world, people would take an active interest in issues which affect them and their neighbours, and be able to make up their own minds about who should have the privilege of representing them in Parliament.
Sometimes I wonder why you bother too, but I'm grateful that you do. Head and brick wall spring to mind.
November 30, 2008
Actually, out here, it is extremely confusing reading all the reports. We have absolutely no idea, generally speaking, how much is being borrowed and therefore it is possible for the Chancellor to say that we will soon have repaid our present, very modest borrowing and be ready to invest again.
Moreover, until I started reading this blog, I had absolutely no idea of the difference between billions, millions, trillions and squillions.
All this percentage stuff is very confusing too. Percentage of what, exactly?
I notice that on Newsnight, quite often, senior government figures have the same sort of fog surrounding them as I do.
PS Now I am something of an expert in the gym – I like that! (Why does everyone seem to walk away when they see me, though?)
November 30, 2008
How does the NeuArbeit borrowing thus far compare to the Marshall Plan?
November 30, 2008
The use of "such-and-such a percentage of GDP" is particularly difficult to understand because it is never made clear whether they mean 2008 actual GDP, 2008 government estimate GDP, 2009 PBR wishful thinking GDP or 2009 likely GDP.
In the same way that large land areas are best explained in Waleses, heights in Nelson's Columns and lengths in double-decker buses, so the sums borrowed by government are best explained (as you have done) by NHSs and defence spendings, with Wembley Stadiums and hospitals being used for smaller sums.
I can't help thinking that the figures are now just so huge that any comparisons will be beyond the comprehension of most of us, I know they are beyond mine.
November 30, 2008
Most of the people who read this site are old enough to remember the Tory bias in the press in the 80's 90's. The Sun and in particular.The middle class creeping of Evelyn Waugh ("Splendid work") I often remember questioning his column as a boy. Just embarrassing if you where a Tory supporter.
November 30, 2008
On a day when we have government apparently corrupting the political process by misusing the police for political ends, it's worth wondering why the press is so compliant.
The answer is: corruption.
It works like this. The govt employs spin doctors (at taxpayers' expense) who have special access to information (also collected at taxpayers' expense. e.g. details of the budget). This information is then selectively given to journalists. To journalists and cash strapped newspapers, this information is a valuable as money and it encourages them to report the story positively.
Journalists who don't toe the party line are denied access to this information and their careers suffer as a result. Alas, this information only helps them in the short term as they readers gradually desert them for less biased information sources such as blogs. This makes their employers even more cash strapped and so makes them more vulnerable to corruption.
This simple answer is to cut the government PR budget by 99%. It would save millions and make the country a better place. A win-win!
It might also be pointed out that the practice is illegal. The Prevention of Corruption Act 1906 makes it an offence to bribe people (which is what this selective leaking to journalists is).
November 30, 2008
Who bothers reading the dead tree press thesedays anyway? bloggers are far more influential today in my opinion. Yes Baz I am old enough and ugly enough to remember when it was the Sun "wot dun it" – I also remember years of BBC anti conservative bile and labour bias which is still going strong today.
November 30, 2008
Don't worry, we'll just be forced to pay and pay for Gordon's mistakes.
December 1, 2008
Bazman – come back when you've sat your GCSE's, and learned how to spell and fact-check.
December 1, 2008
It would not be politic for John Redwood to make a more accurate assessment for next year's borrowing requirement. Correcting Brown's wrong declaration of his borrowing level for the current year is service enough for one blog post.
But if 10% of GDP is the current level, as JR declares it to be, the next twelve months will probably see around a 10% of GDP collapse in government revenue streams. A near doubling of the PBR to about GBP 300 plus billion is likely, at which point the dire straits into which Britain has been navigated by Brown in his 12 years as Chancellor and Prime Minister, will really hit home.
Anyone looking at our signature on the Maastricht Treaty where we committed to Euro Convergence Criteria, which specify borrowing of no more than 3% of GDP in any one year, please laugh now. We could be near to 20%.
Once the world's money markets see that this is the real position, the GBP will be heavily sold in a second rush. I don't expect John Redwood to write this side of the story as he is too patriotic, and wouldn't want to be associated with causing a run on the GBP.
But at some point the full horror story will spill.
December 1, 2008
It is quite true that journalist are lazy and happily reproduce ready prepared news releases. I have seen this work and have provided material for journalists at a local level which was happily published as if written by them.
The same process works with the reporting of global warming and carbon emissions. We now have science by press release and all global warming bodies have prolific and professional Press departments.
December 1, 2008
Well, clearly Mandelson is earning his six-figure salary and is spinning away ungracefully.
And am I right in thinking that this 10% borrowing figure EXCLUDES all the Government's PFI liabilities?
Reply: Yes, it is just one year's extra borrowing by selling gilts!