“Their sums do not add up”, “There’s a black hole”, “They’re opportunists”. This orchestrated clamouring by New Labour has been used whenever political opponents steal a march on them, that is show some sign of defeating the complete destruction that New Labour has planned for them. Of course New Labour do not have to produce their own costings or the figures on which they base the accusations. Any smear will do.
The latest protest, over the financing of proposed reductions in house purchase tax and inheritance tax, is just the latest in a long line.
Of course, all forecasts made by chancellors and their advisers come with a health warning, and the same is true of shadow chancellors. As Chancellor, Gordon Brown was reasonably accurate in forecasting growth, although his successor has had to revise the forecasts for the present and next years somewhat drastically at the half-way point. As Chancellor, however, Gordon Brown was notoriously over-optimistic on borrowing – the Treasury has over the past few years has had to borrow increasing amounts of money to balance the budget. Mr. Darling has had to double the expected deficit for the present financial year from £4bn to £8bn. The deficit for August was the worst ever recorded for that month, - somehow the Government forgot to mention this. The end result is that there is an accumulated deficit over the past few years of well in excess of £40bn, and our Government has the largest pro-rata budget debt in Europe! Other countries have been reducing their deficits, but ours is increasing. In fact Prudence has so far left the scene that we did the unthinkable, - we actually increased our deficit in favourable economic conditions, and now, if the expected turbulence (short hand for down-turn) comes……..
Two things have to be said about the “risk” they claim George Osborne is taking.
Firstly that no-one knows how many non-doms there are , but if you take the pessimistic guess New Labour uses, rather than the pessimistic/conservative reduction on published figures used by George Osborne, the Tory promise would have a shortfall of about £2.5bn.
Nobody knows whether there will be this shortfall and the forecast wipe-out of all public services New Labour would have us believe. (A senior figure in the Treasury has advised that Mr. Darling’s figure should be treated with “a great deal of caution”.)
Secondly, to put this in perspective, the black hole in the Government’s own deficit has doubled since the Budget earlier this year, and by almost double the black hole Osborne is accused of. In addition, the Tory “deficit” represents about half of one percent of total Government expenditure. Bearing in mind that New Labour’s own estimate, by Sir Peter Gershon, of what could be saved by the elimination of waste would be about £21bn, and that the 2007 Budget contained £59bn for “other”, unspecified expenditure, while £2.5bn is a large sum it is small in relation to the vast amount that the Government actually spends.
The claim that “sums do not add up” is a smear that cannot be substantiated, but New Labour hopes that if it is repeated often enough it may succeed. The Shadow Treasury Team know that the smear is likely to greet any proposal they make which damages New Labour and cannot be answered by appealing to accepted figures, and they have surely tested every figure they have relied on as best they can?
STM
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The Daily Mail on 7th August 2006 reported that in nine years the Labour Government had spent £70bn on outside consultants (including hundreds of millions to consultants on how to improve procurement and supply of military equipment - largely a waste, on the basis of what has happened since!)
As it has its own in-house experts, why have they spent such sums?
We can all offer reasons, but these figures make George Osborne's "deficit" seem more like peanuts.
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