The Black Hole

During the campaign you will hear a lot of claims about black holes. These are not for the space fanatics amongst you but the claims and counter claims about each sides promises and budgeting not quite adding up.

At this election with the spectre of the deficit and mounting national debt the Tories keep reminding us abuot the need to ‘balance the books’, have a costed programme of austerity have been why politics has fragmented somewhat over the last year from the main 3 parties. All seem signed up to some formula of austerity. A bit like pizza you can have deep or paced austerity. However, the end game has been the same – the elimination of the defecit as some holy grail. Personally I can see the need for Labour to be seen as financially prudent but austerity is a political as well as economic choice. It is not a given. There area many good economists (I retweet a good few) who will show it’s a false choice.

However, we have been confined to this state of affairs over this Parliament and onece gain Labour have been afraid to do anyhting too bold in terms of spending the cahs for fear of being labelled as profligate again. This was the agenda for the last year and looked as though it would continue throught the election. Tory Long Term economic plan ve Labour Chaos was the theme.

But over the last 3 days it didn’t seem to be working for the Tories as a strategy. So we have had a massive shift ahead of the Manifesto launches next week. The Tories started off with a £1.5bn promise to ‘freeze’ rail fares. In fact not quite a freeze but an ‘at inflation’ rise year on year. No idea where this £1.5bn was tom come from but small enough to almost ignore in the press. Then came a promise to give everybody 3 days volunteering leave. A ‘nice idea’ but a terribly poorly thought through policy. More of policy making later but I guess this one will never see the light of day in government.

Then in the last 24 hours has come the big one that has thrown this election debate about the deficit wide open. On top of the £7.6bn of tax cuts promised which the Tories can’t say how they will pay for them, we now have an £8bn (or even more) promise to fund the NHS – to be paid for by growth in the economy! Wow if it was that easy we can promise all sorts of new spending by claiming growth will take care of it. The problem is that it doesn’t – and certainly hasn’t over the last few years where growth has not delivered the tax reciepts needed to cut the deficit.

I will find some better IFS figures, logs and counter arguments to post here.

All too often my non-political friends get annoyed at all these figures flying around and what they mean. All too often politicians use the ‘£ billion’ figures too readily and nobody gets a frim grip on what this means for the economy.

More updates later once I have caught up with the days sport!

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