How Cameron disguised the true level of cuts

The Prime Minister attempted to hide extra cuts by the coalition in his speech on public service ref

In his speech on public-service reform yesterday, David Cameron attempted to assuage fears over the coalition's spending cuts. He said:

[When] we're done with these cuts, spending on public services will actually still be at the same level as it was in 2006. We will still be spending 41 per cent of our GDP on the public sector.

The Prime Minister's words were deceptive on two levels. First, he omitted to mention that this represents a reduction of more than 6 per cent of GDP (see table B2). Under Margaret Thatcher, spending fell by an equivalent amount (from 45.1 per cent of GDP to 39.2 per cent) but over 11 years, not five. Even then, the fall was largely due to economic growth, not spending cuts.

As I've pointed out before, during the Iron Lady's time in office, spending rose by 1.1 per cent a year on average - the reason why it was so absurd for Nick Clegg to vow that there would be no return to the "savage cuts" of the 1980s.

Cameron was also wrong to claim that spending will be 41 per cent of GDP "when we're done with these cuts". True, spending will be 41.8 per cent in 2013-2014 but, as the graph below shows, it will fall again to 40.4 per cent in 2014-2015 and to 39.3 per cent in 2015-2016. Thus, the Prime Minister hid additional spending reductions of nearly 2 per cent of GDP. After the coalition's programme of cuts is complete, spending will actually be at the same level as it was in 2004, not 2006.

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Another significant detail is that the government's spending cuts are permanent, not temporary. When asked by a Fire Brigade worker last summer if funding would be restored once the deficit has been addressed, Cameron replied:

The direct answer to your question, should we cut things now and go back later and try and restore them later, [is] I think we should be trying to avoid that approach.

The Prime Minister's insistence that we should try to "avoid that approach" reveals an ideological attachment to the small state and to low levels of spending. The result will be permanently shrunken public services. Cameron is free to argue for this position, but next time he should do so on the basis of fact, not myth.

UPDATE: I should have pointed out that spending under Thatcher reached a peak of 48.1 per cent in 1982-83 before falling to 38.9 per cent in 1988-89, a reduction of 9.2 per cent, larger than the 8.1 per cent reduction planned by the coalition. But my substantive point stands: Cameron is hiding the true extent of the cuts.

George Eaton is political editor of the New Statesman.

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Why isn't Labour putting forward Corbynite candidates?

Despite his successes as a candidate, the organisational victories have gone the way of Corbyn's opponents. 

The contest changes, but the result remains the same: Jeremy Corbyn’s preferred candidate defeated in a parliamentary selection. Afzhal Khan is Labour’s candidate in the Manchester Gorton by-election and the overwhelming favourite to be the seat’s next MP.

Although Khan, an MEP, was one of  the minority of Labour’s European MPs to dissent from a letter from the European parliamentary Labour party calling for Jeremy Corbyn to go in the summer of 2016, he backed Andy Burnham and Tom Watson in 2015, and it is widely believed, fairly or unfairly, that Khan had, as one local activist put it, “the brains to know which way the wind was blowing” rather than being a pukka Corbynite.

For the leader’s office, it was a double defeat;  their preferred candidate, Sam Wheeler, was kept off the longlist, when the party’s Corbynsceptics allied with the party’s BAME leadership to draw up an all ethnic minority shortlist, and Yasmine Dar, their back-up option, was narrowly defeated by Khan among members in Manchester Gorton.

But even when the leadership has got its preferred candidate to the contest, they have been defeated. That even happened in Copeland, where the shortlist was drawn up by Corbynites and designed to advantage Rachel Holliday, the leader’s office preferred candidate.

Why does the Labour left keep losing? Supporters combination of bad luck and bad decisions for the defeat.

In Oldham West, where Michael Meacher, a committed supporter of Jeremy Corbyn’s, was succeeded by Jim McMahon, who voted for Liz Kendall, McMahon was seen to be so far ahead that they had no credible chance of stopping him. Rosena Allin-Khan was a near-perfect candidate to hold the seat of Tooting: a doctor at the local hospital, the seat’s largest employer, with links to both the Polish and Pakistani communities that make up the seat’s biggest minority blocs.  Gillian Troughton, who won the Copeland selection, is a respected local councillor.

But the leadership has also made bad decisions, some claim.  The failure to get a candidate in Manchester Gorton was particularly egregious, as one trade unionist puts it: “We all knew that Gerald was not going to make it [until 2020], they had a local boy with good connections to the trade unions, that contest should have been theirs for the taking”. Instead, they lost control of the selection panel because Jeremy Corbyn missed an NEC meeting – the NEC is hung at present as the Corbynsceptics sacrificed their majority of one to retain the chair – and with it their best chance of taking the seat.

Others close to the leadership point out that for the first year of Corbyn’s leadership, the leader’s office was more preoccupied with the struggle for survival than it was with getting more of its people in. Decisions in by-elections were taken on the hop and often in a way that led to problems later down the line. It made sense to keep Mo Azam, from the party’s left, off the shortlist in Oldham West when Labour MPs were worried for their own seats and about the Ukip effect if Labour selected a minority candidate. But that enraged the party’s minority politicians and led directly to the all-ethnic-minority shortlist in Manchester Gorton.

They also point out that the party's councillor base, from where many candidates are drawn, is still largely Corbynsceptic, though they hope that this will change in the next round of local government selections. (Councillors must go through a reselection process at every election.)

But the biggest shift has very little to do with the Labour leadership. The big victories for the Labour left in internal battles under Ed Miliband were the result of Unite and the GMB working together. Now they are, for various reasons, at odds and the GMB has proven significantly better at working shortlists and campaigning for its members to become MPs.  That helps Corbynsceptics. “The reason why so many of the unions supported Jeremy the first time,” one senior Corbynite argues, “Is they wanted to move the Labour party a little bit to the left. They didn’t want a socialist transformation of the Labour party. And actually if you look at the people getting selected they are not Corbynites, but they are not Blairites either, and that’s what the unions wanted.”

Regardless of why, it means that, two years into Corbyn’s leadership, the Labour left finds itself smaller in parliament than it was at the beginning.  

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.