1932 public spending

In 1932  total UK public spending was £1 397 million. If you adjust for inflation that is £82 887 million.

So as the UK government this year is spending £737 100 million, what is all this nonsense about returns to the 1930s?

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66 Comments

  1. alan jutson
    Posted March 21, 2015 at 4:41 pm | Permalink

    Clearly the 1930 ‘s claim by Labour is absolute nonsense John, as you had already explained a few days ago.

    Your post today makes comparison even more simple, and whilst we now have the NHS which we did not have in the 1930’s it just shows how government spending has rocketed over the decades.

    Given that the Government has no money other than that it takes from Taxpayers, it just shows how much taxes have risen, and need to still rise, if spending continues to increase.

    Why do your Ministers find it so difficult to nail this 1930’s lie. !

  2. agricola
    Posted March 21, 2015 at 4:46 pm | Permalink

    Just that, nonsense.

  3. Richard1
    Posted March 21, 2015 at 6:00 pm | Permalink

    It’s excellent that you have repeatedly made this point with such clarity, I think the Labour nonsense of a return to the 1930s has been exposed for the nonsense it is. It is slightly concerning though that the Conservative front bench hasn’t been more robust in defence. Nor of course have Labour spokespersons been challenged eg by BBC interviewers as to why they have been coming out with such drivel.

    • Wireworm
      Posted March 22, 2015 at 2:23 am | Permalink

      I seem to recall it was Norman Smith, BBC political correspondent, who first launched this canard on the Today programme. I rather admire Osborne for the way he neutralised it (by slightly raising his percentage target to the 2000 level). There’s nothing to stop him altering it again.

      On the matter of politics, do I detect Lynton Crosby’s influence in the way in which Cameron now replies to Labour questions at PMQs with employment statistics for the questioner’s constituency? Quite clever.

  4. JoeSoap
    Posted March 21, 2015 at 6:05 pm | Permalink

    Sadly they are indeed nonsense.
    That you are proud of spending money like water is equally sad though.

  5. ian wragg
    Posted March 21, 2015 at 6:14 pm | Permalink

    Congratulations John. Will you please convey my thanks to your leader and the idiot Davey as I see Killinghome Power Station, 900mw CCGT is earmarked to close as it is uneconomic.
    CCGT is some of the cleanest and cheapest power available if run at base load but due to the stupidity of the so called coalition energy policy it can only be run as frequency control to compensate for intermittent windmill power.
    Consequently E.ON are probably going to close it thus removing a further 2% of our generating capacity.
    We may not be at 1930’s spending levels but we will soon be at those levels of generation.

    • Lifelogic
      Posted March 22, 2015 at 5:54 am | Permalink

      Indeed, in the grip of an insane anti-science/Luddite religion. Does Cameron really believe in this or does he foolishly just think there are some marginal votes in all this fake greenery?

      The votes are in cheap reliable energy and real jobs.

  6. Robin Smith
    Posted March 21, 2015 at 6:31 pm | Permalink

    And what is the biggest effect of public spending. That is, who benefits most from it?

    The Property Owner.

    How much less would your property be worth if there were no roads running past it. No rail, schools and hospitals nearby. Zero?

    Then how much if free enterprise were not receiving business rates cuts and other tax breaks. How much less rent would they be able to afford me?

    Not to mention the ability for the unemployed and lowest paid to submit higher rents to me out of their tax payer funded welfare state.

    I’m not complaining about this at all. I own loads of property and laugh at the huge free lunch I get from it. I’m astonished more do not give up work and start investing in property. It’s the only asset that rises in value over the long term for this very reason:

    It’s subsidised heavily by the state. It’s always bailed out (mortgages) when the system collapses. And its tax free in the end because the tax liability on the capital gain is outstripped by the increase in selling price by miles. And all other assets fall in value relatively and are heavily taxed.

    So to be a property owner and not vote Tory should be regarded as quite insane.

    As always, yours,

    Robin Smith, Wokingham Constituent
    Developers Guide UK

    • Mondeo Man
      Posted March 21, 2015 at 10:23 pm | Permalink

      Robert..

      If you think that the welfare-to-landlord, property-bubble generated economic recovery can go on forever – and haven’t started selling off your portfolio while it’s at its peak – then it is you who are insane.

      Yes. You’ll be able to take rent forever but what it’s worth all depends on how our currency holds up.

      300,000 people of viable quality going out – 600,000 of unknown quality coming in, every year.

      I’m not voting Tory precisely because I don’t want us to become a nation of slum landlords and renter serfs.

      • Mondeo Man
        Posted March 21, 2015 at 10:27 pm | Permalink

        Robin – Sorry.

    • Edward2
      Posted March 22, 2015 at 1:06 am | Permalink

      You are stating we live in a mixed economy.
      People work and pay tax then the Government we elect, spends it on roads health education defence etc.
      I dont see how this virtuous circle is responsible for house price inflation.
      The state also gets lots of tax from homeowners eg stamp duty inheritance tax council rates etc.

      • stred
        Posted March 23, 2015 at 11:40 am | Permalink

        This idea that property investment and returns is somehow different from other sorts of business baffles me. The rental industry is treated differently from other investment in that landlords are not permitted the same tax allowances as commercial investment. However, they have to manage and maintain property and customers in the same way as other businesses.

        Public investment in transport, schools, hospitals and welfare also increases the income of retail, services and manufacturing. The state’s function is to tax one and provide the infrastructure. Unfortunately, much of this is wasted building projects in the wrong place or buying in the most expensive way.

        The return on rentals in the SE is around 4-5% if working well. To buy a property will cost a similar rate. Security is less if the bank is not paid. The tenant can rely on welfare, the owner will not, until homeless. The returns on shareholding are similar and the value also at risk and pensions are invested in these.

        We have all needed to rent sometimes and also need to have an income for retirement, given the lack of a decent state pension and the disappearance of private pensions through charges and tax. So why are landlords singled out as somehow parasitic, wheras pensioners and shareholders are fine citizens, and very often the ones pointing the finger? Perhaps it is the get rich quick latecoming show off investors and BBC property programmes which cause the criticism.

        • Anonymous
          Posted March 23, 2015 at 5:45 pm | Permalink

          Stred – It is different when a business is being subsidised by the Government and interest rates are being kept low.

          • Edward2
            Posted March 23, 2015 at 9:06 pm | Permalink

            Housing benefit is something individuals are entitled to if their income is below a certain level.
            It is not a subsidy to landlords.
            It is paid to charitable housing associations, churches and local authorities who rent out property to individuals.
            Rents charged by these groups are similar to those charged by commercial landlords.
            Why dont these other groups simply halve their rents and undercut commercial landlords?

          • stred
            Posted March 24, 2015 at 12:01 pm | Permalink

            Anon. What about the big food supermarkets- they borrow at low interest rates and half of their customers receive state benefits to help them pay the bills. BTL borrowing actually costs more than standard and there are no government guarantees such as the help to Buy up to £600k. BTL mrtgages receive no guarantee. Also, why is it that a majority of landlords refuse to accept tenants who need HB. Answer. Because they often don’t receive the subsidy since HMG decided to pay it directly to the tenant.

    • Gary
      Posted March 22, 2015 at 5:22 am | Permalink

      “property is always bailed out by the state”

      That will be your epitaph. Unless , of course you’re being ironic.

      As history shows, the bailout state is a socialist state and they always eventually collapse in a fiscal or currency crisis. Without exception. This one will be no different.

    • Hefner
      Posted March 22, 2015 at 8:16 am | Permalink

      “Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains all the while the landlord sits still. Every one of those improvements is effected by the labour and cost of other people and the tax payers. To not one of those improvements does the land monopolist, as a land monopolist, contribute, and yet by every one of them the value of his land is enhanced.”

      The words of a great radical: Winston Churchill.

      • Edward2
        Posted March 22, 2015 at 5:22 pm | Permalink

        Is land as an asset class worth any less than other asset?
        Its a fluid market where land and property is for sale just like any other goods and services.
        But I realise landlords ard the current fashionable villains at the moment.

        • Mondeo Man
          Posted March 22, 2015 at 8:02 pm | Permalink

          Edward 2 – “current fashionable villains”

          Well yes. When it’s well and truly subsidised by the government. Fed by mass immigration and theft from taxpayers – to impoverish their kids so much that they’ll have to use their pensions to bail them out with ‘bank of mum and dad’.

          Let’s hear no more complaints from Tories about subsidy to other areas of our economy then.

          • Edward2
            Posted March 23, 2015 at 8:48 am | Permalink

            You have to consider a situation where if there were no private landlords and the State took on this role, would the cost be any different.
            The costs of owning a house and maintaining it would be similar.
            The economic rent would be similar.
            If the State rented at subsidised low levels of rent a big loss would be made which the taxpayer would have to pay.

          • Mondeo Man
            Posted March 23, 2015 at 5:37 pm | Permalink

            Edward 2 – Plenty of young-ish people who wish to own homes are now locked out of the market despite earning good wages.

            So this non-ownership breeds a new generation of people with no incentive to be (let alone vote) Tory.

            Conversely we have the absured situation where the greatest beneficiaries or our pro-Eu, pro-redistributive, pro-mass immigration parties are the home owning, landlording Tories who have now been lured into voting for these un-Tory-like aims through massive subsidy, socially, environmentally and economically destructive policies.

            Without these policies NO. Housing wouldn’t cost nearly so much and with decent council housing stock (given as a reward for working in lowly paid jobs in cities) we wouldn’t need to import Eastern Europeans on subsidised wages etc.

          • Edward2
            Posted March 23, 2015 at 9:10 pm | Permalink

            There are plenty of properties available for sale for less than £100,000
            Have a look on the internet.

    • Denis Cooper
      Posted March 22, 2015 at 9:04 am | Permalink

      And the demand for housing is bound to rise in the future, partly owing to the inexorable rise in the population which in turn is partly due to the government allowing and encouraging mass immigration.

      • Anonymous
        Posted March 22, 2015 at 9:40 am | Permalink

        Denis – As wages are depressed by mass immigration who pays the rents/mortgages ?

        • Denis Cooper
          Posted March 22, 2015 at 7:01 pm | Permalink

          Anonymous, Robin has answered that in his fifth paragraph.

          • Anonymous
            Posted March 22, 2015 at 7:48 pm | Permalink

            Ah. I see, Denis. A socialist Ponzi trick.

            So how long can that last ?

            Since when did Tories start believing in the Magic Money Tree ?

          • Jerry
            Posted March 23, 2015 at 7:22 am | Permalink

            @Anonymous; @Denis Cooper; [re wages are depression]

            So the threat of jobs being off-shored to low(er) waged economies has nothing to do with wage depression in the UK?

      • Anonymous
        Posted March 22, 2015 at 10:35 am | Permalink

        Denis – If population increase meant high house prices forever then the Government wouldn’t need to be introducing first time buyer schemes and wouldn’t have needed to have kept interest rates near zero.

        There is a risk of a crash. And high population doesn’t always mean a high house price one – ask any third world denizen.

        I quote this morning’s Peter Hitchens contribution:

        “I’ll tell you what the Budget really means for most of us – a continued rush towards a low-wage, low-productivity economy of insecure, part-time jobs made tolerable only by cheap credit. And a crucial part of that will be the continued mass immigration that the Government pretends to oppose but, in fact, hopes for, as it keeps pay low.

        And this, of course, will continue to worsen our appalling housing, health and transport crises. Our country was not designed for the population it now has, and these problems cannot be solved. We will simply have to accept that everything will, from now on, be worse for all except the super-rich. ”

        And still the Tories are at it.

        Feigning toughness on migration (jihadi brides) by introducing checks OUT of the country (not back in.)

        Robin. One has to be insane not to vote Ukip.

        • Jerry
          Posted March 23, 2015 at 7:33 am | Permalink

          @Anonymous; “One has to be insane not to vote Ukip.”

          Of course every patient in the asylum being as sane as come!

          Funny how UKIPers so often complain about those pushing climate change referring to those who support UKIP as ‘nutters’, for not believing in AGW, but then use very similar terminology against those who are not UKIP believers…

          • Anonymous
            Posted March 23, 2015 at 5:41 pm | Permalink

            Jerry – Please read Robin’s comment at the start of this thread.

            It was he, not I who started it !

    • alan jutson
      Posted March 23, 2015 at 12:20 pm | Permalink

      Robin

      Guess as a Landlord you will not be too delighted at the new proposed Policy of encouraging sub letting by tenants, as outlined in the latest budget small print.

      Your houses may become Houses of Multi Occupation and you may never know, or indeed be able to do anything about it.

      Rather complicates the simple Buy to let market at a stroke.

  7. Lindsay McDougall
    Posted March 21, 2015 at 6:39 pm | Permalink

    It arises because egalitarians are obsessed with relative poverty rather than absolute poverty, and they equate low public expenditure with high relative poverty.

    Just in passing, Soviet Russia ran a very big State. However, because of perks like dachas and dinners, the average income of Communist Party members was 21 times that of non-Party members.

  8. Denis Cooper
    Posted March 21, 2015 at 6:42 pm | Permalink

    It’s absurd, but then if the government wished to be consistent they would accept that the correct measure for the comparison would be spending as a percentage of GDP, not the actual spending even when adjusted for inflation.

    After all they insist that the correct measure of the accumulated debt is the debt as a percentage of GDP, that is how they try to justify their claim that they are now cutting the debt even though the actual debt is still rising rapidly, and will continue to rise for some years yet; they really cannot expect to have it both ways, can they?

    • Matt
      Posted March 22, 2015 at 7:17 am | Permalink

      Denis,

      I agree that muddling figures to deceive us is common practise, but there are good reasons in this case.
      State spending adjusted for inflation tells us how much public service we can expect.
      State debt as a percentage of GDP tells us how indebted the state is in terms of the affordability of that debt.
      It’s the same with home finances. If your income adjusted for inflation goes up, you’re doing better and can afford more stuff. If your debt as a percentage of your income is within reasonable bounds you can afford to finance it.

      The Conservatives have fallen into the trap of allowing spending to be expressed as a GDP percentage on multiple previous occasions and are now I suspect regretting that.

  9. Jerry
    Posted March 21, 2015 at 6:55 pm | Permalink

    “So as the UK government this year is spending £737 100 million, what is all this nonsense about returns to the 1930s?”

    Anyone else getting that Déjà vu feeling, I now that your diary often revisits issues but didn’t we debate this only about two weeks ago. Has Labour really got the Tory party that rattled. As for your question, I suspect the issue is not so much the amount but on what, were and how it gets spent.

  10. Leslie Singleton
    Posted March 21, 2015 at 8:19 pm | Permalink

    Dear John–This may be a silly question but why do you not send letters to the Telegraph on this sort of stuff? Hard to believe that such would not be published. Also hard to believe what a poor job your Party does in general to demolish what the Left have to say on matters that are not opinions but fact. The references to the 1930’s are poppycock but that doesn’t mean that that will be obvious to what Miliband calls “everyday people” if I got the latter right.

    • Qubus
      Posted March 22, 2015 at 12:00 pm | Permalink

      Mr Redwood, your party should be shouting this from the roof tops.

  11. matthu
    Posted March 21, 2015 at 9:48 pm | Permalink

    Since we are talking about similarities between levels of government spending, what are the figures like after excluding social security, pensions, interest on public debt and transfers to other international countries (including the EU) in 1930 v 2014?

  12. petermartin2001
    Posted March 22, 2015 at 2:47 am | Permalink

    John,

    Adjusting for inflation doesn’t tell the whole story as I’m sure you’ll know. According to you prices have risen by a factor of almost 60.

    An MPs salary now is £68k per year. (Incidentally that’s fair enough IMO).

    An MPs salary 1932 was £400 per year. There were 615 MPs

    So on the basis of an inflation adjustment MPs should now be paid £24, 000 pa.

    As MPs are paid 2.8 times that much we could only afford 229 MPs instead of the 650 we now have. If we allow for the different number of MPs that would be 217 MPs

    I personally don’t think that’s enough MPs. I don’t think £24k for an MPs salary is enough either. Do you?

    So just as MPs have benefited from an increased GDP, so should other public sector workers too. The only valid comparison between government spending now and government spending then, has to be on the basis of a percentage of GDP.

    • Denis Cooper
      Posted March 22, 2015 at 7:11 pm | Permalink

      “So just as MPs have benefited from an increased GDP, so should other public sector workers too.”

      I thought this manufactured concern was about the level of services available to the public, not the level of remuneration for public sector workers.

  13. Lifelogic
    Posted March 22, 2015 at 6:09 am | Permalink

    Public spending at about half this level would be far better for everyone on average. Much public spending – the augmenting of the feckless, the green crap, the pointless trains, the dysfunctional NHS, the damaging wars, the many pointless university courses and much else is positively damaging. Much public spending is out and out corruption as we see with the recent expenses/receipt fiddling.

    People spend and invest their own money far better that the state does. They after know their individual needs and desires and seek value. Governments care not what they spend and care not what value they get. Defence, law and order and a few roads and basic services for those truly in need – not much else is needed

  14. Brian Tomkinson
    Posted March 22, 2015 at 9:02 am | Permalink

    No doubt it is the manipulation of statistics so loved and practised by politicians most notably on your side, Cameron and Osborne. Expressing the spending as a% of GDP is the origin of this 1930s claim I believe. I note that you, quite rightly, have given the inflation adjusted actual expenditure comparison. However, when it comes to deficit reduction and debt, you avoid the actual figures and play the game of misleading the public with quotients expressed as percentages, where the effect of an increase in the denominator masks the failure to reduce the numerator, as when the debt is increasing but less than the increase in GDP. Claiming that you are reducing the debt is tantamount to a fraudulent claim.

    Reply I have never claimed we are reducing the debt, and have often published the cash figures showing the continuing increase in debt.

    • Brian Tomkinson
      Posted March 22, 2015 at 9:45 am | Permalink

      Reply to reply,
      Cameron, Osborne and many others in your party have claimed just that.

      • Denis Cooper
        Posted March 22, 2015 at 7:18 pm | Permalink

        And they are guilty of perpetrating a fraud on the electorate.

        Unfortunately “attempting to obtain votes by deception” has never been a criminal offence in the same way that “attempting to obtain property by deception” has been, maximum penalty 10 years in jail.

  15. Bazman
    Posted March 22, 2015 at 10:53 am | Permalink

    Interestingly 29 % of spending was on interest payments and where would Britain be in the modern world without large public spending on infrastructure, education, housing and defence.
    A subsistence based country of poor people massively overtook by countries that do invest in a modern world is the answer and how rich would be………… without this spending?
    http://www.ukpublicspending.co.uk/year_spending_1932UKmt_14mc1n#ukgs302

    • libertarian
      Posted March 22, 2015 at 8:00 pm | Permalink

      Bazman

      Who actually built the original infrastructure of road, rail schools, hospitals, sewers, electricity, gas and telephone?

      Please list the countries that are investing more in infrastructure

      • Jerry
        Posted March 23, 2015 at 7:54 am | Permalink

        @libertarian; “Who actually built the original infrastructure”

        Tinted spec’s time again I see, Much of that original infrastructure was piecemeal and very inefficient.

        • libertarian
          Posted March 23, 2015 at 3:37 pm | Permalink

          Jerry

          Whereas of course todays taxpayer funded state driven infrastructure isn’t at all piecemeal and is highly efficient…. Yes of course it is.

          • Jerry
            Posted March 23, 2015 at 7:34 pm | Permalink

            @libertarian; It is by comparison with the period of your apparent utopia! As examples, what was (and still is) better, the UK electricity supply before or after The Electricity (Supply) Act 1926? Most people accept that the the “Railway Grouping” of 1023 was the correct state intervention -as an alternative to full state control- compared to the often inefficient and loss making 120 odd separate railway companies.

          • libertarian
            Posted March 23, 2015 at 10:22 pm | Permalink

            Jerry

            Yeh electricity was great in the 1970 3 day week wasn’t it. The railways are of course brilliant now.

            You missed the point, things should be better now, however if it hadn’t of been for the historical private initiatives in the first place there would have been nothing to nationalise. For someone who is so pompous about history you have a very tenuous grasp of the passage of time, cause and effect, innovation and technical breakthroughs .

            Unlike you monolithic statists I don’t believe in utopias I’m more your evolution type of person

          • Jerry
            Posted March 24, 2015 at 8:59 am | Permalink

            @libertarian; “Yeh electricity was great in the 1970 3 day week wasn’t it.”

            Is that the best you can do, complain about strikes that happened during a Tory government! What the hell has any of that got to do with infrastructure, other than for the fact that had the national grid not been around in the 1970s local blackouts would have been worse and more widespread had there been such a national strike of either power workers or those supping them.

            “The railways are of course brilliant now.”

            For a moment I thought you were being sarcastic, then I realised that you are deadly serious. 🙁
            Ask any neutral expert on UK railways and they will tell you that they are a complete mess. Don’t get me wrong, I actually didn’t have a problem with the privatisation of the railways back in the 1990s except for how it was done, far to much fragmentation, I would have preferred a return to the pre-nationalised “Big Four” rather than to what is in effect a pre 1923 mess.

            “You missed the point, things should be better now, however if it hadn’t of been for the historical private initiatives in the first place there would have been nothing to nationalise. “

            Irrelevant, the point was about what was better, and what you don’t like is fact that I gave you a prime example of government intervention/nationalisation in the electricity supply industry that benefited all, something that the private companies in the sector would and could not have carried through by themselves – or perhaps you quite like the idea of differing voltages and/or phases (AC or DC), even perhaps frequency (Hrz) depending on who your supply company is, after all it does give “opportunities” for others ultra-capitalists to sell more new goods or to sell phase and .or voltage converters!…

            For someone who is so pompous about history you have a very tenuous grasp of the passage of time, cause and effect, innovation and technical breakthroughs .

            Yes I have just quoted your own words right back at you as they fit you far more than me, for someone who claims to have been in the electronics industry (vie telecoms) you really do not seem to understand very much’ perhaps your involvement was as a mere sleeping partner rather than at the actual sharp end so to speak…

            “Unlike you monolithic statists I don’t believe in utopias I’m more your evolution type of person”

            As I am on a lot of things, but unlike you I also reorganise when the state can do things better, even when that might mean a state monolithic (compared to a private monolithic).

    • Edward2
      Posted March 22, 2015 at 8:55 pm | Permalink

      But if there was a demand for housing, infrastructure, education etc then it would be filled by companies if the State refused to provide it.
      Profits to be made.

    • petermartin2001
      Posted March 23, 2015 at 4:49 am | Permalink

      Bazman,

      I would dispute this figure of 29% of GDP.

      Interest rates, as we all know, are very low so, even if the National debt were exactly equal to one year’s GDP (its in fact slightly less) there is no way they could be this high presently.

      Interest payments in total are just about the lowest they have ever been. In fact in my opinion they are too low. Elderly savers should ideally have a better return on their savings which is part of the country’s ND to them

      http://en.wikipedia.org/wiki/United_Kingdom_national_debt#/media/File:UK_National_Debt_interest.png

      • petermartin2001
        Posted March 23, 2015 at 5:08 am | Permalink

        PS Sorry. I just noticed that the figure of 29% refers to 1932! Its interesting to look at how interest costs did rise after the return of the £ to the gold standard after WW1 on the Wiki reference I gave above. But even so, 29% still looks too high.

        Being on a gold standard is rather like using someone else’s currency – in the same way as Greece does. There is a real risk of default and that makes investors wary of buying Govt bonds unless there is an added incentive.

  16. waramess
    Posted March 22, 2015 at 4:45 pm | Permalink

    Not off piste but a slightly different angle.

    We are constantly told we are better off now than we were in, say 1950 ( I don’t go back as far as 1930).

    My father had a very menial job of collecting pennies from gas meters but my mother stayed at home to look after us, we had a fortnights holiday away each year and they managed to save a deposit for their first home.

    This was not at all unusual.

    These days both parents work, the prospect of a fortnights holiday for those earning below the average salary is slim and the prospect of saving enough to pay a deposit on a house is non existent.

    Perhaps therefore boasting about how the government is not cutting sufficient spending to return it to the same lvel of consumption as in the ’50’s, at least, is not quite so smart as it may seem

    • libertarian
      Posted March 22, 2015 at 8:04 pm | Permalink

      Waramess

      I can tell you why we do not feel as well off as back then, its quite simple.

      The average earning family now spend more of their income on taxes than they do on food, shelter & energy combined.

      The trouble with idiot socialists is they demand more tax in order for the government to “invest” in giving a little of it back and wasting huge chunks of it.

    • Jerry
      Posted March 23, 2015 at 2:35 pm | Permalink

      @Waramess; The reason so many people without good cause feel worse off these days is because they spend to much on the wrong unnecessary things!

      They will happily spend vast amounts on things like the latest all singing all dancing mobile phone (even if they do so via an inflated contract price), spend a grand on a TV package never mind what subscription TV packages costs each month, then they need to have all the mod-cons unlike people like my parents, and I suspect your own, who were happy to have a twin loader washing machine whilst the ‘automatic dishwasher’ was the kids being told to do/help with the washing up etc, not now, it’s the designer items all the way, and often changed before time simply because the fashion has changed and so on. Oh and before someone like “libertarian” claims otherwise, it’s not that there were no such mod-cons but luxury goods were just that – luxuries, something top aspire to, not to be considered the norm or an essential.

      Then of course people tended to prepare their own food and not buy so much ready-prepared ingredients or complete meals, people these days can’t even wash their own salads! Many families now have more than one car and the list goes on…

      • libertarian
        Posted March 23, 2015 at 3:44 pm | Permalink

        Dear Jerry

        Please give a definition of a luxury good and a commodity. Seeing as 700 million Africans own mobile phones I wouldn’t really label them luxury items.

        I do agree that people spend their money on stuff that isn’t always essential, however that’s their choice. Taxes aren’t . You do of course realise that if people went back to that way of living/consuming then the tax take would plummet, jobs would plummet and the economy would sink.

        • Jerry
          Posted March 23, 2015 at 8:00 pm | Permalink

          @libertarian; “Seeing as 700 million Africans own mobile phones I wouldn’t really label them luxury items.”

          I never said that mobile phones were a luxury item, I said that the all singing all dancing mobile phone is, the clue is in the word “phone”!

          “I do agree that people spend their money on stuff that isn’t always essential, however that’s their choice. Taxes aren’t “

          Sorry but what is not voluntary about paying £120 worth of VAT @20% when buying the latest all singing all dancing mobile phone or tablet computer for example at £600 for example?!

          “You do of course realise that if people went back to that way of living/consuming then the tax take would plummet, jobs would plummet and the economy would sink.”

          Hmm, according to a Tory PM of the day, we never had it so good back in the 1950s! What you think as an economy is actually a vortex, all the time it is spinning we are all good and dandy as it keeps the balloon inflated but every ones ion a while (as happened in 2007-8) it stops… Constant credit is no way to run a government budget, as most people on John’s site agree, so why do the same people then think that an all but cradle-to-grave life of never ending credit is good the the plebs?

        • libertarian
          Posted March 23, 2015 at 9:02 pm | Permalink

          Oh and Jerry

          For someone who pompously told me I ought to read more history from the 20’s and 30’s I guess in your vast reading you missed the bit where home ownership started to take off in the 30’s with 27% of the population owning their own homes . 9 million people bought the new fangled gas cookers. Of course they couldn’t buy TV packages then, but they did buy wireless sets 7 million people within 2 years of BBC launching national radio, oh and the “subscription” price then was the licence at 10 bob. At a time that the average annual salary was £190 . Sheer decadence I tell you

          • Jerry
            Posted March 23, 2015 at 10:59 pm | Permalink

            @libertarian; I have never said that home ownership is wrong, what I object to is the fact that nowadays many people have little or no real choice, they are either paying their own mortgages off or those of the BTL private landlord via an inflated rate when in reality they can not afford to do either!

            Oh and yes perhaps 9 million people bought those new fangled gas cookers, but how many were still in daily use up until the end of coal gas and even then perhaps after if they could be re-jetted to use natural gas. As for radio -or wireless as it was then called- whilst many might well have bought a ready built receiver of varying worth, many of those 7 million are likely to have bought either vary basic receivers, a kit of parts, or sourced individual components to built a basic radio from scratch.

            “libertarian” you love to point out the failings of the 1945-1979 post war (broadly speaking) political consensus, but seem to fail to understand the same realities and failings of your heavily idealised capitalist utopia of the 1930s, when much of the post war political consensus was born out of that pre war period and not the war its self – all the war did was concentrate certain minds that were already having such thoughts.

          • libertarian
            Posted March 24, 2015 at 5:24 pm | Permalink

            Oh dear Jerry

            You are struggling here aren’t you.

            YOU posted that people in 30’s on the whole didn’t spend money on luxuries as they couldn’t afford such extravagance.

            YOU also asserted that people now had the temerity to indulge in expensive luxury mobile phone contracts

            I merely pointed out that

            1) People in the 30’s were as prone to investing in new tchnology back then ie gas cookers, wireless sets etc

            2) That large scale home ownership began at that time too

            I then pointed you to the fact that in a modern 21st century world a mobile smartphone contract isn’t a luxury.

            Do try and keep up and STOP making up things that YOU THINK I might say as I didn’t say any of them.

            For the avoidance of doubt

            1) I LIVE IN THE 21ST CENTURY AND THINK ITS A BETTER PLACE THAN THE 20TH CENTURY

            2) I Lived through the 1970’s socialist/keynesian disaster and I know if was a dreadful period to live through

            3) I know because the facts repeatedly bare it out that free market economics has raised the living standards of the world consistently whilst socialism has failed everywhere, everytime

          • Jerry
            Posted March 24, 2015 at 7:48 pm | Permalink

            @libertarian; Regarding consumerism, I don’t give a dam what people spend their money on, what I do object to though are people who bleat about the cost of living or that wages are to low but then buy (often by using debt) “fashion” items at inflated prices rather than the cheaper alternatives that they can afford. I’m not expecting anyone to go without any essentials.

            “Oh dear Jerry You are struggling here aren’t you.” [..//..] “Do try and keep up and STOP making up things that YOU THINK I might say as I didn’t say any of them.”

            Talk about the filthy pots and pans trying to call the kettle dusty!

            “1) I LIVE IN THE 21ST CENTURY AND THINK ITS A BETTER PLACE THAN THE 20TH CENTURY

            2) I Lived through the 1970’s socialist/keynesian disaster and I know if was a dreadful period to live through

            3) I know because the facts repeatedly bare it out that free market economics has raised the living standards of the world consistently whilst socialism has failed everywhere, everytime”

            1). That is an opinion, not a fact, and no need to SHOUT.

            2). Two words – oil shock, try actually reading up on its world wide economic effects, both those of 1974 and 1979. Oh and don’t forget the problems caused by Mr Heath’s ill-thought through and implemented economic and employment legislation that ultimately caused the three day week from the start of 1974 until just after the GE of 28th February when the new Wilson government normalised working from the 8th March. (which was also about when the oil supply crisis weakened, although the price rise didn’t) fact.

            3). You, as those who you agree with, are entitled to your opinions… The problem is, the free market caused the 1929 Wall Street crash and Great Depression that followed, and it was the free market that caused the 2007-8 banking crash and Great Recession that followed, neither started here in the UK, both affected much of the world, neither happened or were caused by either a socialist government or the Keynesian [1] economic theory. fact..

            “libertarian” for goodness sake try checking that your opinions tally with the historical facts before posting them as a “fact”, all you are doing at the moment is showing just how shallow your actual knowledge of such events is. 🙁

            [1] The General Theory of Employment, Interest and Money, first published in 1936

          • libertarian
            Posted March 26, 2015 at 2:30 pm | Permalink

            Jerry

            I’m laughing at you now

            First you try to obscure what you originally said and still you have got yourself confused. My point still stands, you accused moderns with consumerism and I pointed out that 30’s man also did the same.

            Yes the free market consists of boom and bust, always has always will. Keynesian socialism never solved it. As a statement of FACT the UK ended the depression 5 YEARS before the US on their keynsian inspired New Deal.

            Ha ha ha ha I genuinely did cry with laughing.

            Telling me to learn the facts then posting me to a link on THEORY … ha ha ha

            Show me ONE example from anywhere where socialism has raised the living standards comparably with free market economies.

            Economic theorists are ALL moonshine whether Keynes, Heyek or Von Mises . Economics isn’t a science, its opinion. They all have been wrong more often than right and the big clincher is that every single one of them failed to mention the digital economy, the world wide web, the rise of service exports or any other attribute of the modern world for the simple reason they all died before the invention of the computer.

          • Jerry
            Posted March 26, 2015 at 8:36 pm | Permalink

            @libertarian; “First you try to obscure what you originally said and still you have got yourself confused.”

            Stop replying to your own commenting style, the only person trying to twist the debate to suit your opinions is you!

            “Economic theorists are ALL moonshine whether Keynes, Heyek or Von Mises . “

            That is your opinion, not a fact…

            “libertarian”, you really do not like historical facts, even more so when they prove you wrong!

  17. roberto
    Posted March 28, 2015 at 8:48 am | Permalink

    Surely u should adjust 1932 public spending for GDP growth as well as inflation to make a sensibly comparison with today?

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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