BBC Complaints: The link you need!

Tuesday, 16 March 2010


As UKIP leader Lord Pearson, receiving a rare invite onto the airwaves of Radio 4, said on today's The World at One (he got under 2 1/2 minutes and yet was interrupted twice by Martha Kearney), it's more than a bit rich for the European Commission, with its dismal track record over its own finances, to be lecturing any British government over its deficit.
Still the Great Bureaucracy has spoken and Labour has not enjoyed hearing what it has had to say. What can the BBC do to help Labour in its hour of need? How about getting Stephanie Flanders to spin the story so that it's really a bad news story for the Conservative party!!
The whole piece needs quoting to give you the full biased effect:
It's no surprise that the European Commission would like Britain to bring its deficit down faster than the government plans. (Nothing to see here then!) Potshots from Brussels have been a regular feature of HM Treasury life since the "excessive deficit procedure" began - and this time, the UK is far from alone. Nearly every EU country now has a deficit over 3% of GDP. I'm told that the UK will not be the only government this week that the commission tells to try harder. (So that's all right then. No reason not to vote Labour).

What's interesting about this story is the light it has shone on the two largest parties' plans for the deficit. Once again, we find that the chasm between Labour and the Conservatives on this central electoral issue is more of a ditch. And a fairly shallow one at that.

This will not come as a surprise to readers of Stephanomics (yeech!) But the commission report has helped underscore the point. (Now here it comes!:) It has also highlighted the lack of clarity in the Conservatives' position.

We keep hearing that the government wants to halve the overall deficit by 2015. We will hear it again next week in the Budget.

Now, another way to describe the government's plans would be to say it plans to cut the structural deficit - the borrowing that won't go away with the recovery - from 9% of GDP in 2009-10 to 3.1% of GDP in 2014-15. In other words, they would reduce the structural deficit by two-thirds over the period.

On the Today programme this morning, Ken Clarke initially suggested the Conservatives would eliminate the structural deficit by 2014-15.
(Did he? That's what Liam Byrne interpreted Ken Clarke as having said during their joint interview with James Naughtie, but when Ken Clarke said it was 'necessary to get rid of the structural deficit'
he didn't say (and it doesn't sound to me either that he meant) 'by 2014-15'. See if you think that's what he said, or meant. The crucial passage begins at 5.20 here: But he later stepped back from this, to return to the usual Conservative script, which is that they would get rid of the "bulk" of the structural deficit.
When Mr Clarke interrupted Liam Byrne to protest about the interpretation the Labour minister was putting on his perhaps loosely-chosen words, saying "No I'm not, I'm saying the bulk of the structural deficit", I believe him completely - and hearing the clip in context, I suspect you will too. Steph, however, is wholly with Liam Byrne - and, boy, how she milks it!

A few observations about this.

One is that on the big macro question of this election - cutting the deficit - the Conservatives have actually given us yet less detail than Labour. Yes, they have offered some micro tasters: a few benefit cuts here, a public sector wage freeze there. On that front, you could say they've offered a bit more than Labour.

But on the basic question of how much they hope to cut the deficit over five years, Labour has a clear answer. The Conservatives do not. If Ken Clarke, probably the most experienced - and certainly one of the most economically literate - members of the shadow cabinet
(suggesting, of course, less economic literacy from others in the shadow Treasury team. Who could she mean?) , cannot stick to a single answer in the course of a 10-minute interview we can be fairly sure there is no precise answer to the question that the Conservatives are willing to offer.

But what if Ken Clarke did stick to a single answer in the course of his 10-minute interview - as I think it's clear that he did!!!???

Anyhow, on she goes:

So, what is the difference between the parties? Well, that gets us back to the parlour game of what counts as "the bulk" of the structural deficit. We are told that the Conservatives are hoping to echo the language of the governor of the Bank of England on this point. He talked about getting rid of a "large part" of the structural deficit over that same time frame.

Is two-thirds a large part? As I've said before, if you took half of my dinner I would consider that a large part. If you took away two-thirds I'd feel seriously hard done by. I might well say the bulk of my dinner had been nicked.

Reading between the lines, the IFS have previously concluded that the Conservatives would like to eliminate the current structural deficit - the part of the structural hole that is not due to public investment - by 2014-15. On current Treasury forecasts for the economy, it thinks that meeting this target would involve "extra" cuts in borrowing of just over 1% of national income, or £15bn in today's money - on top of the 4% of national income cumulative cuts in borrowing by then that Labour has set out.

But note that this is simply the IFS interpretation of Conservative policy, based on what George Osborne has said. It is not official policy, and behind the scenes, officials will neither confirm nor deny that this is what they have in mind. This is their right. But you might think it a bit strange, when they have made cutting the deficit such a central part of their campaign.

Yes, the government has not said much about how its overall spending plans would be reached. And yes, it's true that the numbers are subject to huge revision. What we thought was a £37bn structural hole 18 months ago, was revised up to £90bn a year ago, and then revised down to £73bn in the November PBR. If the Tories tied themselves down to a fixed target, they could find the spending and tax implications vary hugely from year to year. But if this is their thinking, perhaps the Conservatives should explain that, rather than simply claiming - in effect - that whatever Labour plans to do on the deficit, they would do more.

Another key point, which the IFS's director, Robert Chote alerted me to, is that, on this interpretation, the Conservatives wouldn't be tough enough for the European commission either.

Brussels always looks at the "treaty deficit" - the deficit as measured under the Maastricht Treaty, which excludes public sector corporations, and is therefore a bit bigger. In the leaked report, the commission says it wants the UK to bring its "treaty deficit" down to 3% of GDP in 2014-15, instead of the 4.6% forecast in the PBR. Other things equal, that implies an addition 1.6% in fiscal tightening by that year, versus an extra 1.1% under the Conservatives. So the Conservatives might not measure up either.

Now, the Conservatives may say this misreads their position.
(They certainly should if it does!) But to do that, they would surely need to say what their position is. Until they do that, we can only conclude, once again, that the difference between the parties is less than they would have us believe - not just on the short-term approach to cutting the borrowing but well into the future.


You could almost guarantee that Stephanie Flanders would take this sort of stance on a story that everyone else outside the Labour Party sees as being worse news for Labour than for the Conservatives, whatever the vaguenesses of the Conservative position (or the credibility of the European Commission).
The piece features prominently on the home page of the BBC News website.

P.S. Sorry for the strange changes in text size here!*

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