In Tampa, the Republican conference has heard a line of powerful speakers talk about government debt in compelling and urgent way. There’s a contingent of eight Tories out there, led by party chairman Sayeeda Warsi, but I doubt they’ll be taking many notes. The finely-honed attack lines that the Republicans are coming out are more use to Labour than to the Tories. Take the below, from Paul Ryan’s speech on Wednesday.
‘They’ve run out of ideas. Their moment came and went. They were elected in the middle of a crisis, as they constantly remind us, but they’re now making it worse. They have added £11,000 of debt for every man, woman and child in the country. Thousands have graduated from university, ready to use their gifts and get moving in life. Half of them can’t find the work they studied for, or any work at all. Without a change in leadership, why would the next five years be any different from the last five years?’
I changed a couple of numbers, but the rest is pure Ryan. The overall analysis is very powerful: they said they’d fix the economy, they have increased the debt, so why give them another term? They promised something they didn’t deliver. I look at all this in my Daily Telegraph column today.
Cameron is vulnerable to this because in 2015, after seven years of the Tories banging on about the deficit, Britain will still have the largest deficit in the Western world. And also they have been engaging in what I call a ‘word game’ by saying they will cut the deficit. Politics, as David Frum says, is not about what you say but what other people hear. And most Brits hear ‘cut the debt’. A dangerous gap has opened up between what the government is doing with debt, and what the public think is happening.
The coalition is increasing the national debt by about £600 billion, about the same as Labour proposed. In my column, I mention a YouGov poll commissioned by Policy Exchange around the time of last year’s budget which finds that just 16 per cent realize that debt is going up. The Centre for Policy Studies (on whose board I sit) released a report this week showing just 10 per cent realise what’s happening to the debt. They produced a short video on it all:-
And why might the public be so badly informed? The CPS study shows several examples of ministers mixing up the concepts of ‘deficit’ and ‘debt’. I do not believe this is a deliberate attempt to mislead, but strategy seems to be to leave the voters in a state of blissful confusion. I don’t see many ministers going out of their way to make the situation clear. The phrase ‘cutting quarter of the deficit already’ goes down well in focus groups, but what if they knew that the national debt has risen by a quarter?
The CPS poll suggested just under half of voters think that debt is falling, when it’s rising faster now than almost any point in our history. Yes, this is due to Gordon Brown’s diabolical legacy and if there is such confusion over debt then a certain part of the blame falls on the media. But when these voters twig that debt is rising more under 5 years of Cameron that under 13 years of Labour, they won’t be happy. Cameron ought to make it clear, and point out that he is not cutting fast, harsh and deep as Labour say. His cuts are moderate ones, less in four years than Denis Healey did in one, and the price he is paying for cutting at such a slow pace is a national debt rising faster than any European country. I’m not saying his strategy is wrong, just that he should be clearer about what he’s up to. That he should be worried that the people whose money he is spending don’t seem to understand what he’s up to.
Cameron is lucky that, at present, their only alternative is a Labour Party that would borrow even more.
UPDATE A friend emails the below graph, showing that current government spending (excluding debt) is rising again. So those cuts are not so harsh and deep after all. He says: “If UK had to pay market rates for funding rather than print they money total govt spending growth would be 2-3% higher.”
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