Have there been spending cuts in Europe?

Short answer: Yes.

Via Tyler Cowen and the National Review comes this chart (click for big):

What it purports to show is that talk of "savage austerity" is overblown, that in fact no country has cut spending by more than a few billion, and that compared to 2002 levels (why 2002 is unclear) every country is spending considerably more.

Veronique de Rugy, who made the chart, does make passing reference to its major flaw, saying:

If this data were adjusted for inflation (which I would prefer but the data isn’t available) it would possibly show a decrease and certainly a flatter line for all countries.

Presenting such a chart using non-adjusted numbers is borderline dishonest. Flatlining spending in the UK, for instance, is a 3.5 per cent cut in real terms if there is 3.5 per cent inflation.

Tyler Cowen argues that using nominal figures is legitimate since nominal figures are what matter in the short run. If we accept that – or if we accept the easier-to-swallow response that an honest chart would show austerity but not "savage" austerity, or "large" spending cuts – then the next place to turn is to the receipts of spending.

What we find is, as Cowen puts it, a large increase in "automatic stabilizers", a Keynesian term which basically means that more people are claiming things like jobseeker's allowance, tax credits, and housing benefit as incomes go down and unemployment goes up.

These various expenditures are lumped together in the category of "mandatory spending". They are all expenses which governments promise to spend as needed, rather than from a fixed budget. If the number of unemployed people goes up, the amount spend on unemployment benefit goes up, and vice versa. Since the number of unemployed people has indeed gone up, we would expect mandatory spending to increase – as it has done.

In order for nominal spending to stay flat, as it has done, this increase in mandatory spending has to be offset by a decrease in "discretionary" spending – buying things that we actually want. As of the 2010 spending review, the Government was predicting a 26 per cent cut in the departmental spending limits by 2015, from 27 per cent of GDP to 20 per cent.

That is where the "large spending cuts" lie. But Cowen argues that:

That is not how people phrase it, rather they are complaining rather vociferously about "spending cuts," many of which are either imaginary or extremely small.

Perhaps Cowen is merely objecting to political rhetoric, in which case he is correct that "savage cuts to the discretionary budget which are partially offset by a growing mandatory budget" is more accurate, although less compelling, than "savage cuts". But if he is arguing that it is wrong to even claim that cuts exist, then he is being blinded by the same argument that has taken in Dan Hannan and Toby Young. As Daniel Elton puts it:

It is in effect saying "Yes, we realise that your Sure Start Centre has had to shut down, but because there’s a whole bunch of people now in the dole, there are no cuts"

Snip, snip: Have there been spending cuts? Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty
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Ken Livingstone says publicly what many are saying privately: tomorrow belongs to John McDonnell

The Shadow Chancellor has emerged as a frontrunner should another Labour leadership election happen. 

“It would be John.” Ken Livingstone, one of Jeremy Corbyn’s most vocal allies in the media, has said publicly what many are saying privately: if something does happen to Corbyn, or should he choose to step down, place your bets on John McDonnell. Livingstone, speaking to Russia Today, said that if Corbyn were "pushed under a bus", John McDonnell, the shadow chancellor, would be the preferred candidate to replace him.

Even among the Labour leader’s allies, speculation is rife as to if the Islington North MP will lead the party into the 2020 election. Corbyn would be 71 in 2020 – the oldest candidate for Prime Minister since Clement Attlee lost the 1955 election aged 72.

While Corbyn is said to be enjoying the role at present, he still resents the intrusion of much of the press and dislikes many of the duties of the party leader. McDonnell, however, has impressed even some critics with his increasingly polished TV performances and has wowed a few sceptical donors. One big donor, who was thinking of pulling their money, confided that a one-on-one chat with the shadow chancellor had left them feeling much happier than a similar chat with Ed Miliband.

The issue of the succession is widely discussed on the left. For many, having waited decades to achieve a position of power, pinning their hopes on the health of one man would be unforgivably foolish. One historically-minded trade union official points out that Hugh Gaitskell, at 56, and John Smith, at 55, were 10 and 11 years younger than Corbyn when they died. In 1994, the right was ready and had two natural successors in the shape of Tony Blair and Gordon Brown in place. In 1963, the right was unprepared and lost the leadership to Harold Wilson, from the party's centre. "If something happens, or he just decides to call it a day, [we have to make sure] it will be '94 not '63," they observed.

While McDonnell is just two years younger than Corbyn, his closest ally in politics and a close personal friend, he is seen by some as considerably more vigorous. His increasingly frequent outings on television have seen him emerge as one of the most adept media performers from the Labour left, and he has won internal plaudits for his recent tussles with George Osborne over the tax bill.

The left’s hopes of securing a non-Corbyn candidate on the ballot have been boosted in recent weeks. The parliamentary Labour party’s successful attempt to boot Steve Rotheram off the party’s ruling NEC, while superficially a victory for the party’s Corbynsceptics, revealed that the numbers are still there for a candidate of the left to make the ballot. 30 MPs voted to keep Rotheram in place, with many MPs from the left of the party, including McDonnell, Corbyn, Diane Abbott and John Trickett, abstaining.

The ballot threshold has risen due to a little-noticed rule change, agreed over the summer, to give members of the European Parliament equal rights with members of the Westminster Parliament. However, Labour’s MEPs are more leftwing, on the whole, than the party in Westminster . In addition, party members vote on the order that Labour MEPs appear on the party list, increasing (or decreasing) their chances of being re-elected, making them more likely to be susceptible to an organised campaign to secure a place for a leftwinger on the ballot.

That makes it – in the views of many key players – incredibly likely that the necessary 51 nominations to secure a place on the ballot are well within reach for the left, particularly if by-election selections in Ogmore, where the sitting MP, is standing down to run for the Welsh Assembly, and Sheffield Brightside, where Harry Harpham has died, return candidates from the party’s left.

McDonnell’s rivals on the left of the party are believed to have fallen short for one reason or another. Clive Lewis, who many party activists believe could provide Corbynism without the historical baggage of the man himself, is unlikely to be able to secure the nominations necessary to make the ballot.

Any left candidate’s route to the ballot paper runs through the 2015 intake, who are on the whole more leftwing than their predecessors. But Lewis has alienated many of his potential allies, with his antics in the 2015 intake’s WhatsApp group a sore point for many. “He has brought too much politics into it,” complained one MP who is also on the left of the party. (The group is usually used for blowing off steam and arranging social events.)

Lisa Nandy, who is from the soft left rather than the left of the party, is widely believed to be in the running also, despite her ruling out any leadership ambitions in a recent interview with the New Statesman.However, she would represent a break from the Corbynite approach, albeit a more leftwing one than Dan Jarvis or Hilary Benn.

Local party chairs in no doubt that the shadow chancellor is profiling should another leadership election arise. One constituency chair noted to the New Statesman that: “you could tell who was going for it [last time], because they were desperate to speak [at events]”. Tom Watson, Caroline Flint, Chuka Umunna, Yvette Cooper, Andy Burnham and Liz Kendall all visited local parties across the country in preparation for their election bids in 2015.

Now, speaking to local party activists, four names are mentioned more than any other: Dan Jarvis, currently on the backbenches, but in whom the hopes – and the donations – of many who are disillusioned by the current leadership are invested, Gloria De Piero, who is touring the country as part of the party’s voter registration drive, her close ally Jon Ashworth, and John McDonnell.

Another close ally of Corbyn and McDonnell, who worked closely on the leadership election, is in no doubt that the shadow chancellor is gearing up for a run should the need arise.  “You remember when that nice Mr Watson went touring the country? Well, pay attention to John’s movements.”

As for his chances of success, McDonnell may well be even more popular among members than Corbyn himself. He is regularly at or near the top of LabourList's shadow cabinet rankings, and is frequently praised by members. Should he be able to secure the nominations to get on the ballot, an even bigger victory than that secured by Corbyn in September is not out of the question.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog. He usually writes about politics.