Labour lies National politics

Labour will spend the next five years lying about investment spending

We are going to hear again and again over the next few years a bunch of Labour stories about cuts to capital spending that are quite simply lies. Everytime you hear about how a school or a hospital isn’t going to be built because of Tory cuts be aware that this is a bare-faced lie.

In the December 2009 Pre-Budget Report Labour chancellor Alistair Darling announced a halving of net public sector investment. Here he was talking about real investment (capital spending) not the usual Gordon Brown nonsense about wasteful revenue spending being “investment”. Don’t expect Ealing council leader Julian Bell to know what I am talking about.

In a government spending crisis capital spending programmes are always an easy target. You can make a big impression on the finances without visiting immediate pain on electors. In order to salvage some financial credibility Darling savaged the capital programme in the dying days of the Labour government. He failed though to identify which programmes would be trimmed by how much.

If you go to table B13 on page 189 of the December 2009 Pre-Budget Report you can see how public sector net investment was due to be halved by Darling, see below (click to enlarge). Look at the net investment line which goes from £50 billion in 2009/10 to £22 billion in 2013/14.

Darling’s cuts were so shocking that in his own budget speech in June 2010 the Tory chancellor George Osborne said:

We have faced many tough choices about the areas in which we should make additional savings, but I have decided that capital spending should not be one of them. There will be no further reductions in capital spending totals in this Budget.

Go to Table C13, page 102 of the June Conservative budget and you will see that the capital programme outlined there is almost identical to Darling’s, see below (click to enlarge).

Over the next few years we will also have Labour folk memories of the Thatcher regime revisited. Like much Labour mythology they are nonsense too. Go and look at Treasury figures for public sector gross investment as a percentage of GDP that are hidden away in the back of the budget documents.

– Related article: Claims for Mis Sale of a Pension Product.

You will see that whilst the Tories probably cut investment too much in the late nineties (a trajectory maintained by Labour for four years after they came into power) they consistently invested much more than Labour under the mendacious Gordon Brown ever did. Of course Brown always confused current spending with capital spending. But the facts are that in eighteen Tory years average public sector gross investment was 4.3% of GDP. Under the first twelve years of Labour it was 2.7% of GDP.

Ealing and Northfield Labour lies

Local Labour runnning with the investment lie

This afternoon the apparently accident prone Political Assistant to the Labour Group, Andrew Jones, sent out a Labour group press release to all councillors and a number of senior council officers in error. It railed about the Conservative opposition calling in the latest stage of the schools’ building programme. Along with quotes from Labour MPs Sharma and Pound the story essentially accuses the Tories of endangering the programme. This is tosh.

The episode does show just how slow-moving the Labour group are. The Overview and Scrutiny meeting they refer to happened last week on 4th November. The press release is dated 8th November but only got circulated at close of business today, the 9th, some three working days later. In the loop this is not. This demonstrates just how cumbersome the Labour decision making process is.

In the press release Cllr Bell said:

The Labour administration has been fighting since May to secure investment in our schools and it has been akin to getting blood from a stone. The borough desperately needs investment to secure enough school places for our growing population. The government’s cuts have made this incredibly difficult, as the programme they have left us with is nowhere near big enough to deliver the places we need.

Sharma said:

We were made to suffer years of neglect the last time the Conservatives were in government and this time we were almost made to suffer just so the Conservatives could say something for a press release.

Pound said:

It is galling that the local Conservatives are imperilling this project after Conservative Secretary of State has taken almost all of our money for new schools. The Conservatives have done enough damage to our local schools in the few months that they have been in government …

Sorry boys, but these are Darling’s cuts.

Ealing and Northfield Labour lies

Bell boobs again

This week you will have received your November edition of Around Ealing. This is paid for by our council taxes and is prepared by council officers so it is required to be factual and non-political but it has strayed this month.

In Cllr Bell leader’s column he says:

For some time we have been planning to reduce our annual spending by £53 million (equivalent of 25%) by April 2014.

This is nonsense. Last year the council spent £1,031 million on the revenue side and £151 million on the capital side. Its £53 million savings target is only 4.5% of that. £53 million is 25% of the council’s government grant not the council’s total spending or budget. The council raises significant sums from council tax and fee and charges so its government grant is an important source of funds but only one.

For another comparison last year the council spent £346 million on wages and related staff costs. The £53 million savings target is only 15% of that.

Cllr Bell is trashing his own already poor reputation for understanding financial issues.

You might expect Cllr Bell to spout nonsense when he writes opinion pieces for the local papers but the council officers are required by law to keep him in check when he writes in Around Ealing. This time they have failed.

Ealing and Northfield Labour lies

The political ground war

It is three and a half years until the next local election. Believe me you are going to get very bored of the political debate in that time. What it will come down to is Labour trying to blame cuts in Ealing on the Tories and the Tories trying to blame any local impacts on the decisions of the local administration and Gordon Brown’s debt legacy.

Today the local paper has decided that it will put all thoughts of objectivity to one side and do a two page special report complete with “The cuts: where the axe if falling” logo. The Gazette squarely tells one side of the story quoting Labour council leader Julian Bell, Ealing TUC rep Eve Turner and an unnamed officer of Ealing NUT. There is no attempt to put this in the context of a deficit of £3 billion a week or £5,000 per taxpayer per year. The paper doesn’t mention the NHS – because it has been protected. It fail to explain that this protection of a core service everyone relies on has to be paid for by cuts elsewhere.

Bell is so keen to get his retaliation in first he is not above exaggerating his case. Apparently:

He painted a gloomy picture of having to choose ‘the lesser of evils’ from limited options once about a third of his budget is wiped out.

It seems journalist Michael Russell either has no knowledge of the council’s finances or is happy to nod through nonsense. The cut to the council’s grant is going to be 26%. That is one quarter of the grant not one third of the budget. Council income includes council tax, fees and charges for services ranging from parking through to planning and social care and income from other grants, Section 106, etc. For instance, the changes to parking charges proposed by the council are the equivalent of a 1.9% rise in council tax on their own. Last year the council spent £1,031 million on the revenue side and £151 million on the capital side. Its £53 million savings target is only 4.5% of that. Seen in the round this cut is not quite so harrowing. Bell undermines what little credibility he has by exaggerating as he does.

One theme you will see recurring again and again is the Labour council cutting back frontline services whilst protecting its own managers and workers and their conditions. Their strategy will be “protect our own”. They won’t ever say it. They probably aren’t even consciously aware of it. It is in their DNA. They can’t help themselves. The Conservative instinct is “residents first”. Where Labour is happy to externalise the pain the Tories would protect you from it. We just did for four years, that is our track record.