28 June 2009

Shoring up Labour’s core vote

The Sunday Times has a superb piece on the public spending debate.  Firstly, the article lays out how the various percentages are arrived at.  Marvellous stuff for members, like me, of ‘Using Match Sticks to Understand Economics Society’:

The nub of the debate, however, is what happens to “current” spending on services. On the face of it Brown can claim there will be a 0.7% annual real-terms rise during the next parliament. But Robert Chote, director of the IFS, pointed out that Brown’s apparent increases quickly turn to cuts when new, unavoidable – and unwelcome – spending is taken into account. Interest payments on the government’s huge borrowing will rise 8.4% a year while spending on social security will go up by an annual 1.7% and other unavoidable elements will climb 1.9%.

That means, according to the IFS’s calculations, that other departmental spending will be cut 2.3% a year from 2011, reaching 7% over three years. If health and overseas aid were maintained, it would mean cuts for other departments would rise to 9.7% over three years, close to the 10% figure quoted by Lansley.

It gets worse. Balls has suggested most of his education budget will be preserved. In that case, according to Chote, the scale of the cuts Labour would have to make for other departments would rise to 13.5% over three years.

In other words, the Tories are spot on with their analysis.  However, this is not worrying Brown down in the bunker.  It is the panic that has set in after the recent election results:

We don’t care if the commentators or the economists turn against us, said one minister. This is all about shoring up the base in the northern heart-lands, which we lost in the European elections. We don’t want or need them to understand the nuance of the argument. We just want them to hate the Tories again.

Of course, Brown doesn't want people to understand the details.  He is got away with treating people like fools for years.  The point here is that Labour’s electoral prospects are so bleak that the overriding priority is to protect the party’s core vote.  What makes matters worse for Brown is that he is failing to achieve this as the polls are showing Labour is stuck in the low 20’s.

Prepare yourself for a huge propaganda blitz from Brown central this week.  The irony is most of us will not be listening as we soak up the sun or watch the tennis.  Let us pray that Brown does not wish Andy Murray good luck.  If he does, you can safely place a bet on him losing his next match.

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