So the Senior Lecturer is to become a Conservative now, is he?

The message is very clear: the Conservatives have borrowed much more than Labour. This is clearly shown by looking at the proprtion of the national debt due to each party:

Given his insistence that only lots of borrowing can possibly grow an economy that’s the only logically consistent political view for him to hold then, isn’t it?

17 thoughts on “So the Senior Lecturer is to become a Conservative now, is he?”

  1. I’m sure a suitably dignified damascene conversion could occur in that lonely unimpressive end terrace in Ely if the prospect of Vermine were dangled

  2. The Conservatives are both borrowing more and making bigger cuts than Labour.

    So they can be criticised for both.

  3. Someone has asked whether he thinks the Conservatives didn’t spend enough. The question might disappear soon

  4. I love his analysis. Has he actually taken into consideration that the Conservatives tend to be in government much longer, and generally inherit an economy messed up by Labour? No, because he’s a simpleton.

  5. @Watchman: to be fair to him, the current crop of Tories have been absolutely useless at cutting spending, despite all theirs’ and Labour’s rhetoric. Let people attack them based on their inability to actually cut our debt and they may decide that swinging massively left to appeal to Labour voters was moronic and they need to shift all the way back to actual conservatism.

  6. Bloke in Costa Rica

    The Vicar of Bray upped sticks to Ely a long time ago. If you don’t like Murphy’s principles no problem; he has others. But he will never surrender his core attribute: being a fat sweaty malevolent purple bladder full of wind and piss.

  7. In two posts he has forecast the next of the 3000 crashes he has foreseen so far this year – Bitcoin this time, it must be six months since his last warning – and told the world that the Conservatives are not borrowing enough


    The Tories created two thirds of the UK’s national debt
    Posted on November 27 2017

    Philip Hammond said that the Conservatives were still clearing the mess that they inherited from Labour during the budget speech last week. That annoyed me. In 2016 I showed that the Tories have been the biggest borrowers since 1946. I thought it worth updating the data: it now covers the years 1946 to 2022. I do as a result include the latest budget borrowing forecasts until 2022, which is the expected time span of the current government. Since I know of no-one who doubts borrowing will continue until then I think this entirely fair. The data does now, therefore, cover 76 years. Labour was in office for 28 of these years and the Conservatives are expected to be for 48.

    My first task was very simple: I calculated the total net actual or expected borrowing in Labour and Conservative years. All figures are stated billions of pounds in all the tables that follow and are in original values i.e. in the prices of the periods when they actually occurred, unless otherwise stated:

    The message is very clear: the Conservatives have borrowed much more than Labour. This is clearly shown by looking at the proprtion of the national debt due to each party:

    To make sure this impression of Conservative excess is not distorted by the fact that they have been in office for more years I averaged the borrowing data by the number of years in office:

    The Conservatives borrowed more, not just absolutely (which is unsurprising as they had more years in office), but on average each year during this period.

    This though, is a bit unfair: the value of money changes over time. So I restated all borrowing in 2016 prices to eliminate the bias that inflation might give rise to. This resulted in the following table:

    The Conservatives still borrowed more in absolute terms by a considerable margin, still created more than two thirds of the national debt and still borrowed more per year, on average, even when inflation was taken out of account.

    I am though, of course, aware though that the Tories claim that they’ve only had to borrow in recent years because of the mess Labour made in 2008. To address this issue I then re-performed the calculations taking all the years after the Global Financial Crisis out of account, leaving just 62 year of data to consider. First I did this in original prices:

    So. it’s true that Labour borrowed more than the Conservatives before 2008, but that on average the difference is very small indeed: Labour borrowed just 12% more per year, on average.

    To check that this impression was fair I also restated the data in current prices:

    Now the situation has reversed: the Tories were, in fact, the biggest borrowers for each year in office, after all.

    Then I speculated that this switching of roles might be because Labour are good Keynesians: maybe they repaid national debt more often than the Conservatives. Or, to put it another way, they actually repaired the roof when the sun was shining as George Osborne would have had it. This is the data in terms of number of years:

    Labour do walk the talk: they repay national debt much more often in absolute and percentage terms than the Conservatives do. In fact, one in four Labour years saw debt repaid. That was true in less than one in ten Conservative years.

    But maybe the Conservatives repaid more. I checked that. This is the data in both original and 2016 prices:

    Labour not only repaid more often, it turns out it also repaid much more in total and on average during each year when repayment was made.

    So what do we learn? Two essential things, I suggest.

    First, Labour invariably, in real terms, borrows less than the Conservatives. The data shows that.

    And second, Labour has always repaid debt more often than the Conservatives, and has always repaid more debt, on average.

    Or, to put it another way, the Conservatives are the party of high UK borrowing and low debt repayment contrary to all popular belief.

    For those interested, this is the overall summary table: the pattern in the right hand column is really quite surprising. The evidence that the Tories are the UK’s big borrowers is very strong:

    Data sources

    The basic data on borrowing came from the House of Commons Library.

    GDP deflator data from 1955 came from the 2017 budget GDP deflators. Estimates post 2016 come from budget data. The data for the period prior to 1955 came from the Bank of England. Data was checked to the Treasury Pocket Data Book: as is usual there are minor differences, but too small to worry about. Budget data is from HM Treasury and the Office for Budget Responsibility.

    Governments in office for a year were determined in election years by the number of days each had in office: the party with the greater number being attributed the whole year.

    I have previously checked that lagging data by two years to allow for the influence of previous incumbents during the first two years in office does not alter the view given: it does not.

    The results here are slightly different to that reported two years ago in respect of earlier years. That is not because I got the data wrong then: the source data is subject to periodic checking and recalculation and this has happened in the last two years.





    31 Responses
    Rod oakley says:
    November 27 2017 at 7:00 am
    What have the conservatives done with all this borrowing as there is no evidence of the money being used for the country’s assets for the welfare of it people

    Richard Murphy says:
    November 27 2017 at 8:12 am
    That is not true: the money has been used to fund government

    Of course that has benefited people. You would not have an NHS and much ore without it

    There is not enough investment, but it has paid for public services

    Karen says:
    November 27 2017 at 8:51 am
    I understood his point to be that the Tories borrow more but give us, the public, less.

    Brian Cartor says:
    November 27 2017 at 10:25 am
    I sense behind Rod Oakey’s comment lies a factor that many feel is notable which is that Tory higher borrowing does not keep public assets public nor services adequately provided for. Tory borrowing does not provide on a £ for £ basis because of a non-Courageous contrivance of circulating the public spend (and therefore the public borrowing) into the hands of the wealthy. Decades – and especially the blatancy of the current decade – of Tory borrowing highlight that the Tories first and foremost use the borrowing-economy as a wealth-upwards distributor with its real purpose being a mixture of pesky nuisance because they have to do a bit of proper governing, and handy convenience because it provides a vehicle to rig their sysyem.

    Couple this with post-2010 Labour themselves not able – and it seemed not willing – to articulate their handling of the economy. In my view, this is an overlooked absolute weirdness that needs scrutiny. I won’t open that can of worms further here other than saying its massively connected and to create a new economic narrative with rely understood and accepted it needs to be included.

    Because at the core of the problem of wasteful borrowing/underfunding and economic illiteracy is the existence o neoliberalism in two (well three) parties. And why even now TV and radio economic analysis is illiterate often with an open-mouthed stubbornness to accept the most obvious proof that old-style economic understanding is debunked.

    The neoliberal ideology is at last under threat. But it is the fact that it has roots buried deep across spectrums and systems which continues to be nuisance. Across parties It in essence an Anti-Keynsian Pact.

    The analysis from Richard here excellently explains a narrative that is being built to achieve change. I am sure for many of us it will be referred to time and time again as a ready reckoner.

    Pilgrim Slight Return says:
    November 27 2017 at 8:12 am
    I have read about the Tory propensity for creating debt and leaving it unpaid for the next Labour Government elsewhere from a number of sources. And I say this in support of your post.

    The Tory reputation for being good managers of the economy is a joke. But it survives because spending debt makes people and society feel wealthier. But as we know, there is always a day of reckoning and it is all ‘funny money’.

    Mr Shigemitsu says:
    November 27 2017 at 9:42 am
    No, PSR, there is no “day of reckoning”.
    This is a neo-liberal trope, intended to scare the children.
    Given that the “National Debt” is no more than the accumulated savings of the non-government sector – and yields, as such, simply benefits for the wealthy – it’s no surprise that Tories have increased it, as they and their interests will be the largest holders of Gilts.
    So, there is no likelihood ever of a day of reckoning – why would Gilt holders seek less debt, i.e. less opportunity for risk-free savings?
    The whole gov borrowing thing will trundle along, hopefully ad infinitum…
    If anything, the deficit and debt aren’t high enough, especially right now when higher spending is essential, but being denied.

    Mr Shigemitsu says:
    November 27 2017 at 9:48 am
    I fear, PSR, that you are perhaps conflating government and private debt in your comment.
    If your last para concerns private sector debt as opposed to public debt, then I agree.

    Pilgrim Slight Return says:
    November 27 2017 at 1:31 pm
    Mr S

    I suppose I meant all debt – and the artificially manufactured and opportunistic orthodoxy that currently dominates it. The ‘day of reckoning’ is austerity – where the government pretends it does not have the money for public services because it has bailed out the rich again.

    The day of reckoning in private sector debt is when the debts dominate real income and suppresses spending in the wider economy or just when the credit bubble pops for some reason (usually some form of ‘irrational exuberance’ or fraud).

    Correct me if I am wrong but is this not a mixture of what we just lived through in 2008?

    Andy Crow says:
    November 27 2017 at 8:13 am
    Ah! But the difference is who benefits from Tory spending.

    Tories always make sure that the money goes to the people who ‘Know the value of it’.

    Heaven forfend they let the poor get their hands on any of it.

    Pauline Amos says:
    November 27 2017 at 9:26 am
    The Conservative government practice the art of illusion through the medium of main stream media. The electorate who keep voting them back in, seem captivated by the show.
    Your conclusion from this analysis needs to be shared!

    Mr Shigemitsu says:
    November 27 2017 at 10:16 am
    It’s hardly a surprise: higher taxes and spending under Labour will always result in a lower deficit, as transactions increase in size and frequency, people feel they can spend freely as opposed to needing to save, and more money is returned to the Exchequer as a result.

    The fact that Tories reduce taxes and spending, and encourage offshore saving, thereby increasing the deficit, wouldn’t even matter so much if they didn’t also pretend to care about how terrible the increases in the national debt and deficits were, and use inappropriate household narratives as a disingenuous and hugely damaging excuse to reduce essential spending.

    (Whilst at the same time owning the private sector savings that benefit from the yields and NS&I bonds!)

    Which goes to show its also about hurting the poor, not just about squirrelling away money.

    As Gore Vidal said, “It’s not enough to succeed; others must fail”.

    This describes Tories, to a “T”.

    Richard Murphy says:
    November 27 2017 at 11:00 am

    Joe Starbuck says:
    November 27 2017 at 10:35 am
    Just to make this clear in my head because it worrying when you listen to the news and there seems to be absolutely no understanding of this. But there is very little reason why the Government needs to run a surplus and that the national debt will never be ‘repaid’ and all we can really do is just reduce the national debt as % of GDP. So the sign of a good government is one which which grows the economy without growing the debt as fast, but every government essentially borrows. I just find it a little scary when you watch the likes of Andrew Marr press Labour MPs with ‘when will you get rid of the deficit?’ because the reality of it is, we don’t need to until we have a growing economy and even then we might not get rid of it entirely.

    Richard Murphy says:
    November 27 2017 at 11:05 am
    You are right: not only do we not need to get rid of either the deficit or debt (they are not the same) but doing so would be deeply economically harmful a) because the debt is needed for pensions and bank funding and b) the deficit is essential economic stimulus right now when the private sector is doing nothing of substance

    Debbie says:
    November 27 2017 at 11:30 am
    I find the information very interesting, although not at all surprising tbh, but would have liked to have seen more emphasis on the fact that as the sole issuer of a fiat currency there is no “debt” involved for Government (nor can it go bankrupt and nor does it tax to fund spending) and that it is not the size of the debt that matters so much as how it is spent and the value to the economy.

    It’s pretty damned clear that tax breaks for the ultra-rich and corporations has done pretty much nothing to spur any real business investment in the UK, and that the neoliberal insistence on flogging every last bit of our public resources has not proved either efficient, or cost effective!

    It would be nice to see similar analysis of the standards of living in each of those periods of time as well, or the improvements in those – although that is often much more difficult to quantify.

    Richard Murphy says:
    November 27 2017 at 11:32 am
    I do my best on those other issues as well

    One blog post can’t do everything

    Graeme says:
    November 27 2017 at 1:18 pm
    Apologies for being as dense as usual, Richard, but are you saying that the Conservatives have spent too much and that this spending has not been productive?

    Richard Murphy says:
    November 27 2017 at 1:38 pm
    I am saying that they have borrowed more than Labour

    And they claim the reverse

    That’s it

    Neil says:
    November 27 2017 at 1:32 pm
    Hi Richard,

    Many thanks for this – very clear. I have shared on Facebook and await the expressions of dis-belief/outright denial.

    One thing that I have frequently heard in response to this argument is the idea that Labour hand over deficits to conservative governments whereas Labour inherit better finances from conservative administrations. From your memory do you believe there is any merit in this argument?

    If not, I could stop being lazy and look into it


    Richard Murphy says:
    November 27 2017 at 1:39 pm
    As I noted I checked this out and lagging the data by two years to allow for this made no difference at all to the conclusions

    Neil says:
    November 27 2017 at 1:56 pm
    Apologies Richard – in my haste I overlooked that in the notes at the end.

    Anth says:
    November 27 2017 at 1:52 pm
    Slightly confused. You consistently say the deficit is irrelevant and the government should borrow more to stimulate the economy etc. You prove the tories borrow more than labour so are you actually saying we should vote Tory rather than labour if you look solely at this point?

    Richard Murphy says:
    November 27 2017 at 2:16 pm
    Not at all: I showed Labour borrowed more pre crisis than the Tories but also repaid more

    They repaid more because the stimulated more

    Tories run desultory economies that can’t repay

    But I’d argue now that Labour is not planning to borrow enough and Tory plans are utterly destructuve

  8. I though that Labour borrowing was good because it led to more tax, thus making it unproductive or, if you live in Ely, much more productive

  9. Thanks to Diogenes for giving those of us too timid to venture into such dark areas a taste of what goes on over at TR – a heady mixture of the turgid and the manic. How does anyone actually read such stuff?

  10. Only one of the posts seems to even grasp the possibility that the £150bn deficit set up by Brown might just have something to do with the ‘debt’.

    None of them appear to have noticed that Labour wanted to spend more *every single time*.

  11. “So the Senior Lecturer is to become a Conservative now, is he?” – i was just hoping that he becomes less of a cunt

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