REVEALED & EVIDENCED: The Four Big Lies that caused needless distress to 20.3m British citizens

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CHANCELLOR OSBOLLOCKS: THE DEFINITIVE DECONSTRUCTION

In a preface to Wednesday’s Budget, The Slog cuts through the rhetoric of cuts, and puts Osbornomics to the sword 

Between August 2010 and the start of 2014, George Osborne claimed to have effected some £83bn in ‘cuts’ to various Government expenditures. He told Radio 4’s Today programme at that time:

“When you see people on the telly who say that welfare can’t be cut anymore – or, even worse, promising they will reverse the changes we’ve already made and increase housing benefit – ask yourself this: what public services would they would cut instead? What taxes they would put up in their place? Or would they borrow and spend more, and risk our country’s economic stability again?”

Underlying these specious ‘choice’ options are three untrue assertions by the Chancellor:

  1. That the only alternative to spending cuts is tax increases
  2. That the Government is not borrowing money any more
  3. That the country’s economic stability depends on spending cuts

We’ll get to the wherefores in a few paragraphs – along with the forthcoming Fourth Lie – but before we even start to deconstruct the serial mendacity of George Osbollocks, let’s look more closely at the real sums involved.

Soon after the Chancellor’s £83bn claim, the ‘net’ result of those cuts turned out to have been less than half of that claimed. At the start of 2015 (just one year later) the right wing Institute for Fiscal Studies (IFS) said the running total then was £35bn.

Camerlot loves to blur and complicate these figures, but it’s not hard to put them into sharp perspective. First, £83bn is ALL government spending cuts. Second, the euphemistically termed ‘net’ outcome is the Civil Service (who are profoundly complicit in this process) way of saying “we fought back and explained why we had to survive”. On the same principle, in defence expenditure it tends to be the sharp-end squaddies who get fired – not the brass hats. Just fancy that.

So sticking to ‘welfare’ (into which all kinds of anomalies are thrown) the Government itself accepts that only around 60% of total cuts are welfare-related. Which means the real level of savings made by May 2015 at the expense of poorer people was around £21bn – or, over five years, under £5bn a year.

Hold those latter figures in mind: their relatively small size is inversely proportional to the Himalayan mountain range of lies you have been told about the ‘necessity’ of such cuts, ‘Britain’s need to live within its means’ and all the rest of the tosh.

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 “The only alternative to spending cuts is tax increases”

There are myriad alternatives to tax increases. To find them, however, means trying to decode the innately dishonest accounting of Whitehall Sir Humphreys.

In the clearest figures available on total spend estimated for the current fiscal (2015-16) there is a sum 3rd in size behind healthcare and pensions….and bigger than welfare. At a whopping £66bn, it is dubbed ‘Other Spending’

Drill down into that, and you find lots of tiddlers, plus another total at the bottom called – again – ‘Other Spending’. This comes in – way ahead of the sum saved on welfare to date – at £35bn.

In this twilight zone, we find these two oddities:

 

  • General Government 9.2bn
  • Protection £13.8bn

8.2bn of general goverment turns out to be ‘executive and legislative functions’, of which there are only three – the Commons, the Lords, and the Cabinet. The Slog has established that this does not include Whitehall, which has its own separate budget.

So we’re being asked to believe here that it costs £8.2bn to run, staff and administer a total of around 1600 legislators, staff and ministers of the Crown. Frankly, I don’t believe it.

‘Protection’ involves police, fire services, prisons and the Courts. But within this is £1.6bn devoted to ‘public order and safety research and development’. Translated, it means water cannons, gridding and other forms of crowd control: it’s for protecting them, not us.

 

Drilling further still, there are some less than tiddly-piddly sums at this second level, and these are the ones that leap out:

  • Broadcasting & publishing services £4.3bn
  • Economic enterprise development  £3.8bn
  • R&D Economic Affairs                          £6.1bn
  • Cultural services                                     £1.9bn

Every of these becomes a kind of sub-atomic zone peopled entirely by sets of initials beginning CK or GK. No further explanation is given, but they are all potentially explosive: broadcasting and publishing (now the politically neutral COI has been conveniently abolished) is, I know, abused on a daily basis: it is NOT the BBC, but it is a quiet third-level accountancy dumping ground in which to hide things like covert media manipulation and paid for PR…for example, of an anti-Brexit nature.

It is clear that NONE of the economic enterprise and ‘R&D’ is real research, because – laughably – that is recorded elsewhere at £0.0. But the total for this grand project is a whisker short of £10bn. As the non-financial economy of the UK has actually shrunk by 18.2% since Osbollocks began ‘rebalancing’ the UK economy, I would contend that – for all practical purposes – these spends should be diverted to the amelioration of people pauperised by austerity-fuelled recession.

Towards the end of my years working as an adman with the COI as a client, I met several senior civil servants and ministers. Based on what I was told at the time, my most likely ‘explanation’ of the numbers above would be a combination of cockups, consultants and hidden political communication budgets thieved off the taxpayer.

It comes to a total of £16.1bn PER YEAR…or 73% of the total cut from frontline welfare over FOUR YEARS.

In total, the dubious and/or unexplained costs of UK government per annum come to a total of £40.4bn per year….just short of the total budget for the Defence of the United Kingdom.

And I didn’t even start peering in the Defence budget. That is not what I’d call “no alternative to cuts in welfare”.

“The Government is not borrowing money any more”.

Deconstructing this nonsense is the work of a few lines: not only is the Government borrowing more money than ever before, it is servicing 50% more borrowing than when it came to power…and still running a £79bn deficit every year.

Osbollocks gets round this reality in two ways:

  1. By lying in his Budget speeches. During the 2014 speech he claimed the Government was “paying off the National Debt” and that it had “eliminated the First World War debt for good”. The Government is managing (just) to pay off the interest on the National Debt (if interest rates rose we would be in deep trouble) but the figure gets bigger every year because they overspend every year. The First World War debt was pure fraud: a transference via new debt bonds into the market and off the Treasury balance sheet.
  2. Constantly confusing the layperson by treating ‘debt’ and ‘deficit’ as the same thing. After 2014, this involved him in lying even about this, because he failed to reduce the deficit completely, and increased the debt massively.

These are the clear and immutable facts: the debt is the National Debt all up going back over more than a century; the deficit is how much more the Government spends than it earns.

The latest moving annual total for the 2016 fiscal DEFICIT is £79bn. By this time, it was supposed to be zero.

The latest total NATIONAL DEBT is estimated to be £1.53trillion. In under six years of Osbollocks nurture, it has risen almost exactly 50%.

It is an abject political failure, a total betrayal of every UK citizen beyond the fatcat 3%, and a hopeless performance made appalling by the unnecessary hardship imposed upon those who can least afford it.

Which brings me to the final fib…

“The country’s economic stability depends on spending cuts”

Were there even an atom of truth in this genuine Goebbels of a lie, we really would be in a mess many, many times worse than the one we’re in.

Let’s be really, really generous to Osbollocks and say that his TOTAL welfare savings over six years – ie, by the end of this fiscal – will amount to some £30bn net in that year. There’s no way he’ll reach that, but let’s just have some nice round figures to concentrate the mind.

Assuming savings of £30bn, and a National Debt of £1500bn (also very generous to the Chancellor) his savings will represent just 2% of the debt.

In actual fact, the Chancellor’s own estimate for 2019-20 fiscal is a mere £12bn saving on welfare spend. That will be a microscopic percentage of the Debt by then, which is on track to balloon to at least £1.7 trillion: to be exact, 0.7% of it. He might as well try to lower sea levels by urinating on the land.

The National Debt (and this is at the lowest interest levels in recorded modern history) costs £60bn just to service. That of is twice the size of the welfare cuts.

He could save (see earlier) a third more by cutting out just the most obvious incompetence and waste…and leave the welfare budget alone.

If he had done this since 2010, some £40bn would have been added to Britain’s gdp. In the Spring of last year, Price Waterhouse Cooper calculated that at the then growth outlook, this would produce “a temporary drag on UK growth”. Since that time, however, the rate of growth outlook has been variously cut between 4 and 10%. £40bn more IN the economy and £49bn OFF spending costs would have been £89bn more ‘economic profit’. Now that would have paid off all the interest….and improved the growth rate.

The truth is that the Chancellor has taken discredited ideological decisions to please his MPs, and political decisions to please those in the 3% who keep the Party going. This is why the three big lies have been necessary, it’s why they’ve had to get bigger as the failure became more obvious, and it’s why he will now compound the problem by asking the poorest 50% of the country to subsidise the unpleasant greed of the 3% by even more.

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It is obvious already that Osbollocks is going to blame the ‘unexpected global slowdown’ for the fact that his economic and fiscal policies have been a dismal failure. The Smuggies will accept The Fourth Lie because it suits their book so to do.

The Brexiters will – quite rightly – continue to point out that from 2019 onwards (or thereabouts) the UK could remove a further £41bn of costs by leaving the EU. Had Camerlot done this when it came to power, since 2012 we could have put some £120bn into deficit and interest reduction. But such is, of course, strengstens verboten under the terms of our Special Relationship with Amerika.

The global slowdown was no more unexpected than our own local disaster of Friedmanite monetarism and overly financialised capitalism since these depraved ligthweights came to power. They have inherited the debt legacy of “business friendly” Blairism, and will likely bequeath to us the corporate State of Camerlot.

I implore the Decency Spectrum yet again: we have no need to insult these people, merely to work during every waking hour to hoist them by their own petard.

It involves nothing more than the revelation of undisputed fact to vapourise their lies.

Yesterday at The Slog: Dolphin studies uncover a very odd trail of global media manipulation

30 thoughts on “REVEALED & EVIDENCED: The Four Big Lies that caused needless distress to 20.3m British citizens

  1. Superb analysis. Osbrown and the rest have long since disappeared up their own fundaments with an odious, and odorous, cocktail of disinformation and downright mendacious monetarist mumbo jumbo which, when exposed to the light of objective science, shrivels like an aubergine immersed in concentrated sulphuric acid. Poor man’s caviar aside, I know whose underwear would benefit from the application of vitriol – at least it would put out the fire, and we’re living with the smell of rotten eggs in any case.

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  2. Ok, hydrogen sulphide is not just flammable it’s highly explosive, before any of you chemists argue the toss about it’s usefulness as a combustion modifier! ;)

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  3. The situation is much, much worse if one considers unfunded liabilities as well. The Taxpayer’s Alliance calculates the TOTAL debt to be £8.6 trillion.
    http://www.taxpayersalliance.com/the_real_national_debt_hits_8_6_trillion

    One of the most dismaying things (among the many!) was the discussion over the weekend of potential tax reductions for the middle class in the budget while at the same time cutting back disability payments. Nobsore is insane.

    DavidC

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  4. Shocking waste figures that you present here.
    We just have to make sure that it’s not you and me feeding the many headed ugly monster.

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  5. I fail to understand how people not remotely trained or qualified for these jobs eg chancellor , get selected.Its in sane. Rupert’s little helper wasn’t even first choice as shadow chancellor ,he was third and third rate he remains .
    If you were applying for a job in a large organisation surely involving huge economics an HR department would want to know what you studied .” Urum Modern History 2.1 right ,so no accountancy or economics or business management even?”
    ” um no ”
    ” sorry George but we are going to have to say no on this one, it’s a bit serious and we really need someone who knows what they are doing.”

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  6. Spot on David…and most of it is the illegal funding of Sir Humphrey pensions….hugely dwarfs the expenses scandal – and done with Brooon’s knowledge.

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  7. Lampitt,
    It’s a shame I can’t find one of John’s (very!) old posts, prior to the Slog, describing Camermoron’s first job in media at OnDigital (if I remember correctly), where he was initially refused employment because he was a ‘plank’, only getting a job because his ‘Aunty’ contacted the chairman (again, if I remember correctly) and said ‘You WILL employ David’.

    Plank then and plank now.

    DavidC

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  8. The problem with only appointing those who have the approved qualifications is that you could end up with a Paul Krugman and that could be infinitely worse than a layman.

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  9. John in Cheshire,
    Whenever I read a piece by Krugman or see him on YouTube or wherever, I’m always reminded of Tim Robbins’s line to the Warden in The Shawshank Redemption.

    DavidC

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  10. robbing osbourne the opposite of robin hood… like the others he doesn’t need to know anything he is just another yesman doing and saying exactly what he is told to… and of course every time they open their mouths then lies pour out..

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  11. Nothing will change until the lies stop benefiting Osborne’s real constituency – the super-rich. They control the Conservative Party and control the mainstream media.
    Osborne’s sums haven’t added up for years but he’ll stay in position because he does what he’s told.

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  12. Osborne’s legacy will eventually end in tears.
    He will be abandoned and blamed for the financial ruin when Boris becomes PM.
    I believe that Boris can turn this country around. He has a good brain, a loud bark, and will get the right people into the Cabinet. The list of cabinet yesman f*ckwits at the moment, from the PM down is putting Britain in an appalling situation.

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  13. Ricoh they all took the same initiation test and no it didn’t include a pig but that applies to a few in all parties

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  14. To an observer, it is not difficult to label the serving cabinet members as either ;
    yesman, or dynamic and caring.
    Osborne is a fiddling yesman tinkering at the edges, and still losing money hand over fist whilst in permanent denial.

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  15. Why is a soveriegn currency issueing entity borrowing from the markets at interest ?

    The Government can borrow directly from the BoE (the interest rate charged doesn’t matter as all BoE profits are returned to the only shareholder – the Government)

    As you point out the interest is £60 billion per year, this could be removed with a stroke of the keyboard.

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  16. According to the GDP equations, the GDP of a country with a trade deficit can only grow if the government maintains a deficit(as it is a zero sum game). If it takes in more in taxes than it spends, the money can only come from the private sector which results in the net growth of private debt to fuel consumer spending and business investment. The private sector has income constraints ie it can’t borrow more than it can afford to pay back(and if it did, bankruptcies would occur), so eventually the debt-fuelled growth comes to a grinding halt and the economy crashes as private sector spending goes down to service the debt. However, the only spending constraint the government has as the sovereign issuer of its own currency is inflation, which is extremely low at the moment.

    Therefore it is far more preferable for the government to be in debt and running a deficit, than the private sector- whose desire is to net save to fund spending, not paying back loans. If the government invests in the right areas, the growth in GDP will rise faster than the debt to GDP ratio even with a deficit(as it did in the post-war period) and the people will become more wealthy as a whole, assuming the workers get a fair proportion of the pay(not a safe assumption in the era of neoliberalism).

    Osborne’s justifications for his incompetent policies are based on economic nonsense. The time to make cuts is when inflation is too high, not when it’s struggling to grow. Osborne is an idiot. He will only lead us to ruin, but fortunately, he can’t even hit his own targets which means that there is still a net flow of money from the public to the private sector, but still at the cost of the misery a bunch of people who can’t defend themselves(ie the disabled and sick who cannot just ‘get on their bike’ and find a job) who have had their benefits cut.

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  17. According to the GDP equations, the GDP of a country with a trade deficit can only grow if the government maintains a deficit(as it is a zero sum game). If it takes in more in taxes than it spends, the money can only come from the private sector which results in the net growth of private debt to fuel consumer spending and business investment. The private sector has income constraints ie it can’t borrow more than it can afford to pay back(and if it did, bankruptcies would occur), so eventually the debt-fuelled growth comes to a grinding halt and the economy crashes as private sector spending goes down to service the debt. However, the only spending constraint the government has as the sovereign issuer of its own currency is inflation, which is extremely low at the moment.

    Therefore it is far more preferable for the government to be in debt and running a deficit, than the private sector- whose desire is to net save to fund spending, not paying back loans. If the government invests in the right areas, the growth in GDP will rise faster than the debt to GDP ratio even with a deficit(as it did in the post-war period) and the people will become more wealthy as a whole, assuming the workers get a fair proportion of the pay(not a safe assumption in the era of neoliberalism).

    Osborne’s justifications for his incompetent policies are based on economic nonsense. The time to make cuts is when inflation is too high, not when it’s struggling to grow. Osborne is an idiot. He will only lead us to ruin, but fortunately, he can’t even hit his own targets which means that there is still a net flow of money from the public to the private sector, but still at the cost of the misery a bunch of people who can’t defend themselves(ie the disabled and sick who cannot just ‘get on their bike’ and find a job) who have had their benefits cut.

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  18. Nick,

    Whilst I agree with your last paragraph, George is not an idiot, he is worse, he is an idealogue.
    He truly believes and any dissent is from unbelievers/heretics.
    He is not alone in the corridors of power.

    Remember Ruth Kelly http://www.theguardian.com/politics/2005/jan/28/religion.schools

    Normal people find the ideology of groups like ISIS and the idea of the Caliphate abhorrent and yet we are represented by people with equally extreme views.

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  19. bobRocket – I may be the only one who now actually went from the Graun to the Daily Mail. Once I discovered how globalist it really was, the Mail – yes of course it it isn’t to be taken seriously in the Sidebar of Shame – but they do indeed pull up the Govt regarding the paedo revelations. What did the Graun print? An appeal for “calm” and “balance” from one its apologists.

    Once you find out the hold Cultural Marxism has had on us all the last 50 years you can see the bollocks for what it is. Germany where I live is a full on brainwashed traumatized land, unable to honestly think about what this immigration crisis is all about.

    The Mail also hates Chris Evans new Top Gear, which is also reason for celebration.

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  20. In case you are not totally convinced with the borrow and repaid figures from 1979, here are the figures since 1947:

    http://www.taxresearch.org.uk/Blog/2016/03/13/the-conservatives-have-been-the-biggest-borrowers-over-the-last-70-years/

    Whichever way you slice and dice these figures their message is loud and clear. The Conservatives deliberately mismanage the economy for their and their backers benefit (I am of course giving them the benefit of the doubt that successive conservative chancellors can’t so stupid to feck it up each and every time).

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  21. Late as usual, but does anybody know how much the Bank of England has given the government to reduce the deficits by returning the interest the government paid the BOE on the massive amount the BOE. spent on purchasing government Gilts and Treasuries through the magic of QE, thus lowering the interest even further the government has had to pay for the the everincreasing National Debt.

    Secondly does anyone know how much the government since 2010 has received in one off payments through selling National assets at knock down prices, eg the Royal Mail etc.

    Finally am I the only person to remember Osborne pompously bragging that his strategy meant that the UK Government was paying the lowest interest on government debt relative to its nearest rivals?

    Spain, Italy, Ireland etc have had even lower interest rates for several years now so what does that say about his long term plan.

    I think Frank Tyson said it all about plans when he said that everybody goes into a fight with a plan until they first get hit in the face!

    Like

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