Nice one, guys.
A flaming quid! (Hip Hip! / Alamy Stock Photo)
Last Wednesday’s budget speech by Phil Hammond was well received by the people who matter. Economists warned of "two lost decades" without wage growth, but top Tories found it convincing. As Tim Shipman reported in the Sunday Times, "the day after Hammond appeared to have saved the government’s credibility – and with it his own career – there was a relaxed mood in No 10". Dan Hodges in the Mail on Sunday, meanwhile, reckoned that "the PM has finally found a moment of peace. Few can begrudge her that."
The Tories were happy, and remember: that’s the main thing.
Hammond came out with his job intact because he had front-loaded his gaffes – telling Andrew Marr "there are no unemployed people" the previous week – and had managed to sell the line that we have turned some sort of fiscal corner "as we at last see our debt peaking".
While that might sound like a cause for celebration, Richard Murphy, who writes the "Tax Research UK" blog, has run some numbers and discovered an interesting fact: two-thirds of the UK's national debt comes from the Tories. To be specific, 67.2 percent of the national debt since 1946 can be attributed to the Conservative Party, while 32.8 percent is down to Labour governments.
To be fair, we’ve had more Conservative governments, so they’ve had more time to rack up the debt. Taking this into account, Murphy calculated the average borrowing of each party per year in government: the Conservatives borrowed more on average.
Even before the financial crash, which necessitated extra borrowing to stop the economy from tanking, the Tories tended to borrow more. In today's prices, Conservatives borrowed £19.9 billion per year against Labour’s £18.9 billion in the years up to 2008.
Labour also paid off the national debt a quarter of the years they were in office. For the Tories, that figure is less than 10 percent. That may be something to do with the fact that Conservative analogies about Labour running the national economy like the household budget of that guy at the pub who always heads to the toilet for a really long time when it’s his round are, in fact, bullshit. Investment into the economy can help bring down the debt overall.
So, Conservatives governments borrow more and pay back less. But I thought there was no magic money tree.