Nick Clegg has decided to go on the offensive against the Institute for Fiscal Studies analysis which shows that, despite Coalition claims that ‘the broadest shoulders are bearing the greatest burden’ and that the Comprehensive Spending Review’s slash and burn of public services is ‘progressive and fair’, the poorest 10% of society will be hit the hardest. He claims that the IFS has failed to take into account the full package of measures as outlined in the Emergency Budget in June as well as the CSR. Would these be the measures which the IFS found, at the time, to be ‘clearly regressive’ taken on their own and only ‘progressive’ when taking into account the tax and benefit proposals of the departing Labour government?

(more…)

Some decent articles appeared in the run up to the long-awaited Comprehensive Spending Review (CSR) which collectively throw light on both the politics and economics of it all. First up, Jonathan Freedland in The Guardian, writing about how Labour really needs to take on the Coalition’s attempt to pin the blame on them for the ‘economic mess’, and that the deficit is all the fault of profligate Labour spending. According to the Budget 2007, the structural deficit stood at just 3% of GDP before the recession struck; now it is 11%. In other words, prior to the recession it was relatively low by historical standards – as Ed Balls pointed out earlier in the summer, Britain went into the recession with ‘the lowest net debt of any large G7 country’, and this is a matter of fact not interpretation. Indeed, using the Treasury’s figures, the accusation that Labour wildly overspent in office just does not add up: public spending during the previous period of Tory rule was higher in all but 4 of the 18 years they were in office than at any point during 1997-2007 (the four years in question being the boom years after the ‘Big Bang’ deregulation of the City, that period satirised by Harry Enfield’s ‘Loadsamoney’, 1988-1991).

This is the basis for the first of Freedland’s two killer points. If Labour’s public spending was so wildly out of control, why did Cameron’s Tories (back in his hug-a-hoodie, quality-of-life days) promise to match Labour’s spending plans almost pound for pound? The answer is that clearly it wasn’t. This means, of course, that the size of the deficit now is largely down to the recession and the fiscal stimulus package that prevented disaster turning into catastrophe. Without it, it is likely that recession would have turned into depression, but somehow the Coalition spin machine has successfully managed to make it appear that the medicine was the disease.

(more…)

I’ve just been watching a BBC News 24 report on the forthcoming Comprehensive Spending Review in which two reporters have been despatched to S.Wales and N.Ireland because, we are told, these are where the public sector is largest. One of these reporters (the one in Wales) then began asking a series of questions of the interviewee all premised on the relative size of the public and private sectors in that region (although, bless her, she managed in her excitement to mix the two up ‘Why is it that the private sector is so huge here…Why is the public sector so small?’ she asked; Er? Come again? Don’t you mean…oh never mind.)

Notwithstanding such minor incompetencies, thus do we see how government still has the power to shape discourse and how the news agencies, like little lapdogs, unthinkingly do their work for them by consolidating the frame within which discussion might be set. After all, the public sector versus private sector distinction is now being used ubiquitously by the news media, thereby doing some ideological heavy lifting on behalf of the government, enabling them to pursue their aim of dismantling the state.

(more…)