Why is it taken as axiomatic that the Tories are better at running the economy?

The myth of Tory economic competence should be confronted every time that it's suggested. The Tories don’t tell you that they needed an IMF loan in 1956, that they left behind a huge balance of payments deficit in 1964 (which Labour turned into a surplus by 1970), that they gave us double-digit inflation in 1974 and then left a debt equivalent to 43.76% of GDP in 1997. They don’t tell you that in the month before Thatcher was booted out in 1990, inflation was higher than when she came in, or that the Tories left office in 1997 with unemployment higher than when they came to power on the strength of those ‘Labour isn’t working’ posters in 1979. They don’t mention the two recessions their policies caused in the 1980s, and they certainly won’t talk about ‘Black Wednesday’ in 1992.

The other side of the coin is to peddle the lie that every Labour government leaves behind a financial mess. It wasn’t true in 1951, not true in 1970 and not true in 1979. Much of the IMF loan sought in 1976 (following the effects of the quadrupling of the price of oil) was never taken up, and the economy was growing steadily until Thatcherism was inflicted on it.

'The mess' was only true in 2010 because Gordon Brown had no alternative but to bail out the bankers when global capitalism proved itself to be a failure, but even then the economy had started to grow until Osborne stamped on the green shoots of recovery. The longest uninterrupted period of growth in the UK economy in the last 200 years occurred when Brown was chancellor of the exchequer. The Tories supported Labour’s spending plans until the global credit crunch occurred, and the Tories supported the bailout of their banking cronies, who Cameron thought had been subject to too much regulation. The UK's deficit prior to the global financial crisis (which few economists predicted, which no politicians could have avoided and which could hardly be blamed on one government's fiscal policy) was lower than it had been in the mid-1990s. But trust the Tories not to let the truth ever get in the way of their mythology.

It's that confident assurance that comes from a Public School education.

More popularly described as bullshit.

The people of the country natrually assume that the rich bleeders would not get rich if they did not know what they were doing with their money,or the countries money.
They do not realise that instead they are robbing the poor to make themselves rich.

Re: Why is it taken as axiomatic that the Tories are better at running the economy?
Simple really, all the public hear all the time is that we have the highest growth in the G20, we can now finish building Labours 2 Aircraft Carriers, they have miraculously found out how to get the cash for the NHS (necessary to finance the private healthcare clinics so beloved by this Government).
Strange isn't it, after almost 5 years of cruel austerity without their 2005 manifesto promises and targets met, without passing their own ability tests like losing the triple "a" credit rating, etc. etc., etc. Yet in this 5 years the opposition have not at any time taken the initiative and attacked the Tory led Coalition Government on their record despite the many opportunities, with 3 weeks to go they are now starting to mumble, too little to late IMHO.
If this election go's the same way of the last, I will place the blame fairly on their 5 years of relative silence.
I am luckier than many as they can no way effect me financially, myself and my businesses are doing very well, but I really hate what this evil Coalition Government have done to the sick and poor in this country.

Congratulations bobby on your businesses and how well they are doing as not everybody can say that can they.
BUT this government has crucified myself in the last year especially with regards to my disability benefit ETC, and the sooner they are out the better.

(Not everyone agrees with the topic heading)

IMF says UK still in deficit in 2020

http://www.bbc.co.uk/news/business-32327177

Because we have borrowed so much off them as a country to keep us afloat is it not OW?

And I think I saw that in the Telegraph - so even the dyed-in-the-wool Tories have something to think about

Do they actually think boatlady?

Many high achievers vote Tory - I guess if you never experience failure it gets hard to understand that everyone's not like you.

On Daily Politics David Gauke has been questioned by Andrew Neil after IFS report that the Tories need to be more open where the cut will be made. His first statement was the the Tories need to make 'Financial Adjustments'....So in line with IDS request for 'Zero Hours Contracts' to be renamed.....Cuts in departmental budgets will from now on be called Financial Adjustments........

When pressed further Gauke just said how they, the Tories had managed to save money by selling government owned land, Neil pointed out once land had been sold it could not been sold again......

Nice to see a Tory squirm.......

It does seem that many more people are beginning to see through the Tory narrative about the economy

The Tories will just sell anything will they not?

The economic consequences of George Osborne: covering up the austerity mistake

From an article by Simon Wren-Lewis:-

"The coalition defined itself as a government of austerity or, as its members preferred, as a government with the courage to take the hard decisions necessary to deal with the deficit. In its first two years it did what it had promised to do – and more – and as a result inflicted palpable harm on the economy. The recovery was delayed, costing the average household the equivalent of at least £4,000. In 2012 the government departed from its earlier plans and eased up on austerity, but pretended it had not.

The numbers are stark. GDP per head, a far better indicator of prosperity than GDP alone, grew on average by just 1% a year between 2010 and 2014. The past few years, as we recovered from the crash, should have been a time of above-average, not below-average growth. Even growth in the past two years has been only average by historical standards.

A government entering an election with that kind of performance should be trying to avoid talking about its economic record at all costs. Yet the opposite is the case. Indeed, the Conservative Party has an election platform that promises to repeat exactly the same mistake it made in 2010. As a macroeconomist, I find it very easy to explain the impact the government’s mistakes had on the economy. I find it much more difficult to understand how it might get away with them, let alone promise to make the same mistake again."

For the rest of the article:-
http://www.newstatesman.com/politics/2015/04/economic-consequences-george-osborne-covering-austerity-mistake

So looking at the article Ivan, when/if the tories get back in power for a third term,that means they are going to make the same mistakes as they did in 2010? is that correct?

More apologies i'm afraid not third term only 2nd term, yet more blushes from this department.

UK economic growth halves ahead of general election

Extracts from an article by Nicholas Watt and Angela Monaghan:-

Latest official figures showed the economy grew by just 0.3% between January and March, half the rate of the previous quarter. It was the slowest rate of growth since the end of 2012, when there were fears Britain would tip back into recession. The weak growth figure comes at an awkward time for the Tories, who have made the economy a major battleground in the election. Ed Balls seized on the weak data from the ONS saying: “While the Tories have spent months patting themselves on the back, these figures show they have not fixed the economy for working families….for most people bills have gone up faster than wages”.

Britain’s recovery is still heavily reliant on the consumer, with the service industry the only key sector of the economy to grow. Meanwhile construction output fell by 1.6%, industrial production was down 0.1%, and agricultural output shrank 0.2%. A breakdown of industrial production showed manufacturing output grew by just 0.1%, as the government’s much-hoped-for export and factory-led recovery remains elusive. In 2012, Osborne set a target to double UK exports to £1tn by 2020, a target that now looks out of reach, according to the British Chambers of Commerce.

TUC general secretary Frances O’Grady said: “The slowest recovery in modern history just slowed down again. This is bad news for jobs and living standards, and Tory plans for extreme cuts after the election risk completely killing off this faltering recovery and plunging the economy back into even deeper trouble”.

For the whole article:-
http://www.theguardian.com/business/2015/apr/28/uk-economic-growth-slows-ahead-of-general-election

There must be at least the possibility of a voter backlash if a Party were to welcome disappointing economic news at this stage of the Election.

The big lie of economic success may still not save the Tories

Extracts from an article by Seumas Milne:-

"Cameron and Osborne have always banked on the economy to see them through. But the signs are it’s all starting to fall apart again. Quarterly growth has halved to 0.3%, production is down, construction is down. Without the dramatic fall in oil prices, Britain might even be heading back into recession.

Quite how the Tories and Lib Dems have managed to present themselves as economically competent is something of a political mystery. By any objective measure, they have been an outright failure, including in their own terms. Cameron and Osborne inherited a growing economy and snuffed out recovery with savage cuts and tax increases. When it finally resumed, they delivered the slowest recovery on record. Every one of Osborne’s key economic targets was missed and had to be abandoned.

The abject economic failure of the Tory-Lib Dem government covers falling living standards for the majority, a ballooning trade deficit, rampant job insecurity at work, a shocking productivity record, escalating private debt and stagnating business investment. The result has been mass underemployment, agency working, short and zero-hours contracts, bogus self-employment and rampant low pay. As to ‘rebalancing’ the economy, there has been none. And now they’re planning to do it all over again: £12bn of cuts in ‘welfare’ and £13bn to unprotected departments. A new wave of austerity threatens once more to bring the economy to a halt and derail the Tories’ own plan and targets."

For the whole article:-
http://www.theguardian.com/commentisfree/2015/apr/29/big-lie-economic-success-may-not-save-tories

The reason for the Captain always going down with the ship is that he is held personally responsible for any such occurrence. If something happens "on your watch" there can be no excuses, which is what bedevils Labour, whose misfortune was to be on the bridge when the Credit Crunch struck in 2008.

It's not fair, but what ever is fair about politics?

And here's another thing -

Thames Water has proposed a giant Thames Tideway Tunnel, 15 miles long, to prevent raw sewage being discharged into the river. The coalition government offered to cover costs if they rise beyond a certain figure, generously thereby making the taxpayer responsible for any over-run.

Thames Water, which is owned by a gaggle of overseas investors, has paid them more than £1.4bn in dividends since 2006, but pays a minimal amount of corporation tax.

Danny Fortson, The Sunday Times, 3 May 2015.
(links through internet paywall)

Jeremy Corbyn is right to blame the banks, not Labour, for the financial crisis

Extracts from an article by Larry Elliott:-

"Most Labour members have spent the past five years believing that there was no overspending or reckless borrowing in advance of the deep recession of 2008-09. Instead, they have always said the reason for the crisis was that the banks were too laxly regulated. They suspect that Burnham, Cooper and Kendall by and large agree, but have decided the line to take is that while Labour did not do anything wrong, political reality means they need to apologise anyway. Corbyn is the only candidate sticking to the line that the banks were to blame and he is reaping the benefit. Not least because he is right.

Support for this argument has helpfully been provided by a recent House of Commons briefing paper from Matthew Keep. In the 10 years between Blair’s election victory in 1997 to 2007, the year the subprime mortgage crisis broke, the average budget deficit was 1.4% – half the average under Thatcher and Major. As for national debt, this stood at 39.9% of GDP when Brown became chancellor and was 36% when he succeeded Blair as PM. Debt interest payments amounted to 2% of GDP, lower than the Tories ever managed between 1979 and 1997.

There is scant evidence that it was Labour’s fiscal irresponsibility that caused the crisis. As Corbyn has noted, people did not queue outside Northern Rock branches for three days in September 2007 because Labour was spending too much on teachers and nurses. It has been a catastrophic political blunder not to challenge the myth that Brown’s government caused the crisis and the austerity that followed."

For the whole article:-
http://www.theguardian.com/business/2015/aug/09/jeremy-corbyn-labour-overspending-did-not-cause-financial-crisis

Partly of course because the Tories own most of the media.

It's utter nonsense of course; the mismanagement of for instance the Royal Mail sell off shows how economically illiterate the average Conservative is.

biglin wrote:Partly of course because the Tories own most of the media.

That knocks the nail on the head for me. The answer lies not in underlying economic performance, as relevant as it is, but in its interpretation and presentation by large swathes of the press to meet a specific agenda.

It should not have been difficult to get the point across that under the coalition that growth was down, deficit elimination failed and national debt rose greater than under any previous peacetime government. It was a disaster, but even more so by their own benchmarks.

There lies the challenge for the future. Can only governments pre-ordained by Murdoch be electable, or do we get on with building new and alternative press sources to challenge that consensus?

Sun Tzu - "Always fight the battle under your own terms"

"...building new and alternative press sources to challenge that consensus?"

I think it would have helped if we had enjoyed the benefit of an Opposition which had actually taken the opportunities it had to broadcast more effectively the lies and distortions which came forth from the Tories and al their mouthpieces. As it was - and indeed still is - there is a deafening silence over the continuing propaganda which belches forth from right-wing sources - eg the recent DWP ( ie Duncan Smith's) leaflets on sanctions...

There is validity in that too, exacerbated by two very badly timed periods of introspection choosing new leaders and a mortal fear of appearing anything to the left of right by actually opposing anything. I'm being slightly unfair, but Labour certainly conceded the economic ground and is in danger of giving up on both welfare and migration.

That said, it matters little what the message is unless its getting a fair hearing in the mass media, and they're all off playing for t'other team. Create alternatives or continue to fight elections on others' terms.

Why is it taken as axiomatic that the Tories are better at running the economy?

Dunno mate, but they have seemed better at running their Leadership Election.

But don't you see some possible fun when Cameron actually sets a date to go and we start to see Osborne and May try to undermine each other and the inevitable Boris Bandwagon.

And might we see a candidate from the more extreme elements of an already extreme party. How about a real wild card like The Hon. Jacob Rees-Mogg who might be seen as the same sort of left-field ( well, right-field in his case) Likely Lad as Corbyn is for Labour. I jest, of course...

"when Cameron actually sets a date to go"

You make it sound as if a Conservative Leader ever has much choice in that small matter.

Silly me.

It could all be down to that call from Mr Murdoch...

The bogus claim that the Tories are better at running the economy long precedes the 2008 global crash. It can be traced back to at least 1967, when we had fixed rate exchanges and Labour eventually had to devalue the pound – after the government had spent three years trying to sort out the balance of payments crisis inherited from the Tories in 1964. That was when outgoing Tory chancellor Reginald Maudling said to his Labour replacement, James Callaghan: “Sorry about the books, old chap”. To the best of my knowledge, Labour did not spend the next few years milking that remark.

After a turbulent four years of a Heath-led government, Labour returned to power in 1974 to inherit inflation which was 13.4% and rising. That was partly because of the quadrupling of oil prices by the Gulf states, but partly because of the ‘Barber boom’, engineered by Heath’s chancellor to try to simulate economic growth in time for the next election. Inflation peaked at over 25%, but did anyone blame the previous Tory government for it? No, it was “all the unions’ fault” when they tried to protect the living standards of their members.

The Tories seldom let us forget the IMF loan of 1976, much of which was not taken up, but they never remember their 1956 loan, when the UK economy was in a much more parlous state. Inflation had fallen to 10% by 1979, and the economy was growing, but that gets overlooked. Add in the grossly exaggerated ‘winter of discontent’ and the Tories had eighteen years to embed in the nation’s psyche that Labour always leaves the economy in a mess. As Churchill once said: “History is written by the victors”.

Further Tory ‘evidence’ of Labour incompetence is the sale of some gold by Gordon Brown in 1999. No mention is made of the fact that the money was invested, or that gold earns nothing (but storing it costs money). When Geoffrey Howe set about “squeezing inflation out of the system” in 1979, he should have known that gold would fall in value and sold some of our reserves. Its price went down throughout the 1980s and 1990s, and it was quite understandable that Brown thought we should “cut our losses”. If you hear any Tories peddling this yarn, just remind them of the sale of Northern Rock, the Royal Mail and RBS, all at well under market value.

http://liberalconspiracy.org/2010/02/24/why-tories-are-deluding-themselves-over-browns-gold-sell-off/

Phil Hornby. Please correct me if I’m wrong, but there seem to be two themes running through most of your posts:-
1. That Labour has been an ineffective opposition.
2. That Labour will only win power if it advocates Blairite policies.

Could it be that we don’t get as much opposition to Cameron’s government as we would all like because the shadow cabinet has been dominated by Blairites, and they accept much of the Tory mythology about austerity, welfare cuts and privatisation? Just a thought.

Ivan -

On 1. I think the opposition to Cameron and his Tory-led crimes has been pitiful. Much more could and should have been articulated to highlight the cruel practical effects of what has been done , rather than simply adopt a traditional opposition stance of trading statistics and rhetoric and the yah-boo of everyday Commons behaviour.

On 2. my point is that to be fully-effective as a political entity a party must have power. Blair knew how to win - and won. Not just once against a Tory Party which was mired in sleaze, but three times. He had a strategy to win and the Labour faithful must have voted for his policies. Now, it seems, many of those faithful have decided that they were not suitable policies all along. Incredible and unconvincing as an argument.

However, it is no so much the so-called 'Blairite' policies which I feel are important - it is the presentation of an effective 'theme' to win voters which can stimulate success. Blair - along with the now also unpopular Mandelson , Campbell et al - constructed a brand and framework to which voters felt they could sign up. The result was to unseat the pathetic and weedy Major, humiliate successive Tory leaders, and free the nation for 12 years from the Tories' grip. It may not have been the medicine of the traditional Left, but it effected an acceptable cure of sorts for the disease of 1990s Toryism - or at least significantly reduced the symptoms.

I am not suggesting that there is a necessity for 'Tory-lite' policies - but there does have to be an appropriate level of voter-appeal if power is to be regained. I have never to my recollection posted anything which suggests that I favoured any specific policy which was Blair-initiated. But there is much to be learned in my view from his approach to ,and strategy for, winning. I mused in an earlier post that once the first priority of being elected is achieved , it might be possible and desirable for a Labour government to 'educate' the public into the realisation that - despite the media propaganda - left-wing policies are not harmful and will not cause a multitude of financial catastrophes, but will promote improved social fairness and harmony.

But to do so , the party must persuade the electorate to cross the threshold of trust - not unlike a frightened, ill-treated animal which has been conditioned by experience to fear human contact and needs initially to be calmed, encouraged and reassured before it will take food from your hand.

I am not by any measurement a shrewd political thinker, but my gut instincts for what works has served me satisfactorily in a number of ways through the years. Always content to be proved wrong, however...

Aspiration is what drives election results. The majority of parents want their children to have a "better life" and will do what they can to assist that outcome, whether by struggling to pay for private education or changing home address for access to better schooling.

The Tory party and its supporting right-wing press foster those aspirations and continually extol the virtues of self-sufficiency. Regrettably this leaves little space for compassion regarding the less capable among the population, who are regarded as competing for a slice of the national cake which others have baked.

A Socialist manifesto must always include proposals for fairer wealth-distribution, a policy which appears most attractive to those with the fewest advantages. But for some unexplained reason those people do not vote accordingly, even though they have nothing to lose by it. Crack that single problem and Labour would win every election by a landslide.

Unsurprisingly, aspiration will usually beat apathy.

http://think-left.org/2015/09/05/corbyn-danger-danger-for-whom/


An interesting and to me persuasive look at the 'controversial' economic policies proposed by the Jeremy Corbyn camp. The author's final comment comes I think near to the truth of the matter

Therein, we find the profound radicalism of Jeremy Corbyn’s threat to  become Labour Party leader.  Should he win, it will be by a process that does not require the approval of the Labour Party elite.  Corbyn is not the danger that fills them with fear and loathing; it is the spectre of democracy.

The Labour Party -not a happy family, is it?

Given the now all too obvious lack of confidence in the erstwhile party leadership, why did those who voted Labour actually do so if they hated the 'powers that were' so much?

All this does not bode well for the future, in my view, but we shall see soon enough whether the currently 'do no wrong' Corbyn will be the answer to all those prayers. And, if not, what will the next excuse for failure be...?

QUOTE: ....why did those who voted Labour actually do so if they hated the 'powers that were' so much?

There is a song by Stephen Stills that runs something like:

And if you can't be with the one you love,
Love the one you're with, Love the one you're with,
Love the one you're with, Love the one you're with.

You might take it to mean that sometimes people just have to make a choice which is the least bad of the options available to them.

I know the song - and I follow the logic.

But there was no hint that the level of dissatisfaction with the available 'least worst option' ( presumably now damned as 'Tory-lite) was quite so bad as it now appears to be regarded.

It is a strange thing, this politics business...possibly a case of 'you've lost that lovin' feeling...' ...

Phil Hornby wrote:-
Given the now all too obvious lack of confidence in the erstwhile party leadership, why did those who voted Labour actually do so if they hated the 'powers that were' so much?

Ah, I'm pleased to see that our 'quote' facility does still work.....  

Ed Miliband is a decent bloke, not something you’d ever say about Cameron. He had some good policies, but they clearly didn’t go far enough to attract those who instead chose to vote Green, SNP or UKIP – or the 34% of the electorate who didn’t vote at all. Maybe he was too timid, and he made a few gaffes – posing with a copy of ‘The Sun’, forgetting some of his speech, and that bloody stupid headstone at the end of the campaign. However, as I’ve said many times before, anything positive from the Labour Party hasn’t been reported in recent years, not even by the now cowed BBC. For example, Andy Burnham’s major policy initiative in January 2014 on merging health and social care was largely ignored by the media. Whether Jeremy Corbyn will be any more effective in getting Labour’s policies reported, only time will tell.

When you only get the chance to register your opinion on the government once every five years, most people with an interest in politics will, as oftenwrong says, choose the least worst option if they don’t feel positive about any of the parties. For example, I’d still vote Labour if, very unlikely though it is, Liz Kendall was leading the party at the next election. If anyone hates the Tories as much as most people on this forum seem to do, surely the logical response is to register that by voting - and by voting against them in the most effective manner?

Speaking of the Tories, why is it taken as axiomatic that they are better at running the economy? Thatcher came to power in 1979 determined to squeeze inflation out of the system. At the time it was 10.3%, a year later it was over 21%. In October 1990, the last full month before she was booted out by her colleagues, it was 10.9%. Her government spent billions of pounds from North Sea oil and privatisations and had nothing to show for it.

Even a Tory has admitted that Labour in 1997 inherited a deficit of 3.9% of GDP (not a balanced budget), and that by 2008 it had fallen to 2.1%. Labour also inherited a debt of 42% of GDP; by the start of the global banking crisis of 2008, the debt had fallen to 35%:-

http://www.huffingtonpost.co.uk/ramesh-patel/growth-cameron-austerity_b_2007552.html