It started with a letter.
On 28 November 2020 24 economists wrote to the BBC about a metaphor used for the UK economy. In a discussion of borrowing forecasts, Laura Kuenssberg, the BBC’s political editor at the time, had said: “This is the credit card, the national mortgage, everything absolutely maxed out.” While the letter writers acknowledged that Kuenssberg and fellow BBC journalists had also mentioned other views of the economy, they feared “household budget” analogies greatly influenced “the public’s understanding of economics, even though they do not represent economic reality”.
Sources tell me this letter led the BBC to look into how its journalists report on the economy, and in the week beginning 28 February 2022 the BBC board commissioned a review of its coverage of taxation and public spending.
For eight months evidence has been gathered by the review’s chairmen, Andrew Dilnot, the former director of the Institute for Fiscal Studies, and Michael Blastland, a former BBC journalist (the two created Radio 4’s numbers programme More or Less in 2001). The review, which had originally been due to report in the summer, will publish its recommendations within the next two months, according to a source close to the process. When asked to confirm, a BBC spokesperson said it would come out “later this year”.
Sources involved suggest it may recommend more clarity on guests’ political leanings (for example describing the neutral-sounding Institute of Economic Affairs, which was behind Liz Truss’s radical free-market ideas, as a “right-wing libertarian think tank”). Other evidence relates to the balance of economic commentary, for example a more careful use of City economists who naturally have a business-first view of the economy. Concerns have also been raised about treating economic stories as “politics-first”, when economic correspondents may be better-placed to report them.
Language, too, is under discussion. “The specific point about the ‘credit card’ analogy has been taken on board at the BBC,” revealed the first source, “but there are still issues about the use of language. The ‘household budget’ metaphor doesn’t work, and ‘tax burden’ is a loaded term.” Nevertheless, there is a widespread understanding among critics that there is no snappy metaphor for borrowing to invest, for example.
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I understand the review is examining coverage of the “most recent events”, for example Kwasi Kwarteng’s mini-Budget in September, as well as past Budgets and fiscal decisions. (The original period of scrutiny was mooted to be “between September 2021, the UK spending review, and March 2022, the UK budget”.)
As the Liz Truss government’s costly borrowing was roundly condemned – replaced now by a new regime hinting at spending cuts – sources say the review is more important than ever. Left-wing economists fear a return to the default thinking of the austerity era: that debt is wrong in any circumstance, and a hole in the public finances must be filled using spending cuts.
A number of recent reports in the mainstream media have suggested that Rishi Sunak must inevitably cut to make up an estimated £40bn of debt. “How will Sunak balance the books?” asked the Times on 26 October. The acceptance of “tough decisions” falling on public services and people’s wallets is everywhere. It’s much rarer to find alternative viewpoints, like that of the Financial Times’s Martin Sandbu that the UK could go without cuts by bringing the tax share up to the average for the countries of the Organisation for Economic Co-operation and Development.
“I thought the media had come a long way in recognising austerity as a political choice and not an economic necessity,” tweeted Carys Roberts, executive director of the Institute for Public Policy Research, a centre-left think tank behind some of the Labour Party’s policies. “But it’s been extraordinary to see the speed at which the public conversation (with honourable exceptions) has pivoted to spending cuts as difficult but unavoidable.”
In reality the government is trying to follow its fiscal rule of having debt falling as a percentage of GDP by 2025 (although this may be extended in the upcoming Autumn statement). Fiscal rules are a political choice, and often broken. Yet space for this detail is rarely found in quick, newsy broadcasts.
Among some economists there was a perception that the 2008 financial crash led to the BBC and other outlets giving a disproportionate platform to the idea that cuts were necessary for economic recovery. “Despite their limited record of success during recessions, austerity policies dominated discussion of possible solutions to the rise in the deficit,” Dr Mike Berry, of Cardiff University’s journalism school, found in 2016.
In his 2019 book, The Media, the Public and the Great Financial Crisis, Berry writes that his analysis of the main UK newspapers from January-August 2009 concluded that “by far the most referenced solution was to cut public spending or raise regressive forms of taxation” in response to the deficit. “Across almost all newspapers – whether left or right – the view that austerity was inevitable was dominant.” Although the BBC was more accurate, he still found “the great majority of news text concerned with solutions [to the deficit] was devoted to arguments discussing cuts to public spending and/or regressive tax increases”.
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Keynesian economists, who argue that spending rather than cutting is better in a recession, were concerned at the time about the “household budget” metaphor for the UK economy – that Britain had to live “within its means”, or would “run out of money”. Simon Wren-Lewis, the Oxford economist, called this perspective “mediamacro” and argued it won the Conservatives the 2015 election.
Andy Verity, the BBC’s economics correspondent, has been a high-profile voice in the media busting these myths. He has explained that the need for savings as outlined by the Institute for Fiscal Studies (IFS, a think tank that analyses public finances) is based on the “assumption that the Chancellor must meet his fiscal goals”. He has also written that it is “profoundly wrong and misleading” to compare government borrowing to household debt.
Reflecting these perspectives in more BBC coverage is key, say some figures contributing to the review. One BBC Breakfast presenter had suggested in 2021 that the public would have to “pay it [pandemic spending] all back”, for example.
Treating the IFS as an “oracle” on public finances “skews the way the BBC reports on economic issues”, said Robert Palmer, executive director of the left-leaning think tank Tax Justice UK, one of the economic organisations that is in conversations with the BBC. (A BBC spokesperson says “the review has spoken to a wide range of external as well as internal stakeholders”.)
Nick Robinson, the Today programme presenter and former political editor, referred to the IFS’s director, Paul Johnson, as “the God of the balance sheet” in October. He said the IFS’s verdict on fiscal decisions is “seen as the word of God”. Robert Peston, ITV’s political editor and the former BBC economics editor, made a similar point to the Guardian in 2016: “It is quite extraordinary in a way that it [the IFS] is regarded as the ultimate authority. Basically, when the IFS has pronounced, there’s no other argument. It is the word of God.”
Neither journalist appeared to be expressing a personal endorsement, but they did sum up the IFS’s “default” role. Berry’s research has shown that in a 2009 sample of BBC News at Ten bulletins the IFS was the most-cited non-party political source.
“The BBC has huge agenda-setting and framing power in our political system, so it’s important that it gets this right,” said Palmer. “Paul Johnson is obviously a very smart person, but the IFS comes from a particular ideological perspective that is contested. Grossly simplified, it’s: balanced budgets are almost the most important thing that the government needs to do or think about.”
The IFS rejects this characterisation. “We certainly don’t think that balanced budgets are the most important issue in economics,” Johnson said. “Indeed we are on the record as being very critical of the idea that you need to balance the budget overall – something George Osborne legislated for and which we said at the time was inappropriate.
“It is not an ‘ideological perspective’ to say that you can’t always have debt rising as a fraction of national income. We have been at the forefront of those who have pointed out the scale and consequences of spending cuts for both incomes and public services, as well as the importance of policies focused on growth.”
BBC journalists have long had internal briefings from the IFS before Budgets. Nowadays they also receive one from the more left-wing New Economics Foundation. When asked who else holds budget briefings, a BBC spokesperson said “it’s standard practice for BBC journalists to hear from a range of outside bodies regarding financial statements”.
As Britain awaits the autumn statement by Jeremy Hunt, the Chancellor, which he says will include decisions of “eye-watering difficulty”, the response of the media and political class may shape public opinion over the next decade – as it did the last.
“Some lessons die hard,” said Alfie Stirling, chief economist of the New Economics Foundation, which is also participating in the BBC’s review. “Fast-forward more than a decade, and the UK is perilously close to relearning precisely the wrong lessons from recent economic chaos. The lesson is not that governments get punished for borrowing too much to support the economy, rather they get punished for borrowing that fails to support the economy.
“Learning the right lessons now will affect people’s lives for generations to come, and the role of the media will be decisive.”
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