Britain: For the Love of God, Please Stop David Cameron
by Benjamin Studebaker
On May 7 (this Thursday), Britain has a general election. I care deeply about British politics–I did my BA over there and will return to do my PhD there this fall. But more importantly, David Cameron’s government has managed the country’s economy with stunning fecklessness, and I couldn’t live with myself if I didn’t do my part to point this out.
Let me tell you the story of what happened in Britain and how David Cameron made everything much, much worse.
The 2008 economic crisis slammed Britain particularly hard because the UK has a big financial sector–its economy suffers heavily from “financialization”, a condition in which a lot of money is tied up in finance. In most cases, this means that not enough is flowing through the wider economy (unless you’re Luxembourg and don’t really have a wider economy). Indeed, this is a bigger problem in the UK than it is in the US:
This meant that Gordon Brown’s Labour government had to bailout a lot of banks and do a lot of economic stimulus to rescue Britain’s economy. This required it to run up the UK’s debts:
But it also prevented the UK economy from cratering, pulling it out of recession:
But British voters were in no mood to credit this recovery to Labour–instead, they blamed Labour for the recession, the bailouts, and the size of the public debt. This made no sense, because the economic crisis started in the United States because of a US housing bubble facilitated by Clinton-era deregulation of the US financial sector. But as political scientists know, the public tends to blame the sitting government for economic phenomena regardless of whether or not government policy is really responsible.
So in 2010, the British elect a coalition government led by the Conservative Party’s David Cameron. Cameron immediately begins doing austerity–he cuts government spending to in an effort to reduce the debt. The trouble is that when government spending is reduced, this cuts the legs out from under economic demand. Cameron cut benefits, salaries, and reduced subcontracts putting less money into consumers’ pockets. Here we can see the composition of UK economic growth during the Labour government as compared with that of the conservatives:
Two things stick out:
- Growth is significantly higher under Labour.
- The difference is primarily accounted for by differences in government spending.
When the conservative austerity package passed, the UK’s path totally diverged:
If we look at average annual growth rates, the UK was almost totally stagnant compared to the United States:
This experience was not unique to the UK–it quickly became clear that austerity negatively correlated with growth throughout the European Union:
The International Monetary Fund (IMF) subsequently came out with a paper stating that the multiplier (the effect of government spending on economic growth) had been massively underestimated. Then it got worse–the IMF revealed that because the multiplier is so large, austerity shrinks the economy enough to cancel out debt relief. Let me be clear–austerity reduces growth so much that it undercuts government revenue and prevents governments from shrinking their deficits. I wrote about this at the time. It was and remains shockingly clear evidence that austerity was and is failing even to reduce debt and deficits. The UK is in a significantly worse fiscal position than it was in 5 years ago:
And what did Britain have to show for it? Look at these figures:
The UK performed worse than France, a country that the Wall Street Journal accused of “descending into ridiculousness”. In the first two years, Cameron’s government put up numbers that were worse than Spain’s. Spain is a basket case–even today, Spain has an unemployment rate over 20%. Had it maintained the trajectory it was on from 2009-2010, Britain could have been doing as well as Germany in 2012.
Now, Cameron isn’t completely foolish–he slowed down the austerity after the first year:
In the first year, spending fell by about 2% of GDP. Cameron halted austerity in the second year to fight off a double-dip recession, reintroduced it at about the same pace in the third year, and then cut the pace in half for the 4th and 5th years. Consequently, Britain’s economy has started showing signs of life:
But rather than admit its error, the government now claims that these are the good results austerity was going to bring all along. This is clearly misleading–even with the growth post-2012, the UK remains behind France, and the US and Germany are still far ahead:
What the numbers really suggest is that Britain could be much further along now if it had avoided austerity to begin with. But voters have short memories, and because the British economy has been improving since the austerity slowed down, the conservatives remain electorally competitive:
To be clear, Cameron’s Conservative Party is in blue. The Labour Party is red, hard-right UKIP is in purple, the centrist liberal democrats are orange, and the hard-left greens are, obviously, green.
This is disturbing, because the Conservative Party promises to continue cutting government spending by a further 2% over the next two years if it is returned to power. This would not be as fast as the rate of cutting from 2010-2012, but it would be faster than the rate from 2012-2014. This will only serve to hinder British growth further.
According to Oxfam, the government’s austerity policies have devastated Britain’s middle and working classes in a variety of ways:
- As a result of austerity, an addition 800,000 British children will live in poverty over the next decade.
- Over the same period, 1.5 million working age adults will fall into poverty.
- By 2018, 900,000 public sector workers will have lost their jobs.
- The bottom 10% of British earners will have seen their incomes fall 38% over this government’s five year term.
Indeed, when we adjust for inflation, British workers have seen continual reductions in their wages over the course of this parliament:
And as university students should remember, the conservatives raised university tuition fees to £9,000 per year (roughly $13,600 by today’s conversion rates). This means that a British university student must now pay more to go to university than an in-state American student–for instance, Indiana residents pay only $10,388 in tuition to go to Indiana University. Before 1998, British students went to university for free. Society benefits from a well-educated population and well-trained workforce. It remains an obscene injustice to pass this cost onto young people. It deters students from pursuing degrees, particularly those degrees that are less financially lucrative.
In sum, this austerity serves no economic purpose–its exists because the Conservative Party wants to cut the welfare state so it can reduce taxes on the rich and for no other reason.
The Labour Party has done a bad job of attacking austerity–indeed, it promises to prioritize cuts as well. There are however two key differences:
- Instead of cutting the deficit 2% over 2 years, Labour promises to eliminate the deficit a little bit at a time each year, which implies a cut of about 0.4% per year for five years–this is not good for the economy by any means, but it is less bad than a quick 2% cut.
- The composition of the cuts will be different. The conservatives promise to avoid increasing most taxes, and some they even plan to cut (including inheritance tax, which targets the wealthy and affluent). This forces the conservatives to make deeper cuts to benefits and to the welfare state to achieve their budgetary goals. Labour promises to raise taxes on the rich, which will offset cuts in other areas and facilitate a decrease in tuition fees from £9,000 to £6,000.
This is not by any means an ideal alternative–Labour has done little to combat the Conservative Party’s narrative that the debt poses an existential economic threat to the UK. Austerity is not an effective way to fight debt, but Labour has not challenged this claim and as a result it has become part of what ordinary British voters consider common knowledge. As a result, it has become impossible to be taken seriously in British politics if one does not promise significant spending cuts. Even the Greens are promising to focus on the debt, though their manifesto calls almost exclusively for tax increases. This is remarkable, considering that UK borrowing costs are at historic lows, indicating a high level of confidence in the UK’s solvency (and a low level of confidence in its future economic trajectory):
But nevertheless, it means that for British voters, there really is no way out. They can trust Labour austerity to be less damaging for poor and working people, and they can hope that Labour will see the error of its ways and change its policies faster or more quickly than the Conservative Party would, but that’s about it. This is still significant–the UK will be better off if Labour wins–but things could be so different, if only British voters were better informed about what has been going on.
Update:
This post has gone semi-viral–it’s by far the most popular post I’ve written to date, and it’s receiving a lot of attention. As a result, it’s become impossible for me to keep up with the comments, and I know there are many places it’s being shared where I’m not around to defend it or explain the finer points. So I’ve written a follow up post, entitled 13 Terrible Tory Counterarguments, which addresses the most popular negative responses I’ve seen on the internet over the last few days. If you share Please Stop David Cameron and someone gives you grief, send them to the relevant part of Tory Counterarguments, and hopefully my response will prove adequate. As far as the comments thread here goes–there’s just too many, and if I try to do what I normally do (which is patiently respond to each and every one of you) I will not be able to keep up and will spend my whole day on the computer. I want to thank all of you for reading and sharing. Who knows, maybe it will be shared enough by May 7th that it will actually make a difference? It’s not likely, but you never know.
Benjamin Studebaker 
So, are you encouraging the British to vote Labour?
I’m saying that a Labour government is marginally better than a Conservative one, and that a Conservative one is pretty horrifying.
I agree entirely, but you haven’t really answered my question.
You came here to do a BA and returning to do a PhD ? yowur not really living here are you ? If you don’t live here why are you commenting? This county went through hell and something had to be done fast ! The biggest problem is the constant miss management of UK funds by all party’s. It seems every 5 yrs the people are bailing out the previous incompetence . Labour really put this country down with a crude note saying ‘there’s nothing left’ ! How do you think a nation would react to such a comment !!!
I write about Britain because I care about it and its people and want the best for them.
I’m saying why don’t you worry about your own country and leave mine alone!
Everyone has an agenda, what’s yours?
I’m a PhD student, I really just find politics interesting and want to make the world a better place. There’s no further agenda, I have nothing to gain financially. Indeed, a foreigners’ observations may be more valuable because a foreigner has less at stake and can be more objective.
I don’t generally encourage individuals to vote, given that individual voters have no significant influence over election outcomes. If I had a large enough UK audience that it might be possible for me to sway election outcomes by urging people to vote one way or another, I might do so, but this would require me to mislead people about the importance of individual voting decisions. Similarly, if I knew of some other way to ensure my preferred outcome or make it more likely, I would take that action. But given that I have no major ideas about implementation tactics at this time, I prefer to just say which outcome is better and let people decide for themselves how to best advance that outcome if they agree.
“If I had a large enough UK audience that it might be possible for me to sway election outcomes by urging people to vote one way or another, I might do so, but this would require me to mislead people about the importance of individual voting decisions.”
Do I detect a slight contradiction here? Either individual voting decisions are important or they aren’t. Influencing a large number of people to vote will obviously have more effect than influencing one person to vote (or, indeed, one person deciding spontaneously to vote), but ultimately all influence on the final result works via individual voting decisions.
Individual voting decisions are never important, the voting decisions of aggregates are. When we talk to individuals, it is misleading to act as if we were talking to aggregates (which, by definition, we cannot talk to). I did a post on this a while back:
https://benjaminstudebaker.com/2014/11/04/the-case-against-voting/
Higher spending and less investment under labour is what I read?
That’s a good post, which I’d already read. You make some very good points there for the view that ‘democratic power sharing’ is an illusion (not to say a complete swindle), and that a few rich and powerful individuals can have more real influence on the result of an election than millions of voters combined. We actually had quite a long discussion on this sort of thing (with regard to voting, littering, working for a defense contractor, etc.) under your post Is It Morally Okay for My Little Brother to Work for a Defense Contractor? and I don’t want to repeat it all here. It’s a very interesting paradoxical question: individual actions don’t make any demonstrable difference to anything while the actions of large groups do, but the actions of large groups consist entirely of individual actions, so if these individual actions aren’t having any effect, what is? I still think you’re letting yourself off a bit too lightly by simply choosing to ignore the last part of the paradox. If we’re talking about voting it becomes quite complex due to the technicalities of voting systems, threshold values etc., but I still think that when it comes to less threshold-sensitive matters such as littering or pollution you sometimes confuse no effect with an extremely small effect. Might it perhaps be that your type of consequentialism only takes account of visible, demonstrable consequences, and that we should also be looking at ‘invisible’ consequences of which we can rationally know that they must exist? Just an idea…
I live in a French commune with about 500 voters, and I once had the mayor and two councillors come and visit me at home to make sure we’d be voting (for them of course). I got similar attention from the opposition. Now, that’s an experience I never had when I was living in London! Two votes out of 500 or so aren’t likely to make a decisive difference, but it’s possible, and the mayor and councillors were going around visiting dozens of people whose vote wasn’t a foregone conclusion. Presumably these people with a lifetime’s political experience wouldn’t have been doing this unless they were convinced it was worthwhile (which still doesn’t guarantee they weren’t wrong about that). There are communes here with literally a few dozen voters, and there every vote really does count. Of course these situations aren’t directly comparable with, say, the coming British election, but the point I want to make is that the difference between them is one of degree, not of kind. If there’s a cut-off point where the important individual vote in a small commune becomes the completely insignificant vote in a large election, then it’s an arbitrary one. Even if we use statistical significance as our criterion, it’s still a question of arbitrary interpretation, while the mechanism (insignificant individual votes combining to form something which does make a noticeable difference) is the same in both cases.
I think we agree that democracy is a very bad system (even if it’s difficult to find a better one), so it could be argued that not voting is better in the (very) long term: if less and less people bothered voting, governments would be compelled to find new ways to choose and legitimise themselves. But I don’t see that happening between now and Thursday, and the only way to prevent David Cameron from being re-elected is if a lot of people vote Labour. So, if I was living in the UK I definitely would vote Labour on Thursday as the lesser of two evils (three if you count the UKIP), but without any illusions that I was doing anything spectacularly important or useful. I also have no hesitation in saying to any Brits reading this that they should do the same. And if they’re in the position to be able to do something more useful and to persuade lots of others to follow their example, so much the better!
Did we talk about voting in that previous discussion? We certainly talked about similar things–I would say that this is a clear threshold case, where an individual’s vote only has consequences if it is decisive. In a first past the post system with voting populations of significant size, this is never the case. You could make the argument that voting is more like littering under proportional representation, but the UK and US do not have PR. In the absence of clear consequences, voting is a very Kantian act–if you vote Labour in the UK under FPTP, you are essentially acting as if your actions were universal laws, not because you have any reason to believe your individual voting decision will yield any significant number of additional voting decisions such that it might prove decisive.
You make an interesting point about this possibly being arbitrary–if one vote does not have a large enough chance of being decisive in a UK constituency or US district, how small does the voting bloc have to be for an individual voting decision to become a reasonable course of action? I would use the Brennan/Lomasky formula, which is:
U = p[V(D)-V{E)], where U is the utility of voting for D, p is the probability of the vote being decisive, and [V(D)-V(E)] is the difference in the utility of the two candidates.
If U exceeds the cost of voting (the value of one’s time plus any personal risks), it is reasonable to vote.
You’ll make a very good politician some day, as you’re very good at only answering those of the points put to you which you feel like answering, and ignoring the rest. But that’s OK! 🙂
Is there something in particular you think I left out? I thought I covered it all.
Well, let me see…
“It’s a very interesting paradoxical question: individual actions don’t make any demonstrable difference to anything while the actions of large groups do, but the actions of large groups consist entirely of individual actions, so if these individual actions aren’t having any effect, what is? I still think you’re letting yourself off a bit too lightly by simply choosing to ignore the last part of the paradox.”
“Might it perhaps be that your type of consequentialism only takes account of visible, demonstrable consequences, and that we should also be looking at ‘invisible’ consequences of which we can rationally know that they must exist?”
Not that I expect anything like a definitive answer on these two points, I’m just interested whether you have any thoughts on them. You talk a lot about the difference between individual and collective actions, but seem to be ignoring the fact that the two are in fact mysteriously connected. In your post “The Case Against Voting” you say “We can’t credit individuals for collective benefits, and we can’t blame them for collective harms, because if only the individual participates, nothing good or bad comes to pass. This does not make the collective benefits and harms any less real.” This provides a very convenient excuse for anyone wondering whether they should drive into town or take the bus: driving is much more convenient for me, and one car journey doesn’t make any real difference to anything, so I’ll drive. I know what your answer to this will be: we can’t expect individuals to self-harm, so we just have to set up a system of incentives and punishments to make it worth the individual’s while to ‘do the right thing’. I agree that such a system is necessary, but it comes with overheads and is never going to be 100% effective, so the more individuals who ‘do the right thing’ spontaneously, the better. In this context I don’t think it’s very useful to say that people are justified in abdicating all personal responsibility and leaving it up to the state to sort things out.
My point about ‘the important individual vote in a small commune’ becoming ‘the completely insignificant vote in a large election’ wasn’t about finding the best statistical formula for finding the cut-off point, but about the fact that any cut-off point we choose is an arbitrary one, and that the difference between the two situations is one of degree, not of kind. The implication would then be that if a vote can be important in one situation then it can’t become totally unimportant in the other, but only much less important.
I think it’s a big mistake to assume that the only vote which is important in a first-past-the-post election (i.e. the only vote which can have any actual consequences), is the one vote which makes all the difference when there is a gap of one vote between the candidates. I find this a sort of ‘consequentialism gone wild’ which can lead to some very strange conclusions, but it seems to be a pretty standard way of looking at things. To quote from the Wikipedia article about the Paradox of voting:
The paradox assumes that the value of voting relies entirely on “casting the vote that tips the scale”. This implies two conclusions:
1. that in past elections when the margin of winning was greater than 1, no single vote had any value, because subtracting that one vote alone from the count would have had no effect on the outcome;
2. in elections with an even number of voters voting, no single vote could possibly have any value.
I find these conclusions counterintuitive to say the least – in fact I’m sure there’s something very seriously wrong with them. I think another strange conclusion could be that when someone votes is important: given a roughly random distribution of votes, anyone voting in the morning would almost by definition be wasting their time, as ‘the decisive vote’ would almost certainly be cast late in the day. So if you want to increase your chances of voting usefully, vote late! That does indeed sound ridiculous, but no more so than those two conclusions listed above.
I’m not familiar with the maths used to work out the monetary value of a vote in the examples you quote in “The Case Against Voting”, but I got the impression (mainly from the enormous odds quoted) that you’re working along similar lines and regarding the election as a sort of lottery where only the one voter who “tips the scale” wins, i.e. only he has managed to cast a useful vote. Please do correct me if I’ve misinterpreted this.
Suppose the results of an election were 50000 votes for candidate A, and 50100 for candidate B. Who has cast a ‘useful’ vote and who could just as well have stayed at home? As I understand your logic you’re saying that only vote number 100001 had any actual consequences, as that vote “tipped the scale” and caused candidate B to win. The first 100000 votes would be useless as they cancel each other out, and the last 99 votes for candidate B would also be useless, as the election was already won. But you could just as easily say that the first 50001 votes for candidate B were useful, as these allowed candidate B to have more votes than his rival. Looking at things this way, only those who voted for candidate A cast consequentially useless votes and could just as well have stayed at home (although they only find that out afterwards).
I would suggest that there is no qualitative difference between any two votes for a given candidate, so it doesn’t matter whether you’re the first or the last person to vote or somewhere in the middle. If a candidate wins by a margin of one vote, it’s not that one vote, cast by some individual voter, which makes a difference and is useful, as that would imply a qualitative difference between that vote and the others. It would be more logical to divide the ‘usefulness’ equally over all the votes for the winning candidate, whereby every vote for that candidate becomes equally useful.
So I’m not convinced that your ‘mathematical’ arguments show that all votes are useless (or even all votes except one), but only those for the losing candidate. And the fact that those are useless is simply a function of the first-past-the-post system. So your ‘case against voting’ (well, at least the ‘mathematical’ side of it) could be reconstrued as a case against the first-past-the-post system, which must be the worst voting system imaginable. It’s so obviously unfair that the fact that it’s managed to survive for so long in the UK and USA can only be explained by general inertia and conservatism (i.e. the fact that anyone voted into power under a given system is likely to regard it as being to their advantage, and so not want to change it). Under a perfectly proportional system every vote would be equally useful. OK, it’s difficult to imagine how PR could be used in an election with just one winning candidate, such as a presidential election, but at least you can have a two-round system like the French one, where if no one candidate gets more than 50% of the votes you have a run-off election between the top two. That means that less than half the votes will be ‘useless’. But I’m starting to digress slightly…
BTW, there are lots of things I agree with in “The Case Against Voting”, and plenty of good arguments in favour of the viewpoint that voting is futile, and that “the power of the individual vote is a dangerous illusion that lulls us into a false sense of security”. But these would be political arguments, and criticisms of the democratic system as a whole. I don’t think your ‘mathematical’ arguments, or the question of individual versus collective action, are quite good enough. And to get back to the British election, it still strikes me as slightly contradictory to say on the one hand that voting is useless, and on the other that people in the UK should vote Labour on Thursday.
To use a metaphor, if a building is on fire, and you have a thimble of water to throw at it, it doesn’t matter whether or not you choose to throw it. But if you have a hose, your actions matter. Just because there are millions of thimbles of water in that hose does not make the thimble morally important in the way that the hose is, because the hose controls all of those thimbles with a single decision. In the voting scenario, we are misled because we know that many other people have thimbles too, we imagine that they are going to throw their thimbles as well, but our decision is not in any way connected with their decision unless we have unusual persuasive influence. We do not control the hose, we confuse the disconnected individual decisions of thimble throwers with the decision of a person with a hose. They are not morally equivalent decisions, even if they appear to produce the same kind of result.
In the driving scenario, I think you are again implicitly connecting the decision of one individual to drive to the decisions of other individuals. We cannot make one person morally responsible for the unconnected decisions of other people. One decision cannot be given the moral importance of all decisions of similar type made by others. The choice not to drive is the choice to throw the thimble, the choice to impose emissions regulations or cap and trade is the choice to use the hose.
As you proceed into the discussion of the paradox of voting, I again think that you are talking about a series of individual acts as if they were a collective action. When 50,000 votes are cast for candidate A and 50,100 votes are cast for candidate B, none of the individual votes matters and none are decisive–any one individual vote can be added or subtracted with no effect on the outcome. Not an extremely small effect, but no effect at all whatsoever. The same person wins, the same person goes home. What the formula shows is that there is almost never a decisive vote to begin with, such that no one individual vote can be said to matter. There is nothing to divide among the voters–there is no collective action, only a series of individual acts. No one here has a hose.
Even in the case of PR, a single vote is useless unless it allows one’s preferred party to overcome a percentage threshold such that they accrue an additional seat. The number of votes necessary to do this is smaller than in the case of FPTP, but in democracies of significant size one’s vote still will not make a difference.
I really just do not think collective actions are reducible in the way you’re saying. The implication of your view is that a person can be given moral credit or blame for the decisions of other people, and that strikes me as clearly not true. Actions that change the behavior of large numbers of people–collective actions–matter. If I caused a large number of British people to vote Labour such that there’s a significant chance that my actions swung some elections, this would matter and I would deserve credit. But the individual voters who were influenced by me would still, at the individual level, have taken useless action. They would not be to credit, and to credit them would imply that you are crediting each voter for the actions of other voters, decisions they did not make and cannot be held responsible for.
You may not find any of this persuasive, but this is genuinely my response. I’m just not particularly moved by the point, because I don’t see anything compelling in giving one individual blame or credit for the actions of another whom the first individual did not in some way influence. We may just be at an impasse here, as our intuitions seem to be very different.
To borrow your fire and thimble metaphor… If I was the only person with a thimble of water you would be quite right, and it would be totally pointless to throw it on the fire. But, as you say, we are surrounded by millions of other people with thimbles. We also know from past experience that lots of these people certainly will throw their thimble, we just don’t know how many. We also know that if enough people (let’s say at least 50% + 1) throw their thimbles, the fire will be put out. Now, let’s say I want the fire to be put out and I have to decide whether to throw my thimble or not. This is a totally different situation to the one where I’m the only person with a thimble. Rather than being a totally pointless foregone conclusion, my decision is now more like a gamble. If I throw my thimble I’m taking a slight risk, as if not enough others do the same then the fire will not be put out, and I will know, with hindsight, that I’ve wasted my energy and might just as well not have bothered. However, if the fire is put out, my knowledge of physics and of the effect that water has on fires, plus the fact that my thimble was no different to anyone else’s, will allow me to know intellectually that the water in my thimble must have put out part of the fire. Knowing what I know about fires and water I would need a very good reason to think otherwise! The undeniable fact that if I hadn’t thrown my thimble the fire would still have been put out, doesn’t change this in the slightest.
What you seem to be saying, in mathematical terms, is that one vote accounts for exactly 0% in the results of an election (i.e. it makes no difference whatsoever), but that if you add up enough of these 0%s you end up with 50%. Now I’m not a mathematician, but it seems to me that either there’s something very mysterious and supernatural going on here, or your original premise that one vote accounts for exactly 0% is incorrect.
You say I’m “talking about a series of individual acts as if they were a collective action”. Well yes, what is a collective action other than a series of individual acts taken together? You also say you “don’t see anything compelling in giving one individual blame or credit for the actions of another whom the first individual did not in some way influence”, and that my view implies “that a person can be given moral credit or blame for the decisions of other people”. But I’m not saying any such thing. Each individual can only be given moral credit or blame for his own decisions, and the level of credit or blame will vary according to the importance or otherwise of the consequences of those decisions. There are big decisions and small decisions, and one individual deciding whether to drive is a small decision and earns him a small amount of credit or blame. A guy who opens a polluting factory, or a politician who gets cars banned from the city centre will have taken a decision with far greater consequences, and will deserve proportionately more credit or blame. In other words I’m not denying that one guy with a hose is a much more effective way of putting out a fire than a series of unconnected individuals with thimbles – but if there’s no hose available, the thimbles may also get the job done.
I think that’s about as good a case as I can make for this viewpoint, and you’re probably right that we’ve reached an impasse. It remains an interesting paradox, but maybe it’s time, yet again, to agree to differ. That will allow you to turn your attention to (and your metaphorical hose on) all the British conservatives who seem to have discovered this post.
I’ve mixed my definitions a bit–I originally used “collective act” to refer to a bunch of individual decisions that add up to something but for which no one individual decision is meaningfully causal, and then in my most recent comment I used “collective act” to refer to one individual decision that changes the behavior of a large group. Let’s instead call this second act a “hose action” and the first act a “thimble action”.
I don’t think a person can receive blame or credit for the effects of other decisions of the same kind as his own, only for the direct effects of his own decision. So if a person refrains from driving, a person is to credit exclusively for the carbon emissions saved in his own case, and not for any other carbon emissions saved by any other people in any other cases. In a thimble action, a person’s individual decision has no substantive consequences. It is only the fact that a large number of people happened to have made the same decision at the same time that has consequences. “Why did Bob vote Labour?” is a very different question from “Why did 500,000 people vote Labour?” The first is a psychological question, the second is sociological. I do not think a person’s psychological decisionmaking process can receive credit for sociological processes. I do not think that a thimble action is morally divisible into its individual subsets. The whole is more than the sum of its parts.
We might be going in circles at this point–we seem to be looking for better ways to say the same things to each other. In any case, it’s been interesting to underline where the difference in view is.
I don’t tend to read blogs like this and now feel justified doing exactly that. It is amazing the lengths individuals will go to mislead people.
In 2011 the IMF warned Osborne that austerity on the scale we have seen in the UK would be bad for Britain. They more recently apologised, and argued that if France had done what Osborne did that they would be in a better place. In fact we have steadily had the fastest growing European economy until the beginning of this year. We are light years ahead of France and other European countries other than Germany. If we had not had such austerity we might not have one of the lowest unemployment rates in the world, we might not have the highest number of people in work since records began in the UK. You think that is bad? And before you talk about 0-hour contracts; the proportion of the population on these are tiny, and for many people like students, it works very well – ie there is no argument here.
Your arguments are a complete non sequitur. You try to show how these different figures are a continual narrative but thy are not. The IMF has been hugely praising of the coalition government for trying to balance the books and in getting people into work and growing the economy faster than any other developed nation. If Labour comes to power there may be a better quality of life but my kids will still be playing the deficit off. And the quality of life improvement will be the legacy of the coalition government and not that of any Labour government. It is amazing the things people can write on the internet and be taken seriously. Shame on you!
Did you read this post? The coalition government backed off austerity after 2012 and growth recovered thereafter. The IMF has not retracted any of its research about the multiplier or about the relationship between austerity and growth. The IMF has praised the coalition for backing off austerity. Lagarde praised the coalition for reducing its cuts, making them:
“in the pace that is appropriate to the economy”
I mentioned this reduction in the amount of austerity being done in the post, it was a good move by the coalition, and it has given the conservatives a chance to win reelection. What it does not erase is the massive mistake made from 2010-2012, nor does it erase the difference in what is being planned–the coalition is going to make larger cuts in the first two years than it made from 2012-2014, so they will no longer be “in the pace that is appropriate to the economy”. The conservatives have been misleading the public, claiming that better performance over the last couple years is a credit to the initial austerity from 2010-2012, when the reality is that this growth is due to the 2012-2014 alleviation. 2010-2012 put Britain in a deep hole–even with the recent growth, Britain is still weaker relative to France than it was in 2008, as shown in one of my graphs.
You state that the government decided to reduce austerity on 2012. I can understand your confusion, as you do not live in the UK, but austerity is still very much a part of the Conservative agenda. teachers, nurses and other public sector workers have had a pay cut in real terms throughout this government’s term, and welfare has been actively reduced. there have been cuts to pensions, and many other austerity measures which impact on the lives of citizens every day.
However, what your blog fails to identify is that many citizens were angry with the previous Labour government because we had experienced the longest lasting period of economic growth in British history, during which the government and the people were better off than they had ever been, and they had no fiscal reserves. They were force to borrow significant amounts of money and drive the nation into a debt that my grandchildren will be paying off sue to poor financial planning. If they had been more sensible with the wealth of the nation when it was flowing in then the Conservative government would not have been forced into a position of austerity. Even during this period the economy has grown, and comparative to many other European nations we have a stable economy, with high levels of employment and a welfare state and NHS which are still functioning.
Much of the privatisation of the NHS and education happened under a labour government, and this has had a devastating impact on the finances of the nation as we are now forced to bail out private companies that cannot run the establishments they have taken over.
While I am undecided who to vote for at this stage, I am certain I don’t want to give the Labour government another go at running this country into the ground. I am a socialist, but I am convinced that the Labour party are anything but a socialist movement, and that at this stage, we may very well be better off with the devil we know.
The important statistic is the amount of spending relative to the size of the economy. Cuts in some areas can be offset by increases in other areas. The statistic I give is that important statistic, and it shows that the rate of cuts drastically changes between the beginning and the end of the parliament. Now, you may have seen cuts to services in some specific parts of the government even during the years where austerity was slower, but what we’re looking at is the total amount of spending relative to the size of the economy.
Growth during the Labour government wasn’t particularly impressive, when we look at the history:
http://www.tradingeconomics.com/charts/united-kingdom-gdp-growth-annual.png?s=ukgrybzy&d1=19560101&d2=20151231
It was however much better than what we’ve seen in the last five years.
The debts are also not especially large relative to what we saw in the 60’s:
Indeed, the US ran larger debts relative to the size of its economy than the UK did (and it still does).
Labour is far from perfect (too much privatization, too much deregulation), but it is still marginally better than the Tories, and that counts for something.
[…] By Benjamin Studebaker. […]
When you write that austerity was pursued “because the Conservative Party wants to cut the welfare state so it can reduce taxes on the rich and for no other reason”, you just sound like an idiot. If you can’t see any other reason why they might be pursuing retrenchment then you will remain an aspiring political theorist for a long time.
What other reason makes sense in view of the evidence presented here? We know austerity is anti-growth and we know austerity hinders efforts to reduce debt and deficits. Do you think Cameron is not aware of the IMF research? Is he not aware of what Oxfam is saying? What other purpose might it serve? Once you eliminate the impossible, whatever remains, no matter how improbable, must be the truth. The only alternative explanation I can think of is that Cameron and the conservatives are deeply ignorant of the research, and that would be inexcusable for people in their position.
Well what’s your explanation for Labour wanting to make cuts? Do they hate poor people too?
I suggested in the post that Labour is supporting cuts because the Conservatives have created a false narrative in British politics that support for cuts is required for political seriousness. Labour has failed to challenge that narrative.
So you don’t think there’s any mileage in the argument that the 97-10 Labour administration spent beyond its means, such that, when the global financial crisis hit, the UK’s public finances were out on a limb – and therefore cuts had to be made to stop us going the way of Greece?
Not in the slightest–a Greek style crisis cannot happen to a country with an independent currency. The UK once ran a debt that was more than 200% of its GDP (today it’s about 90%, and in 2010 it was about 80%). It was able to deal with that debt while simultaneously creating the NHS and the modern welfare state through a series of currency devaluations combined with economic growth and mild inflation. Greece cannot devalue because it doesn’t control its own monetary policy–the ECB does. Greece also has other problems Britain doesn’t have. It has a huge corruption problem and it’s been running a really negative current account because its economy is not competitive:
By contrast, the UK’s current account deficit is smaller than America’s:
The comparison of the UK to Greece was never legitimate. Those who made it were either unaware of economic research or disdainful of it for ulterior reasons.
Charlie: No I don’t think there is much milage in that considering it is the opposite of the truth. They did save money.
http://www.theguardian.com/news/datablog/2010/oct/18/deficit-debt-government-borrowing-data#img-1
What’s your argument? That Labour ran a budget surplus for a few years at the start of Blair’s premiership, and therefore that counts as “saving money” overall?
Reblogged this on Tom's Pensive and commented:
An outsider’s view to the UK economy
Interesting I see nothing here reference selling Gold cheap and robbing pensions. All achieved under 13 years hard Labour.
Labour’s far from perfect, but at least Labour produced higher economic and real wage growth.
GDP under Labour (pre-crisis):
http://www.tradingeconomics.com/charts/united-kingdom-gdp-growth-annual.png?s=ukgrybzy&d1=19970101&d2=20071231
GDP under Labour (post-crisis):
http://www.tradingeconomics.com/charts/united-kingdom-gdp-growth-annual.png?s=ukgrybzy&d1=20090101&d2=20101231&type=line
GDP under the Tories (first two years of austerity):
http://www.tradingeconomics.com/charts/united-kingdom-gdp-growth-annual.png?s=ukgrybzy&d1=20100101&d2=20121231&type=line
Real Wages (grew under Labour, falling under the Tories):
Those real wages are of course impacted by the open door to EU unemployed happy to work in UK for minimum wage plus Tax Credit top up. Employers have little reason to pay much more than that when they can attract high quality but cheap recruits.
I don’t think immigration is the primary cause–the UK had similar net migration figures during the 00’s before the crisis:
But real wages grew during the early 00’s, and they’ve fallen in the last few years. This implies that there are other forces doing the heavy lifting.
You raise some interesting points in the article but I feel your comment above highlights a fallacy in your use of statistics and is a possible reasoning for your overall conclusions lacking credibility.
You are mistaking correlation with causation by assuming “Wages increased whilst Labour were in power >>> Labour policy alone increased wages”
At the same time “Wages decreased (real term) whilst Tories were in power >>> Conservative policy alone decreased wages”.
This is far too simplistic as it totally disregards the economic cycle (the one of Boom & Bust which Gordon Brown said he would eliminate), also placing too strong a weighting on Government fiscal policy.
I would be interested to see what would happen if you decomposed the time-series, removed cyclical growth trends and subsequently compared wage growth under each Government’s term. It could indeed still prove your point, but it would be a much more fair comparison than the graph above which simply uses inflation.
In addition to this, you make the assumption that all Government spending leads to growth, and therefore any austerity measure leads to a reduction in said growth. However, this is just not true. Efficiency savings that can be made by improving procurement processes in central Government and NHS spending is a good example.
I liked the article but you need to take into consideration the limitations of some of the statistics you use, and should really point these out to the reader to stop your view coming across as partisan.
Rather blinkered reporting of the facts. How about the fact that it was Labour that introduced tuition fees, the reason that we need tuition fees is because Labour were driven to getting 50% of people to university, irrespective of whether they were do a degree that would be of any benefit.
Labour are in favour of £9,000 tuition fees.
The one good thing about tuition fees is that it has given all universities huge sums of money to spend on capital projects that have kept the construction industry afloat – you could even say that it was government spending through the back-door.
On the plus side you did work out how to spell Labour half way through.
Agreed that Labour was wrong to introduce fees, but Labour is now promising to reduce them while the Tories are not. The government could have spent that money on construction directly without putting young people in debt (like Obama did in his American Recovery and Reinvestment Act).
Apologies if my American-ness sometimes sneaks into my writing.
I’d also like to share this chart with you, showing that real wages have actually fallen in the UK under the coalition (they rose under Labour):
Fantastic stuff. But have you heard of the whole country of Scotland? 😉
Glad you enjoyed it! 🙂
Great thing about statistics is you can make them show whatever you like, the labour government was overspending before the crash, the labour government did nothing to control corporate tax avoidance or the corrupt greedy banking system for the 10+ years they were in power.
But then, you look at the deficit before the crash and it was not historically unusually high. It’s a far more important issue that labour deregulated the banks, Cameron urged more deregulation while they were in power and now Osborne has done nothing to protect us from that vulnerability after. While we’re all arguing over deficit and spending, the next global crash will still hit us just as hard, and drive up both.
Labour should have regulated the financial sector better, but the coalition hasn’t passed significant financial reforms either. Even if the UK had regulated finance more tightly, the crisis still would have happened anyway because of US regulatory policy (though perhaps it would not have hit Britain as hard).
UK debt to GDP was actually quite low under Labour relative to British history:
In the year before the crisis (2007), the UK budget deficit was 2.7% of GDP. This is about as large as the US budget deficit in 2007 (2.6% of GDP). Such a deficit can easily be maintained w/o adding to the debt burden if inflation and economic growth combine to be more than 2.7%. In 2007, annual GDP growth was about 2.5% and inflation was about 2.5%, so combined the government could support a deficit of 5% of GDP without seeing a significant rise in the debt burden relative to the size of the economy. All of this changed when the economic crisis sent GDP growth plummeting, but if you’re Labour in 2007, the budget looks pretty great. Add to this that the crisis was going to happen irrespective of what Labour does, and it doesn’t make much sense to blame Labour (though, as you say, things would have been better with tighter regulations).
[…] article is written by Benjamin Studebaker and originally posted in his own […]
Hi there. Interesting article, but just have a query about one bit:
“This is remarkable, considering that UK borrowing costs are at historic lows, indicating a high level of confidence in the UK’s solvency (and a low level of confidence in its future economic trajectory)”
I’m not sure if I’m missing something here, but surely low borrowing costs imply a high level of confidence in it’s future economic trajectory. If there were low confidence, wouldn’t costs be higher to compensate for the risk of our economy tanking?
Bonds are considered safer (and lower yield) than stocks, so investors tend to buy bonds when they are worried about the stock market, and they tend to be worried about the stock market when they are worried about the wider economy. The government is much less likely to become insolvent than private companies are. Bond yields go up when there is a significant risk that the government might become insolvent or when the economy is doing well and people prefer to hold stocks.
Interesting!
I wonder if you have looked at the SNPs fiscal policy and its impact on a future Labour government?
To the SNP’s credit, it actually promises to increase spending by 0.5% per year and to raise the minimum wage. If there were to be an SNP/Labour coalition, this could have a substantive positive effect on government policy. If there were to be a Labour minority government, Labour could pass cuts with Tory support.
I am not highly economically literate, but articles like this are a huge help to my growing understanding.
Could you explain in a little more detail the final graph? I am not able to understand about confidence in UK solvency and low confidence in future outcomes. Why is this linked to low cost of borrowing?
Thanks.
Bonds are considered safer (and lower yield) than stocks, so investors tend to buy bonds when they are worried about the stock market, and they tend to be worried about the stock market when they are worried about the wider economy. The government is much less likely to become insolvent than private companies are. Bond yields go up when there is a significant risk that the government might become insolvent or when the economy is doing well and people prefer to hold stocks. So low bond yields mean one or both of two things:
1. The government is considered solvent.
2. Investors lack confidence in the stock market.
That’s a great explanation, and thank you.
I haven’t understood that aspect of borrowing before. I was aware, vaguely, that Britain had a credit rating, which worsened over the coalition’s term, and I mistakenly thought that meant all borrowing was more expensive.
Glad it helped. The ratings agencies do not set the borrowing costs, though their ratings can influence investors’ perceptions of solvency. Clearly this hasn’t happened in the UK case, as the rates have stayed low.
Are you trying to solve a problem or just win a argument.
http://www.wired.com/2011/05/the-sad-reason-we-reason/
I try to win arguments in service of solving problems. I firmly believe that political writing should make policy recommendations that, if followed, would promote better life outcomes for people.
Your piece is both light on objectivity and remarkably naive. Perhaps if you lived here, had a vote, or held any other purpose in light of your narrative, you may gain more credibility. I am not a Tory supporter, nor Labour, but you have failed to account for so many other things which affect the current economic situation that I cannot take this post seriously.
For example, the cost of the war in Iraq, which was not supported by the vast majority, or even the ‘long-term’ factors. To quote (inaccurately) that it was the Tories who brought in university fees is absolutely ridiculous.
Get your facts right, research beyond short-term economic figures, and avoid such a patronising ‘I know better than the UK voters’ tone, and it may be worth a read.
I lived in the UK for three years while doing my BA at the University of Warwick (from 2010 to 2013) and will be returning this fall to do my PhD at the University of Cambridge. I have seen first hand the effects of austerity in the UK.
I never said the Tories introduced tuition fees–I said they raised them. Labour introduced tuition fees during the 90’s and they were wrong to do so.
The Iraq War was a mistake by Labour, but the Tories supported that war at the time. Even with the cost of the war, UK debt to GDP was not very high under Labour compared with British history:
Is that a sufficiently long-term analysis?
Much of your argument is very interesting. Generally I don’t think austerity works. But this graph is not particularly useful. The bonds market, and the status of the UK economy is entirely different now to the 18th century. The spikes in the 20th century are the direct result of the two largest wars ever fought. Arguing British debt is not high as it is is lower than during/post WW2 gives little comfort.
I think it should give a great deal of comfort–even with a debt burden we struggle to imagine today, Britain was able to rapidly reduce its debt load. It didn’t cut the welfare state to do this–the NHS and the benefits system were, for the most part, created after WWII. So how did Britain get the debt burden down? The answer is that it repeatedly devalued the currency. This solution made British exports more competitive and helped drive growth throughout the second half of the 20th century. The debt level in 2007 was near an all-time low, and even in 2010 the debt load was not substantively higher (or less manageable) than the debt load in the 60’s. In the early 90’s, when Britain devalued and came off of ERM, the British debt burden fell substantially without the need for budget cuts:
http://www.tradingeconomics.com/charts/united-kingdom-government-debt-to-gdp.png?s=gbrdebt2gdp&d1=19850101&d2=19921231
Indeed, during this period spending rose:
http://www.tradingeconomics.com/charts/united-kingdom-government-spending-to-gdp.png?s=unitedkigovspetogdp&d1=19900101&d2=19921231
This indicates that even if a government is unsuccessful in delivering high enough growth rates to shrink the relative size of the debt, it can use monetary policy to reduce the relative size of the burden, provided it maintains control over its own currency.
There’s no doubt some good points to your post Benjamin, but the posts view is so cherry picked that it is cringeworthy to read.
All of your graphs show recent history, but when it comes to national debt you choose to mask the HUGE increase in debt under the labour government, by using a graph dating back to 1800?!
Your graphs are great, but you miss out a huge array of statistics that show benefits of the current government, wouldn’t you say? I guess that’s a key component that you have chosen to use to create such a one sided argument.
I see you show the level of real wages, but you don’t show that there’s been an increase in job creation, and a decrease in unemployment? I guess that a graph on employment wouldn’t help your one sided analysis though? Or do you actually think that unemployment levels are irrelevant to this post?
Rob, as I just said in the comment above, I think the historical context is interesting and very useful, because it invites us to think about how the UK previously handled much larger debt burdens. The answer is that it often used monetary policy to devalue the currency, boosting exports and GDP growth while simultaneously reducing the relative size of the debt. This is an interesting strategy–it allowed the UK to build the welfare state during the 50’s, 60’s, and 70’s while simultaneously reducing the debt burden.
You’re right that the government has reduced the unemployment rate, but the employment-population ratio, which measured the share of the working age population that is employed, has yet to match pre-crisis levels:
http://data.worldbank.org/indicator/SL.EMP.TOTL.SP.ZS/countries?page=1
And the jobs that have been created are not very well-paid. An economy that is replacing good jobs with bad ones is an economy that is not meeting the needs of its citizens.
In sum, I think the unemployment rate is misleading. This argument is frequently made in the the US, where the employment-population ratio remains deeply depressed. There’s some dispute over whether it’s structural or cyclical–I think the evidence supports a mix. Here’s an example of this kind of argument:
http://krugman.blogs.nytimes.com/2014/02/03/demography-and-employment-wonkish/
Anyone posting under the umbrella of anonymity is clearly a troll… It is clear you are not a Labour supporter, hence your criticism.
I don’t even care who you support, you are the type of person who fails in life and therefore your choice will not succeed.
You are a nob, sir, and it doesn’t matter how many syllables you use, you are still destined to fail in life.
If your are a car, you are a Lada, or FSO.
If you area premier league side, you are Newcastle…
If you are high street store, you are poundland.
If you are music, you are the village people
If you are economic policy, you are AUSTERITY
If you are a vote, you are SPOILED
A real nob. you are.
I think this is ignoring some of the big facts. The last Labour government did overspend, that has been recognised by many economists and independent organisations. And this government has had to make hard sometimes unpopular (but right) choices to get the economy back on track. That can be seen through the UK now being the fastest growing major advanced economy in the world. Also, the IMF has praised this government for sticking to it’s plan and has said that it should continue with it.
When we look at the big picture, it’s clear that debt levels under Labour were not very high compared with British history:
In the year before the crisis (2007), the UK budget deficit was 2.7% of GDP. This is about as large as the US budget deficit in 2007 (2.6% of GDP). Such a deficit can easily be maintained w/o adding to the debt burden if inflation and economic growth combine to be more than 2.7%. In 2007, annual GDP growth was about 2.5% and inflation was about 2.5%, so combined the government could support a deficit of 5% of GDP without seeing a significant rise in the debt burden relative to the size of the economy. All of this changed when the economic crisis sent GDP growth plummeting, but if you’re Labour in 2007, the budget looks pretty great.
Claims about recent growth rates post-2012 are not particularly relevant when we’re evaluating austerity, because the coalition government halted austerity completely from 2012-2013 and reintroduced it at a much reduced speed from 2013-2014. Even in recent years, there has been no recovery in real wages, so ordinary British workers have not enjoyed the benefits of recent growth:
I think you have missed one very important point: the extraordinary growth of state spending as a percentage of GDP which rocketed from 34.5% in 2002/3 to an astonishing 47.9% in 2009/10. A lot of the myth of cuts and austerity has been down to the current government attempting to bring that figure down to more manageable levels. I agree that a lot of this increase was due too the Crash ( but, as far as the regulatory authority is concerned where did the buck stop?) . If truth be known , there was still a large increase before hand, a trend that was shaped by Labour’s spending increases for 10 year, cynically designed to build up and reward a public-sector workforce that could be relied upon to return the favour at election times. It failed.
Put the 47.9% figure into historical context–spending was higher under Thatcher:
http://www.tradingeconomics.com/charts/united-kingdom-government-spending-to-gdp.png?s=unitedkigovspetogdp&d1=19730101&d2=20101231
And if we take the crash out, Labour’s spending looks even more reasonable:
http://www.tradingeconomics.com/charts/united-kingdom-government-spending-to-gdp.png?s=unitedkigovspetogdp&d1=19730101&d2=20071231
Sorry, but this is an appalling article, haughty in tone, naive in understanding and wrong-headed in conclusions (I also HATE your If-The-Guardian-Did-religion-type headline).
I’m afraid I haven’t much time to make my points here, but a few comments: the evidence you choose to present is hopelessly select. So while you, say, compare the UK to the US at one point, and talk about certain time periods, you fail to acknowledge much more salient and meaningful comparisons. Firstly, comparing the US and UK is your most obvious failing: for one thing, the US is of course a good deal MORE capitalist than the UK; for another, the US administration didn’t have to deal with the mountain of debt that the incoming UK administration did – a huge budget deficit left behind by, yep, the Labour party, who, bizarrely, you seem to favour in winning the election.
You quote from Oxfam. Blimey, is that the best you can find? An organisation that has long been taken over by militant socialists whose career is poverty. It’s in their interest to talk about poverty, and talk it up as much as possible. It’s their BUSINESS. (And I can’t articulate just quite how disgusting I find it that you buy into the idea that people in fourth largest economy in the world are in true poverty. Get a life, expand your view, go and visit a few countries where kids lie in the gutter in rags – that’s real poverty, not a country where poverty means iPhones and ready meals and widescreen televisions.)
Why not mention globally respected publication The Economist, which has just endorsed Cameron? Or the Financial Times, which has just endorsed Cameron? Or pretty much any of the business pages of the UK broadsheets, who have endorsed Cameron? Or the hundreds of businesspeople who have endorsed Cameron in letters to national newspapers?
The truth is that in the UK we have had a jobs miracle over the last two years. Two million jobs have been created since the last election; three million of the lowest paid have been moved out of income tax altogether; investment by companies is at a record high; we are growing at many times the rates of our European competitors.
Perhaps you’d prefer we were more like socialist France, where unemployment is 10% and rising (here it’s 5% and falling)?
Love to say more but I have to go. I really hope Cameron wins on Thursday, not least so arrogant and disingenuous people like you will be made unhappy by it.
J Binns, UK
‘And I can’t articulate just quite how disgusting I find it that you buy into the idea that people in fourth largest economy in the world are in true poverty. Get a life, expand your view, go and visit a few countries where kids lie in the gutter in rags – that’s real poverty, not a country where poverty means iPhones and ready meals and widescreen televisions.’
Ignorance at its finest.
The headline is a bit over the top, but you’ll have to admit it was effective–this is the most popular post I have ever written on this blog.
The US passed the American Recovery and Reinvestment Act, committing over $800 billion in stimulus. The UK did austerity. This accounts for the difference in outcomes. I also compared the UK to Germany and France, both of which have done better and are far less capitalist than the US.
The US had a larger debt burden than the UK in 2010–US debt was 87.1% of GDP in 2010:
http://www.tradingeconomics.com/charts/united-states-government-debt-to-gdp.png?s=usadebt2gdp
While the UK’s debt was only 67.1%:
http://www.tradingeconomics.com/charts/united-kingdom-government-debt-to-gdp.png?s=gbrdebt2gdp
Even today, the UK has a smaller debt burden than the United States had five years ago, and the US debt burden has since grown to be larger than 100% of GDP. Yet the US has enjoyed higher growth rates because of its more expansionary fiscal policy.
I beileve relative poverty matters because there is extensive research that supports this view. Rich countries with high inequality and high relative poverty have higher rates of mental illness:
http://www.equalitytrust.org.uk/sites/default/files/styles/690/public/mental%20illness.jpg?itok=i-9-Up6i
Higher rates of drug use:
http://www.equalitytrust.org.uk/sites/default/files/styles/690/public/drug%20use.jpg?itok=EGxvOrzp
Higher rates of obesity:
http://www.equalitytrust.org.uk/sites/default/files/styles/690/public/obesity.jpg?itok=5DBm0TE4
Lower test scores:
http://www.equalitytrust.org.uk/sites/default/files/styles/690/public/education.jpg?itok=xoXtkztp
Higher rates of teenage pregnancy:
http://www.equalitytrust.org.uk/sites/default/files/styles/690/public/teenage%20births.jpg?itok=l2HK1dWx
Lower rates of social mobility:
http://www.equalitytrust.org.uk/sites/default/files/styles/690/public/social%20mobility.jpg?itok=K6FVJGBK
These are all serious problems. No, people in rich countries are not starving to death in mass numbers, but they are significantly worse off as a result of government policies that create relative poverty.
The truth is that British workers have seen their real wages fall under the Tories:
The jobs being created are low paying, and they only began to be created once the coalition backed off of austerity in 2012. France is doing better than the UK relative to its position in 2008:
https://europeansnapshot.files.wordpress.com/2014/11/real-082014-10-26.png?w=474&h=356
Something you might want to look at with regard to wages is the link with appallingly productivity growth. The economy in the UK has generally retained jobs, and as a result (partial – obviously their are other causes as well) productivity growth has been very low. Low productivity growth generally means low growth in wages.
It is more than possible to argue however that it low wages for the last 5 years are an acceptable price to pay for more jobs.
You’re right that productivity has been appalling since the crisis started, and that the UK retained jobs during the recession more than many countries did. But this should, in theory, have given the UK a head start in returning to trend, and instead productivity and wages have both languished for far too long.
The last Labour government presided over an artificial credit driven boom (almost doubling state spending over a 7 year period). The unspoken intention was to create a payroll vote dependent on government, I.e Labour, largesse. When the crash came, the monies that should have been a result of that boom did not exist. The last election would have been a good one to lose but the Coalition has played a good game with a lousy hand. There is a saying in this country – “Tories – sorting out Labour’s cock ups for 90 years” – and, largely, it’s true.
The facts don’t support this take. Debt levels under Labour were low compared with British history:
In the year before the crisis (2007), the UK budget deficit was 2.7% of GDP. This is about as large as the US budget deficit in 2007 (2.6% of GDP). Such a deficit can easily be maintained w/o adding to the debt burden if inflation and economic growth combine to be more than 2.7%. In 2007, annual GDP growth was about 2.5% and inflation was about 2.5%, so combined the government could support a deficit of 5% of GDP without seeing a significant rise in the debt burden relative to the size of the economy. All of this changed when the economic crisis sent GDP growth plummeting, but if you’re Labour in 2007, the budget looks pretty great.
I agree that Labour should have supported the growth less with credit and more with wages, but the Tories have actually reduced real wages in the UK significantly:
This makes Britain even more reliant on credit than it was under Labour. It makes the problem you’re talking about worse, not better.
Minor error in your statement:
“So in 2010, the British elect a coalition government led by the Conservative Party’s David Cameron.”
Nobody elected the coalition, the coalition formed because none of the parties gained a majority.
All I mean to say is that the coalition formed as a result of the election. You’re technically correct that British voters did not choose the coalition.
Sorry, I haven’t read all the comments, but why have you compared growth between 2004 and 2008 (the height of the preGFC boom) with growth between 2010 and 2013 – a period in which the crisis in the Eurozone reached its peak (esp. 2011-2012) and there was considerable danger of a double dip recession for that reason on its own?
I skimmed after that as that comparison is so completely absurd that it discredits this whole piece.
I agree the financial crisis was not Labour’s fault and that things were worse here partially because of the size of our financial sector (which partly accounts for differences in UK decline relative to Germany). But even more than that, cuts were needed because of the size of our public sector (esp the number of public sector jobs) – and that was all Labour’s fault. Funding employment with public money is not sustainable long term and falls apart as soon as there’s a downturn.
So in summary, you appear to have completely exonerated Labour for its part in the UK recession on the basis of international conditions, whilst ignoring international conditions (Eurozone crisis – you barely mention it) impacting the Tories’ growth plans, and made bogus comparisons along the way.
Balance the debate!
I don’t think that the 04-08 growth rates were unsustainable. If we look at British history, the 04-08 period is not much of a boom:
http://www.tradingeconomics.com/charts/united-kingdom-gdp-growth-annual.png?s=ukgrybzy&d1=19560101&d2=20081231
During 2010-2013, many countries performed better than the UK did, including some Euro members, so it stands to reason that the coalition could have done better than it did (why didn’t the UK do as well as France or Germany during this period–it wasn’t on the Euro, is should have easily been at least competitive):
UK debt levels were not out of line with historical experience either:
Public sector jobs were about even with the early 90’s–private sector employment saw much larger gains under Labour than the public sector did:
I do think Labour could have done a better job regulating the financial sector, and I do think that Labour should have relied less on credit and more on wages to drive growth. But the Tories are even worse about this–they haven’t substantively upgraded regulations and they’ve significantly reduced real wages:
My point wasn’t that growth from 04-08 wasn’t sustainable, it was that the comparison to 2010-2013 isn’t indicative of anything to do with government policy. It’s like comparing boom years with bust years. In science, it would not be a “fair test” – you’ve changed the substances and the conditions, so can’t determine what anything contributes.
The answer to your next point you gave yourself – the size of our financial sector meant we fell further and took longer to recover than Germany, France, etc – your graphs show that. And perhaps you should stretch it on to show the picture in Germany, France and the UK today?
I agree re debt levels, but it wasn’t great to borrow when we could have had a surplus. Crucially though, it’s about what the money was spent on rather than just the debt level. And much of it was wasted rather than invested in things which were sustainable/growth generating.
In the early 1990scwe were in/coming out of a recession after dropping out of the ERM and the government was spending its way out (as governments do in usual economic cycles as we all know) – so that accounts for large public sector employment then. Labour didn’t need to grow public sector jobs in the 2000s and wasted money doing so – which relates to the debt point.
I don’t know what you mean about not upgraded regulation – there has been an unbelievable amount of regulation of the financial sector since 2008. Much of it is in fact at a European or international level (MiFID, AIFMD, basel iii, MAD, BRRD, etc). If you mean there’s no Volker rule, that’s true. But actually that’s not really required in the UK as retail banks are usually different companies in the group to the investment bank – so consumer money is already separated.
Wages I think reflected sentiment in the UK more than anything else. They are rising now and hopefully that will continue!
If labour get back in, they’ll inherit a strong economy (as in 97) and they main job will be not to mess it up again!
It’s for that reason that I made the further comparisons of UK performance from 10-13 to the performance of other countries during that period, when they were subjected to the same global macroeconomic conditions. The UK compares very poorly with other countries during that period.
The Netherlands is more financialized than the UK, but it did better, and Germany’s economy was hit harder by the crash, and it did better:
I included a second graph showing that even with the improvement after austerity was halted and then reintroduced more slowly, the UK still trails France and Germany relative to its 2008 position:
https://europeansnapshot.files.wordpress.com/2014/11/real-082014-10-26.png?w=474&h=356
It has passed the Netherlands, but this is not surprising because the Netherlands introduced austerity right around when the UK was slowing it down:
http://www.reuters.com/article/2013/08/16/us-dutch-economy-idUSBRE97F07F20130816
If we look further back than the early 90’s, we can see that spending by Labour as a percentage of GDP was not at all out of line with British historical experience:
http://www.tradingeconomics.com/charts/united-kingdom-government-spending-to-gdp.png?s=unitedkigovspetogdp&d1=19730101&d2=20071231
The early 90’s stimulus only partially restored a substantive cut in spending made during the 80’s under Thatcher. That spending cut played an important role in creating the recession to begin with.
You make a good point about the Volker Rule.
I would like to see the government take steps to reverse financialization, shrinking the role the financial sector plays in the economy. For instance, I think the UK should participate in the EU financial transaction tax and possibly levy additional taxes in an effort to shrink the sector. If it does not do so, I think the UK is setting itself up to suffer severely in a future crisis, and I think too much financialization is a drag on growth. Even with recent performance, the UK’s economy is not particularly healthy by historical standards:
http://www.tradingeconomics.com/charts/united-kingdom-gdp-growth-annual.png?s=ukgrybzy&d1=19560101&d2=20151231
This guy would be doing himself a huge favour if he didn’t waste his money on a PhD if those are his honest opinions.
a) UK Benefit systems is widely exploited hence Cameron cut it. Some people on benefits are better off than those with a job, so why would these people ever look for a job unless their free income was cut.
b) He increased the minimum wage not reduced thus increasing salaries not reducing as this fool claims. The current inflation is 0%, which means there is no need for a further salary increase that Labour promises. All this will do is hurt businesses, and lead to lower rate of employment.
c) The economic growth comparison he shows of Labour is before the recession. I like how he misses out the two years after the recession hit while Labour were still in power.
d) Labour screwed the country by going to never ending wars and also killed millions of innocent people due to it. They ruined millions of families and destroyed their country.
UK borrows £500m daily to run the government, and country needs to make cuts or the debt will never ever reduce. It is easy for Labour/any party to promise free money, salary increases when it is purely to win an election but all this will do is hurt the country in the long run. Look what happened when people voted for Lib Dems free tuition, these power hungry idiots will say anything to win.
Apologies for the huge essay but these idiots who love to throw around false information just cos he wants to study a PhD irritate me.
a) Only 0.7% of the welfare budget is spent fraudulently:
http://www.ibtimes.co.uk/uk-benefits-welfare-jobseeker-s-allowance-immigrants-462373
b) Under the coalition, UK wages have fallen once you adjust for inflation:
I didn’t say anything about the minimum wage in this post.
c) I covered the performance of the UK after the crisis under Labour–it performed almost as well as the United States, until the coalition comes in and the austerity package is passed:
d) I’m also against the Iraq War, but the Tories were no better on this issue than Labour:
http://news.bbc.co.uk/2/hi/uk_news/politics/5108584.stm
When we look at the debt in historical context, it’s not very large:
I’m sure the author can defend himself, but I was inclined to answer your points:
a) Benefit fraud accounts for around 0.7% of welfare spending, and that estimate has held steady throughout Cameron’s parliament (i.e. Conservative policy has had no effect on benefit fraud). I couldn’t find any evidence to support the claim that the UK system is ‘widely exploited’.
b) An increase in the minimum wage is not the same as an increase in real wages. The former has risen, as you say, but real wages haven’t. This despite low inflation, which makes the figures even more remarkable.
c) You’re right about that one chart, but there are other charts on this post that clearly show that, even after the crash, growth under labour was faster than growth under the coalition.
d) No argument from me about the wars, but the conservatives backed all the military actions Labour undertook. So it’s hardly the case that a conservative government would have done better on that score.
Government debt under labour was nothing spectacular, or even unusual. In fact, the UK government debt as a % of GDP was significantly lower than both France and Germany right up until 2010. Debt was also consistently lower under Labour than it was when the conservatives were last in office. I found all these stats from government sources with five minutes of easy googling. Do let me know if you find anything that backs up your view.
d) the Conservatives supported the wars on the basis of the fact that they were given: it is now clear that the Blair administration lied to Parliament – thus the Tories position is irrelevant given the information they were forced to act upon. This is not true of Blair et al – 8 hours parliamentary time – let’s not forget that – corrupt charlatan Blair administration voted in by Labour supporters on ‘at least we’re not Tories’ ticket – never again
Anyone with a BA from the UK should know that to gain any credibility in such a statement you have to at least make clear references (I am presuming you did something politico-economics related, but you may just as well have done media studies for all I know). The fact is the pretty graphs you are basing the entirety of your arguments on have no value if the reader does not know they come from a credible source. Don’t get me wrong I’m not saying their incorrect, just that figures posted onto a web-site called ‘benjaminstudebaker.com’ does not encourage confidence.
Throughout this post, you can see that there are some words that are highlighted (such as “bigger problem”, “pulling it out”, “the composition”, etc.) If you click on those highlighted words, you can see the original sources for all the figures I use.
Thanks for this tremendous post. The greatest frustration of this election (indeed the whole last parliament) has been how completely the tories have managed to weave an economic fairy story, and even worse, how labour haven’t even tried to stand up for their record.
You’re very welcome, I’m glad you appreciated it. Thanks for reading.
I would like to second this. Your post backs up with some credible evidence my own frustration with how the Tories have infantilised the discussion about economic performance. To hear Osborne and Cameron talk you would think the economy was a child’s piggy bank: money in must equal money out, when in reality the money in is influenced by a whole range of dynamic factors. The idea that Labour break the economy and Tories fix it, as one of the replays suggested, is also trite nonsense. Margaret Thatcher presided over the demise of our manufacturing industry and poured our fantastic oil reserves into unemployment benefits, with consequences that we are all still feeling now.
Glad to hear you enjoyed it. Thanks for reading!
I will third this sentiment. It seems the keyboard warriors have come out in force against your coherent, and well sourced article. Part of me wonders if the robustness of the case you’ve presented is precisely the reason they are so incensed.
I’d like to fourth this. Excellent post, and I admire your dedication in responding to comments.
What’s more the National Debt holds no solvency risk to the UK.We issue are own currency.Borrowing costs are low but that’s because the BoE controls the price.
We do not have to issue debt to finance spending.
This can be facilitated through BoE purchases of gilts,and by allowing interest rates to fall too zero.
Or simply directly from Treasury.
And debt issuance if pursued,doesn’t mean that taxes have to be raised.
Otherwise everything was spot on.more astute than anything from UK press.
So after reading all that I’m even more confused on who to vote for. I frankly don’t trust any party. Prior to the last election I supported the lib dems, but I lost faith when they joined the conservatives. The conservatives have not really done themselves many favours, their campaign this time round is not that different from last time “don’t vote labour” labour has produced more explanation on what they are going to do, therefore I’m swaying that way. Realistically we don’t know who has the right way because there are so many different factors that need accounting for. so we just got to suck it and see.
It doesn’t help that there’s a lot of misleading information out there, which makes it very difficult for a busy voter (possibly with a job and/or a family) to sort it all out.
The Modern Monetary Theory view is an interesting one–it would have taken quite a bit more time to get into it, especially given how counterintuitive it is to ordinary people who have not previously encountered it. I have some sympathy for MMT. I would point out that spending is still constrained by inflation even under MMT, though I’m guessing you probably already know that.
Seems to me you’re missing a few things. First off, no two countries economies are the same, so comparisons only show so much. Germany, for example, has a strong manufacturing industry and benefits from wage differentials with Spain, Italy, etc. Second, the recession here was worse than in other places for a combination of reasons rather than a single reason. It’s not right to single out one cause. Labour’s imprudent spending certainly contributed though. Third, “austerity” was required because we had a huge structural deficit caused by diminished tax receipts resulting from the crisis. Fourth, the Tories haven’t actually cut spending, they have cut planned increases in spending.
The argument that cuts in the early 80s caused a recession in the late 80s/early 90s is baffling. Where’s your logic in that? I would say that recession was caused by the international crash of ’87, the bursting of the housing bubble (and resultant negative equity), and – more than anything – high interest rates resulting from pegging Sterling to the Deutschmark until we left the ERM.
As for shrinking our financial sector – I don’t know what to say about that. You’re basically saying we should earn less money and be poorer? We should tax financial transactions to make our financial services uncompetitive, esp v the U.S. and growing Asian economies? We should deter foreign investment in our markets (that’s what taxing financial transactions tax would do -bearing in mind something like 70% of Europe ‘s financial transactions take place in London. And with all that money we won’t have anymore we should somehow maintain our standard of living and public services? As you countryman Macenroe might say “you can NOT be serious?!” Strengthening other sectors is desirable of course, but rebalancing takes time.
During austerity, the UK did not outperform Spain, even though the UK’s current account is about as healthy as the US:
Labour’s spending is overblown, UK debt was in line with historical experience under Labour:
And spending as a percent of GDP was lower than under Thatcher:
http://www.tradingeconomics.com/charts/united-kingdom-government-spending-to-gdp.png?s=unitedkigovspetogdp&d1=19730101&d2=20071231
An economic crisis does not create a structural budget deficit, it creates a temporary deficit that can be closed by the restoration of economic growth, which restores revenue to pre-crisis levels. There is no reason to think the UK could not have enjoyed pre-crisis growth–historically, UK growth often exceeded even the level of growth it achieved from 04-08:
http://www.tradingeconomics.com/charts/united-kingdom-gdp-growth-annual.png?s=ukgrybzy&d1=19560101&d2=20151231
Yet under the coalition, growth has struggled to match what was achieved under Labour, much less what was achieved in earlier decades.
The Tories have cut spending as a percentage of GDP, and that is the figure that matters. Failing to increase spending in line with population and economic growth is a reduction in spending as a share of the economy, and this is what negatively affects growth.
I did not say that cuts in the 80’s were the only cause, but they certainly contributed to the severity of the recession in the UK by reducing economic demand. There were, of course, many other factors in play.
When the financial sector becomes too large a percentage of the economy, this creates significant inefficiencies. The financial sector exists to distribute money to entrepreneurs and consumers. When the financial sector becomes too large as a percentage of GDP, too much money and talent is tied up in distribution and not enough is being consumed. This leads to bubbles and a persistent long-term demand shortfall, which hurts growth. If the government were to mildly tax the financial sector, it could reduce the size of finance relative to GDP by a couple percentage points, then redistribute the funds raised to consumers, boosting demand and thereby growth.
Yep.great article nonetheless. The Inflation risk is only met once we spend beyond our productive capacity of the economy.
Unfortunately Labour are promising to cut the deficit as well.
Also they don’t offer substantial reforms for the financial sector nor what we really need which is a land value tax to prevent asset price inflation and debt booms and busts.
Interesting article. This debate is really simple to understand. The Tories believe that to get back on track businesses need to be stimulated whilst debt is reduced. This will create sustainable jobs and wealth, and those that work will be rewarded. Labour believe that by getting more money into peoples pockets spending will increase, creating demand, jobs, and wealth. The real argument between the two is that the Tories believe that poor people are both greedy and lazy, therefore without competition and with overly protective safety nets they will never work and always be a burden on society. Labour think the opposite and everyone works hard to better themselves. But enough of my rash generalisations.
I think you have skipped a few steps in your analysis. Firstly your primary sources are rubbish. Oxfam… Seriously? You may as well cite wikipedia! Those of your sources which are credible are largely from 2012. Those same sources, such as the IMF, have all since admitted Osborne and the coalition got it right. Look at other credible sources (FT, Economist, WSJ) to balance your argument. Clearly if you are just trying to convey a viewpoint (perhaps to raise hits on your blog?) then you need to counter obvious attacks on the weaknesses in your own proposition. That brings me to point two.
For your phd, you will need to consider counter arguments to your proposition and explain why they are not credible. It is not an undergraduate course where shouting loudly and citing semi-credible sources gets you through. So if you are seriously arguing that it is fine to run up significant national debt in a never-ending spiral of indebtedness (you must be completing a politics focussed phd as there is no economic logic in your argument) then you need to explain that spending and borrowing should increase to bring more capital into society through benefits, tax breaks, etc and cite the likes of William Beveridge to justify it. Then explain the counter argument to your (and the Labour) position, noting likely primary sources, such as the FT, or the Economist, who all espouse that cuts are good and have been a success, and dispute them by examining those states, such as Germany and the US, which have not committed to significant austerity yet have also come through relatively unscathed.
Good article, written, I suspect, to gain hits and therefore, factually flawed. If you do genuinely believe what you are saying then get into the Labour manifesto and look how they articulate their points. Currently you just sound a bit UKIP (or tea party…) and just saying what some people want to hear with no concrete evidence. Good luck at Cambridge, its a lovely city.
Most of the figures I quote are official government statistics. Others come from the IMF, the Economic Policy Institute, etc. These are all quite reputable. Even if you were to discount the Oxfam figures entirely, the argument would hold. Oxfam is mostly in the post to remind the reader of human costs, but the real wage chart (which is based on official government statistics), conclusively makes the same point.
IMF is quoted praising the coalition government for reducing the amount of austerity. Lagarde praised the coalition for making further cuts:
“in the pace that is appropriate to the economy”
There has been no retraction of the IMF research on the affects of austerity, the IMF has merely praised the government for reducing the pace of the cuts.
There are a number of economists who take the view that debt never matters (these people are considered proponents of Modern Monetary Theory, or MMT). That said, I haven’t really been pushing that view, I’ve just been arguing that the debt burden is not nearly as onerous as is commonly implied. UK debt is not all that high in historical context:
Spending as a percentage of GDP was higher under Thatcher:
http://www.tradingeconomics.com/charts/united-kingdom-government-spending-to-gdp.png?s=unitedkigovspetogdp&d1=19730101&d2=20071231
A similar argument is presently being made by Paul Krugman, the Princeton Economist:
http://www.theguardian.com/business/ng-interactive/2015/apr/29/the-austerity-delusion
So I think you’ve really mischaracterized the current state of the research.
No you have taken historic examples and generalised them. The historic data graph has huge spikes based largely on wars. Have a look what was happening in 1815 to see why we needed to borrow so highly. Same again in 1914, and again in 1939. The exception being post war, when we had to continue paying off huge debts to the States as well as paying for the creation of the welfare state. The graph shows two things clearly: war costs money, which creates vast debt that must be repaid; and that the historic trend is of reduced national debt outside these times. Explain the peak in borrowing 2005-2010. It is not war, it is poor govt decisions during this period.
I agree that you need to spend to get out of the hole (and this is where most economists argue debt may not be of significant consequence). But this is done in proportion to growth, hence the Thatcher spending. If you look at your graph that shows real gdp since 2008 it appears that the UK is growing more slowly. Look at the figures pre 2008 – smaller economies grow slower, and must be balanced based on their source of income. The UK bases its growth on finance, this requires a high credit rating among other things. If the interest on your debt outstrips the gains made in gdp then that is unsustainable. So, the reason borrowing went through the roof was to attempt to get money back into the economy, and it failed in the UK model. Austerity this far has controlled the debt but we are not paying it off, we are just servicing debt interest. More cuts are required to begin to service this debt (the structural deficit).
And lastly, look at the reasons behind some of the trends we have seen, and sustainability. The French are tied into the Euro, as long as it is propped up by Germany then they will benefit. They also receive massive subsidy for agriculture, their primary industry, through the CAP. How long is that sustainable for? It is one of the primary reasons the EU needs economic reform. Lastly, I’m sure the harnessing of fracking in the States has nothing to do with the US recovery… Look at Russia, where oil revenue has kept the economy largely protected.
Reblogged this on Stereotypical Coffee Teen That Likes Many-A-Thing.
Please will you be our Prime Minister? Thanks, Bryher, UK.
You’re too kind. Thanks for that. 🙂
Fantastic piece of historical revisionism.
This is an excellent post Sir – worth reading all the comments and rebuttals too; you’ve summed up a very complex set of circumstances and historical information much more concisely than the UK media is doing right now/ever. I can only assume that this is an inherent feature of politically aligned media outlets.
The only thing i would “gently” contest is your comment regarding the Green Party also focusing on the debt – albeit you’re clearly more versed in these things than I; this is lifted from the section “Alternatives to austerity”
We will be prepared to borrow on good terms to fund investment rather than making closing the deficit the main objective of our economic policy. The plans in this manifesto require borrowing of £338 billion (in real 2015 terms) over the Parliament as compared with the Coalition’s plan in the 2015 Budget to borrow £115 billion. If monetary policy demands quantitative easing, we will spend that money directly on green investment. However, the programme of public spending and taxation in this manifesto would show a surplus on the current account (that is, excluding investment) of 2.7% by the end of the Parliament.
Thanks for you insights, particularly as you’re not a native!
Enjoy Cambridge, it’s beautiful.
Thanks Carl, that’s a good point about the Greens–they are willing to borrow more than Labour.
Typical rubbish post from someone who thinks statistics hold the answer to everything.
If you lived here you’d understand what a bunch of morons the Labour Party are. Their idiotic changes brought about unsustainable immigration, with no infrastructure to support it, introduced political correctness that has made the average British person the worse off individual, and created multiple government departments and public sector positions to skew employment statistics and economic growth figures.
The best thing Gordon Brown did was leave office.
Oh don’t forget Labour led us into two wars that the public didn’t want to be involved in based on falsified and unsubstantiated evidence.
The blood of thousands are on Blair’s hands.
Oh but yes please vote for them….
I lived in the UK for three years (2010-2013) and will be returning in the fall. Labour is far from perfect. The problem is that the Tories are worse–the Tories also supported the wars and the Tories produce inferior economic outcomes.
Spending under Labour was not as high as is commonly believed:
http://www.tradingeconomics.com/charts/united-kingdom-government-spending-to-gdp.png?s=unitedkigovspetogdp&d1=19730101&d2=20071231
The private sector did much better under Labour than the public sector:
Research from the United States suggests that immigration contributes positively to economic growth and shrinks budget deficits:
the Tories supported the war on the basis of the information given to Parliament by the Labour administration – that information has now been found to be entirely discredited – this discredits much of what y ou have written
Would a Tory government have been any less likely to be misled by the intelligence (much of which was being fed to Britain by the Bush administration)? Even if Britain had refused to participate, would this have deterred the Bush administration? In both cases, I think the answer is clearly “no”. In any case, this post is mostly concerned with economic issues, so its contents are not in play when we discuss foreign policy.
You have misused the term “political correctness”, I believe. It actually means the practice of using language neutrally so that it does not demean those to whom it is addressed. For example, “service user” is more neutral than “mental patient”.
so does insisting all of your employees refer to Christmas as “Winterval” to “avid offending non-christian people” (even if it really upsets a lot of other people) fall under this reasonable definition? No? Didn’t think so. But at the height of the new-Labour insanity, this is what the British public were told the term “political correctness” meant. I suspect that that is what the poster was referring to, and it’s one of the few things I agree with him about.
Reblogged this on The Jobseeker's Guide to the Galaxy.
So the big question you ask is whether the coalition government’s policies, particularly continuing fiscal consolidation (“austerity”), contributed to the poor recovery. Or would things have been even worse without their interventions?
It is difficult to make a strong case either way because it is not clear what the counterfactual is. As for the recent slowdown, well that may be due to a mix of a dislocated financial sector, austerity-driven low demand and poor investment, rather than a failure of coalition policy. The UK’s recent stronger economic performance perfectly coincided with a recovery elsewhere in the world, including in the US which followed a path of stimulus, not austerity.
No party has put forth proposals that are a magic bullet for the UK’s long-term economic challenges. I will also point out that Labour have not been specific on whether they would increase investment (and therefore borrow more) or run a current surplus (and borrow less).
We know that there is a strong negative correlation between austerity and growth:
We also know that during the period in which the coalition made the deepest cuts, the UK fell behind other countries:
That looks pretty conclusive to me.
Or another explanation is that austerity enabled growth later on, dumbass.
Even when you include more recent data and expand the pool to the entire OECD, the relationship holds:
https://fortunedotcom.files.wordpress.com/2015/04/screenshot-2015-04-13-at-12-12-31-pm.png?w=650&h=586
Or just grew more slowly? What the graph’s clearly show is that the UK’s path quite closely resembles that of other countries, surely?
The UK’s path is considerably slower than we might expect, particularly given that the UK is not on the Euro and controls its own monetary policy. France often gets criticized for anachronistic economic policies, yet it has seen more growth since 2008 than Britain has. Germany’s recession was deeper, but it’s far ahead. Even the Netherlands was ahead of the UK until the UK slowed down austerity (and the Netherlands simultaneously enacted some austerity of its own).
For people to fully understand the UK political system, they need to go back to a time when the only party was the Conservative party and that they lorded over the UK population, basically enslaving and controlling them, eventually bringing in laws that by today’s standards would breach just about every human right going… and they have tried again and this was the first step, making it illegal to find shelter, the first winter, I stopped counting frozen bodies in the media and social media that got reported, yet did the tories do anything to assist with homelessness? No they removed all funding from charities that work with the homeless people, I know this because I work voluntary hours at a charity shop that helps fund hot meals for rough sleepers. I think that people have forgotten all the things that have happened because of tory austerity and welfare changes.
I totally agree that Camerons actions have had a detrimental effect on the economy of the UK at large and that not investing in projects, build and repair the transportation infrastructure creates jobs in many other industries that make products who buy materials off other companies, etc. The knock on effect of this is tax revenue and employment is lowered, people can spend, putting money in to the economy themselves. Its like starving a flame of oxygen, eventually the lights go out…
What is important to remember is that the Conservatives are like leopards and their spots, they don’t change. Take the current economic pressures we are suffering all stem from the 1930’s and don’t forget the tories bankrupted Britain in WWII and we accepted a loan from the US Government so the tories could continue the war and save their asses. When Labour took office, they found out just how bad the countries finances were and what the conditions of the loan were and basically freaked.
the boot got put in hard under Thatcher and it was thatchers government that hatched various plans to undermine the unions in an attempt to topple the Labour party whose main funding came from where??? Unions. So Thatcher attacked the unions and some of that was schemed up in 1977, before Thatcher took office and it is in a document recently leaked to the internet that the Conservatives are by all accounts attempting to eradicate because it shows that Camerons Austerity is really Thatchers Austerity…
If you know anything of politics and the Conservatives, you will see historically that they have systematically dismantled everything Labour built, they’re doing it now with the NHS and other public assets, nicking the silverware and getting away with it.
I will say that UKIP are sham, like a shell company, they are a tory front that is spouting all sorts of promises and its manifesto is made up of what is not so palatable with the public and IMHO its an attempt to make the tories look like a better option than other parties. Its bankrolled by defecting tory MP’s and tory sponsors, that much has been made public… So voting UKIP is not a tactical or block vote, it is a wasted vote.
The one main bug bearer for me is the level of apathy of the average UK citizen when it comes to voting. If a fraction, I think it was claimed that if just 3% of the 15 Million non-voters had turned out to vote, we could very well have been waking up to a Liberal or Labour government instead we got a coalition government who frankly I do not recognise as a legitimate government because they were not voted in.
So in a nutshell, Tories bad for country, New Labour, haven’t decided, much prefer old Labour, Liberals are a bunch of school fags, blow hards that roll easily, well we saw that with the coalition and Cleggs apology in video format… Greens need to rethink their strategy and loose the “Green peace” image, it does them no favours. UKIP is a real annoyance and people voting UKIP need to get educated.
We will have to see what happens on the 7th.
Nice post BTW.
Reblogged this on Jez Russell Production.
Great post! Very clearly argued.
Thank you for reading, glad you enjoyed it.
Reblogged this on South of the Clouds.
Thank you for taking the time to do your bit to encourage the UK electorate to challenge the ideas presented as fact by our current incumbents.
I can’t fail to note that the majority of attacks/complaints accusing your analysis as being haughty, opinionated, starting at the wrong points (etc.) are answered in full in as many posts as the reader needs to ensure they understand your point/perspective. I also can’t fail to note that very few of these people respond to your replies in any kind of intellectual jousting.
The people in this country that simply follow the news and believe whatever government is in charge (I can’t truly discern enough difference between my choices) or vote on a selfish notion of ‘more for me – I deserve it’ are very upsetting; they are often genuine examples of irony.
It’s good that a handful of these people are prepared to voice their perspective for debate, but indicative of their cause that they seldom back up their claims as you have done providing (at the very least) evidence for your thesis.
If anyone would like to argue against my own points, please don’t. I am a teacher and consequently don’t have time; my job takes many more hours than those berating the public sector often put into their own work. Also, unlike some MPs, I don’t have enough time to do a second job.
Well said Teacher.. I to am a fellow in your chosen ( and possibly Benjamin’s sometime in the future ) trade and I do appreciate the reasoned presentation of facts and explanation to defend the article. Luckily for me Teacher I have resigned from the profession so I do have some time to engage in INTELLECTUAL debate…
PS half term soon come TEACHER..almost there!
I appreciate that–this post has been more popular than others I have written, and it is putting my policy of responding to all critical comments to a bit of a test. I may have to revise it, if only to leave myself with room to do other things.
Great hypocrisy. On the one hand berating those who haven’t replied to a student blogger (probably due to work, or sleep) and then saying you are too busy to reply to any comment… Of course you are the only person working hard around here… And you talk about irony.
Yes it is a good article, and well written. Surprisingly enough though it is a little controversial therefore, is provoking responses. Stick with teaching PE, if Benjamin wanted defending he wouldn’t be blogging.
Thank you Ben K.
A misuse of the word hypocrisy; assumptions about my self importance; an offensive attempt at humour that merely points to your own prejudices; a false claim; some incorrectly punctuated sentences including a fragment; and a hyperbolic claim (an attempt at humour/sarcasm?) all for what?
My point was valid: in a blog where those arguing against the claims made by the author are responded to in full, I was merely pointing out that those seeking clarification, or detail, seldom provided evidence to support their argument or perspective; in essence I was praising the author for his passion and commitment – there was not a defence in there.
Despite your pointlessly rude tone, I shan’t sign off with thoughtless attempts to retort in kind.
xx
That was a very interesting read, Something I really didn’t realise. Thank you Benjamin Studebaker. I by no means am a Conservative voter, I have never voted for them, but putting the UK economy aside, on the other side of the coin is other UK laws that Labour made a mockery out of. I mean the legal and justice system. It basically fell apart and removed every mans human and constitutional rights. It was thanks to a Labour government that in the UK now we have a justice system that states “Guilty until proven innocent”
I can honestly say that the Conservatives have started fixing that one. Slowly, but they are. They have partially restored Statutory rights, legislation and given us back some common law. Labour were supposed to be for the working class, but my oh my… dare you fail to repay a loan because you were made redundant from work, their policy was to allow debt collectors to just walk in and take everything you owned. Even your wife…. Anyone on these forums that know UK law such as Statutory vs common law will understand what I mean. I’m sorry to have to say this but the UK Labour party under Tony Blair & Gordon Brown with the help of that absolute muppet Jack Straw was heading the UK on course to being a new communist state. Laugh if you will, but that is fact!
I’d have to see some citations on a few of these claims. They don’t sound credible to me. Unfortunately, I’m getting a lot of comments today, and I can’t go check these myself.
Well done for presenting a FACTUAL reasoned account of what has been happening in the UK. Like you have said.. most voters have short memories.. and I will add.. ( not Benjamin’s words but my own ) most people are ignorant of what is going on in their country ( in an economic/political sense.. in that they hear stuff on the tv.. are able to repeat it.. but do NOT understand ) . Also well played in defending your article against the naysayers and “sound bite repeaters” with FACTS and information. I do hope the British people make the right ( or lesser of two ….) decision on Thursday.. but I fear while a few have read your and many other publications explaining what REALLY happened…the majority will vote foolishly on Thursday repeating rubbish spewed by the Tories which is misleading and incorrect while trying to convince themselves they are doing the right thing.
Thank you for reading, I’m glad you enjoyed it. If it’s any consolation, this is by far the most popular post I’ve written.
Writing FACTS and REAL in capitals doesn’t add legitimacy to a debate, it just makes you look IGNORANT. Support him with empirical evidence and primary data, or by simply writing a genuine fact such as ‘interesting and provocative blog, keep it up’.
And you didn’t even to get to one of the best arguments against austerity – namely that it doesn’t reduce debt at all, it just shuffles it from the government, which can afford it, by printing money if necessary/desired (inflation is at zero after all), to the private sector, which cannot. It is simple accounting that the private deficit + the government deficit = the trade deficit. Given that we are running a trade deficit, cutting the government deficit means rising private debt and financial instability.
This fact has not gone unnoticed by economists, or even by the government appointed Office for Budget Responsibility. It even made it into the papers (http://www.theguardian.com/politics/2011/apr/02/family-debt-burden-government-figures), but then for some reason didn’t resurface into the political debate.
There are a lot of interesting arguments (albeit more abstract and less accessible) being made from the Modern Monetary Theory crowd that make the case that government debt never matters under any circumstances, but getting into that would have added substantial length to this post and made it much less sharable.
I don’t think that point is unique to MMT, hence the newspaper article, though the way I expressed it may have been….but yes, this essay is very well argued and a good length as it is.
You haven’t mentioned much about the approximately £200bn of Quantitative Easing that Cameron’s government have pumped into the banking system under the guise that it will be used to loan to businesses – as both an exercise in economic stimulus to business and an exercise in ‘trickle-down’ economics – even though there’s, apparently, little evidence of any increase in banking loan stimulus to business. With that in mind is this not just a way of artificially boosting the banking and financial sectors into growth? Especially considering about 75% of current economic growth is ‘service sector’, which includes banking and finance?
The property market growth has also risen significantly (although most of that growth is in the South East) due to both the deliberate under-supply of housing (particularly affordable housing) and the public subsidies for house-buyers. Is this (along with the trebling of tuition fees) simply a way to transfer Public Debt into private hands?
The Conservatives also consistently claim that debt is bad, and yet they appear to be presiding over a significant transfer of public debt into private hands at a time when Private debt is currently in excess of 400% of GDP. Is this not a form of ideological hypocrisy that serves only the banking and finance sectors that are driven by debt?
I’d really like to know what you think about these issues – apologies if you’ve already commented on these issues.
Definitely a fair line of questioning. It’s certainly true that tuition fees pass a social cost onto young people even though society is the primary beneficiary of a well-educated working population.
I understand why governments try QE–growth before the crisis was in many cases often driven by credit rather than by sustainable wage growth, and QE is meant to get banks lending. This is meant to allow businesses to see more consumption without having to pay out more in wages. In the long run it leads to instability and financial crisis. The US is the most severe case, where real wages have not risen substantively since the 1970s:
Governments need to realize that wages cannot indefinitely be replaced with credit.
It’s very clear that the Tories either do not understand how debt works or do not actually care about it. Their policies do not optimize debt reduction and are not in line with extant research.
Is the alternative to austerity not more borrowing? With such a huge debt already wouldn’t that be irresponsible?
Governments that control their own currencies have a variety of tools at their disposal to make borrowing affordable. For one, if they invest the money they borrow effectively, they can grow the economy faster than they increase the debt, shrinking the debt’s relative size. In more extreme cases, they can devalue the currency, rapidly shrinking the real inflation-adjusted value of the debt. The British government used these tools to tackle the immense debt burden left over from WWII, avoiding austerity for the most part:
Benjamin , we call the season after summer autumn – I fear your in depth analysis & awareness of the British economy may have fallen at the first hurdle. May I suggest you focus on the U.S. economy for the time being. Kind regards.
Surely my foreign expressions make me appear chic and fun? 😉
Typical yank imposing your views where no one wants them, you arrogant man, typing this crap up and basically telling everyone in the UK that you know better than them. Before you comment on The UK u should comment on the state of your your own country and gun manufacturers who buy your presidents. United States of America, joke you can’t even agree on the same laws in your country, from one state to the next they change.
I gather that there are many people in the UK who agree with me, given that this is the most popular post I have written and the overwhelming majority of its views are UK views. That said, I frequently write about US politics as well–I’ve even gone after my government about gun control, praising Britain for having superior gun laws:
https://benjaminstudebaker.com/2012/12/15/how-to-drastically-reduce-gun-violence/
Interesting article Ben thank you, I think your conclusion that austerity doesn’t work in relation to gasp growth is fair, it is essentially the way for the Tory party to drastically reduce the public sector, that’s how I would summarise the vast amount of information on this post!
Your assertion however that the IMF hasn’t praised the coalition austerity policy is simply false, one quick google search and the very first article that appears is: http://www.bbc.co.uk/news/business-32346214
The IMF quite clearly praising the austerity policy of the coalition government…
Gdp growth not gasp growth
Part of the trouble is that the IMF is very hesitant to appear to take a political stance. The piece you’ve linked me to specifically states that Lagarde played down differences between the coalition’s figures and the IMF’s own estimates (and links to this piece, which details that difference):
http://www.bbc.com/news/business-32327177
In the Guardian Lagarde mentioned that the coalition had begun to tailor the cuts more to the needs of the economy–given that Lagarde said this in 2015, after the slowdown, I think it’s fair to say that her comments are either a direct response to the slowdown or an indirect consequences of it:
http://www.theguardian.com/politics/2015/apr/17/imf-chief-praises-british-governments-handling-of-economy
The IMF has not retracted any of its published papers, so if I’m wrong, Lagarde’s comments are at odds with the IMF’s own research, which is possible–the IMF tries very hard to avoid directly criticizing the governments it depends on for financing.
Benjamin, an interesting read and a shit-load of comments. For a PhD student your spell/grammar check is not good but that’s by the by.
Prosperity, not Austerity, is the tool to rebuild an economy. The Cons and the Labs are co-conspirators in a 2-party illusion. Every step down this dark path has been with the purpose of supporting this illusory dichotomy, whilst at the same time selling off the public services that Britain was sooo proud of. The British people have been robbed by those they trusted to protect them. It is an outrage and we should be up in arms about it, as should the Americans.
#occupy
Doesn’t the IMF paper you quote say that austerity measures do not give instant debt relief and that it’s not one for one with cuts?But that paper is saying it still cuts debt, but this effect takes longer than might have been expected. This appears to be exactly what’s happened in the UK?
Regardless of it’s short term effect on the economic recovery, the longer term effects of austerity seem solid. Especially for a country with a large % debt. Incidentally, the comparison with the US maybe isn’t helpful, since there is a view that they are sitting on a deficit problem which is going to hit in the next couple of years (~2020).
Paul Krugman goes over that particular IMF paper in detail, explains it very well:
http://krugman.blogs.nytimes.com/2013/03/10/the-imf-on-the-austerity-trap/
[…] few days ago, I wrote a post called Britain: For the Love of God, Please Stop David Cameron. I didn’t expect much out of it, because my usual audience is predominately American, and […]
In my opinion, the provisions for welfare in Britain were and still are too generous, which encourage unemployed people with larger families to remain unemployed because they could not possibly hope to match their benefits payments in work. This situation is immoral and demoralising generally. Why should hard working people pay their taxes to keep their more fertile feckless neighbours? This part of Cameron’s policy was and remains popular with all working people in Britain. It may well mean that these people have less money to spend, which reduces the profits of the large supermarkets but from a point of view of morale, such a situation is unsustainable! You cannot “buy” growth by increasing your national debt. And if you think that the EU is doing so well, why is the value of the Euro catering because tiny Switzerland removed it’s protective exchange rate, favouring the Euro? Switz is also suffering, but they don’t want to support the “super-Mario Draghi” bail out of all the lame duck economies, including France, Portugal, Spain, Italy and don’t get me started on Greece, and they are right! You can only kick the can down the road that way, but eventually the debt has to be paid.
! Too generous, look at other countries that have unemployment and welfare systems.
Have you ever tried to survive off welfare when cost of living is rising above ther rate of inflation and your benefits are capped to a max of 1% per year increase??? I have to and because of Camerons Government TOOK MY EMPLOYMENT AWAY.
I had a job, it was a complete career change for me after my industrial accident, luckily for me the accident only left me partially disabled and my employer at the time, guess who it was… It was a conglomerate of businesses that involved warehousing, FLT work (me), one of the main players, ATOS, and KPMG.
Now if you looked at all those companies together, you wouldn’t figure that they all owned by ATOS and I didn’t find out until 10 years afte my accident when I was advised that I needed a copy of the page of the accident book where my accident was reported. The company had gone in to receivership, this is where KPMG comes in, they claim that the records for that particular store I worked in was damaged in a fire… yeah right, they didn’t want a compensation claim and face scrutiny for failing to comply with the HSE and RIDDOR.
All these companies involved are associated with the tory party and before anyone jumps in and points out that Labour started ATOS is deluding themselves because ATOS is a massive world wide player who supply all the governments computers that deliver health care, welfare, government needs and obviously themselves, they as a company started out processing banking transactions, branched out in to industries, manufacturing, transport, health care, just about anything you buy these days will have been touched in some way by ATOS.
Anyway, my employer refused to pay any sick pay, after putting in my 3rd doctors note and not getting a penny, well I got paid £30.12 for the month, they were demanding that I go to their health care professionals for an assessment, guess who… ATOS.
Now whilst I am able to and willing to work, my options are now so narrow that I take any chance I can get for any training that will help me find work, problem is that the tories have dismantled that part of the back to work programme.
Quote: “Why should hard working people pay their taxes to keep their more fertile feckless neighbours?”
What “Working People” of the UK need to get to grips with is this tory spin and myth that working people foot the welfare bill, frankly you are delusional and obviously more academically challenged than myself if you think that your income tax foots someone’s welfare payment, on the old directgov website it had it in plain English that anyone could comprehend and that was welfare payments come out of “your own Nic’s” and when they were considered exhausted, benefits are paid out of general taxation, nothing to do with taking money from you but by the taxation in the wider economy.
So Ms Suzy O’Shea, here is a personal challenge, you pay yourself £76 per week or however much it is now, if you have a partner then allow a couples allowance and try to pay bills, buy food and suchlike for say 6 months and come back here and say it was a luxury lifestyle. I am betting you won’t try it, it was proposed to the government to try themselves, how many did? One if memory serves me and that didn’t last long either and it wasn’t a tory MP.
Here is a thought, if Cameron was claiming welfare for his son [DLA], and that welfare is not means tested and cameron had a family fortune in excess of £30 million, his wife also a privileged background, doesn’t that make him and his wife hypocrites, it is irrelevant that he was allowed to, the question really is a matter of morality and not taking advantage of something that they as a family clearly didn’t need and were taking benefits away from someone who was in more need of DLA than the camerons were.
Sorry, Euro is cratering, it has been falling in value or has the pound gone up in value, which way do you want to swing it?
The real story IMHO as to why the UK has not joined the EU banking system, its because the financial sector would loose billions in the exchange, however, the Euro is closest it has ever been to a 1:1 exchange rate.
Still no EU membership other than the foot in the door scenario means that whilst we have rights and protections that the EU have as a safeguard to our lives, cameron wants HSE shut down, he want employment right abolished and access to health care, is now harder than ever. Whilst part of the EU, we have other protection that caps things like the working hours limitation, meaning that general emplyers can’t exploit staff like 12 hour shifts 7 days a week.etc, just read the UDHR, HSWA and HRA and then imagine if we had none of them… You would be going to work for a couple of pounds an hour because minimum wage would have been abolished, your life could be in constant danger becaus employers wouldn’t need to comply with any kind of safety or equimpent and we would return to the good old days of seeing workers crushed or arms ripped off because of no PPE or guards. Unemployment would be extremely high and crime, which goes in tandem with rising unemployment.
A whole plethora of safeguards that if removed would definitely see a modern version of the Victorian era, we are living in the beginning of that where people now need food banks, people are being made homeless, thats another thing, people “don’t” make themselves homeless, they are “made” homeless much like what happened to myself on several occasions and the main reason being that the DWP and welfare system ceased benefits, oddly enough I have never been made homeless under a Labour Britain, I just narrowly escaped eviction from my current flat because like the last time I was unemployed under Thatchers Britain, I spent nearly a year living in hostels and B&B’s being moved around, lost all my personal effects from landlords stealing and keeping my property because the local authority ceased housing benefits. So I have lived this life style choice as the tories spin it and I can tell you this much, it is not my choice, it is what I have to live with and anyone at any time can lose their job, suffer ill health, become disabled through injury or ill health. People need to open their eyes and look beyond their own bubbles that really need popping.
I get sick to death of myopic, blinkered and tunnel vision’d morons spouting that the tories are good for the UK, GO CHECK OUT HISTORY PLEASE… Tories are and never have had your or anyone’s needs or welfare in mind, only their own greed and what they do to the population to keep us subjugated.
If employment is so important to the tories, why did they close down Remploy and remove other systems to help that would get people back in to work? All he has done is increase unemployment, hidden the true figures and told people to go find work that does not exist… Back in 2011, the ONS published figures that showed that welfare claims were 3.95 Million and out of that 3.95 million on welfare, 2.25 million were in work and claiming housing benefits. Unemployment rises each year, its a fact and one that can’t be helped, you do have hundreds of thousands of school leavers, so why did the tories hide the true figures? Maybe because the austerity measures were killing any chance of employment because the word recession strikes fear in to people because their job could be in jeopardy and people stop spending and only buy the bare essentials. No economic growth stems from that, the markets stagnate and need stimulus and from who… The government, not the banks but the government. If they don’t invest in the UK then companies suffer, everyone suffers.
Ask yourself what has cameron really achieved, why try to save a pissy £500 million from the welfare budget when £16 BILLION went unclaimed from that budget, to anyone with a pen and piece of paper (as you don’t need a calculator) could work out that you just reduce the over all budget by £500 M without need for cuts.
Fact is it has been made clear that none of the austerity measures were needed, the truth is slowly but surely coming out and the tories are trying to hide what I consider as evidence of gross negligence and misconduct whilst in office as well as manslaughter of the 11,000 people that have died as a direct result of austerity when they had benefits removed, were made homeless or ruled fit for work by ATOS or CAPITA and BY THE ORDER OF… Iain Duncan Shite, sorry Smith, nope, Shite it is…
All he[cameron] had to do was “tend the garden” so to speak and let it grow instead we have a roller coaster ride at the expense of the UK tax payer and yes I an a tax payer, maybe not in your eyes seeing as I have to barely exist on welfare, I do pay tax and every time I buy something, use a service that needs to be paid for and even the benefits I get I pay tax on and of course I now pay 20% council tax out of a 1% capped benefit that only covers the food bill.
Perhaps Ms O’Shea a really long spell of unemployment might soften your views a bit, by your comments I am guessing that you are in employment and have been for a while, was your path school, college, university? Got a job in the time you were in education?
Well, unless you have survived on benefits, you really have no place passing comments about welfare, have you?