Will Bunn: Why George Osborne still runs Britain

[LeftishBrit]

Fifteen years ago, on 11 May 2010, George Osborne arrived in the Treasury with a mandate to change the British economy. The deficit had reached more than £100bn, a hole in Britain’s finances twice the size of the armed forces. Who was to blame? The truth was confusing, technical and international. It involved understanding mortgage-backed securities and credit contraction. It was also depressing, because the people who were most at fault (investment bankers) would obviously never pay for the damage. So the Conservatives and the Liberal Democrats sold the public a simpler, more satisfying story: it was Labour’s fault, for spending too much money.

This was probably the most consequential and obvious lie in modern British politics, bigger even than the claims that would be made about the EU six years later. It was a risk, but Osborne told the story better than anyone else in his party, and it opened the door to becoming a more radical government. The story also contained its own solution, which was the Conservative principle that government spending is not a benefit to the country, but a problem to be solved. ...

hat are Labour’s ideas? The public is left guessing from a series of muddles. We know Labour wants a stronger border force, an improved NHS, thousands more teachers, and the state-assisted rollout of renewable energy. But it also wants to achieve these things with a smaller state that borrows less. It wants to improve social care, while letting fewer people into the country to take jobs in social care, and without changing the tax system that funds it. It wants to reset our relationship with the EU without repeating the Brexit wars. It wants to train the people needed to build 1.5 million homes using an additional yearly budget smaller than that of the University of Hull. It wants to address inequality and poverty while cutting disability benefits, removing the winter fuel allowance from ten million pensioners and maintaining the two-child limit on Universal Credit.

This leaves the one clear set of principles to which we know Rachel Reeves is dedicated: her fiscal rules. I recently asked the polling company Ipsos to survey the public on how many people could explain a fiscal rule, or even name one. Of a representative sample of more than 1,000 people, the most popular response was: “Don’t know.” The second most popular response was, “Closing the £22bn black hole,” which is incorrect. Just 4 per cent of voters were confident that they had a strong understanding of Reeves’ fiscal rules. Four times that number had “never heard of them”. ,,,

(Link to long but interesting article in the New Statesman):

https://www.newstatesman.com/cover-story/2025/05/why-george-osbourne-still-runs-britain

[róisín_dubh]

1. Labour can pound sand

I can’t vote, so this means fuck all to them. But you can imagine why I’m so irate about this (I’m on a Skilled visa about to have the rug pulled under me regarding indefinite leave). They need to stop pandering to Reform- punishing Skilled workers ain’t going to garner Labour any Reform voters (and it is in fact pissing off everyone); nor does this solve the boats problem. They need to stop tacking to the right, take a lesson from Democrats for gods sake.
The winter fuel payments messaging was a total debacle. There is a way to protect low income seniors, it’s called doing some fucking basic means testing, but that requires forethought and takes a little longer than being reactions.
Also here’s a thought: LEGALISE WEED AND TAX IT!
Sorry, rant over. It’s exhausting being an immigrant knowing every political party but LibDems and Greens hates your existence in the country- and I’m a white, middle-aged American woman with a PhD and a law degree (from a UK university no less) who just wants freedom to work to her skill level 🤬

[Emrys]

2. 12 years ago, the accounting error that led to the persistent fad for austerity measures and strict fiscal controls

was widely acknowledged. But for some reason it caught the public imagination and has blighted our politics ever since:

The error that could subvert George Osborne's austerity programme

The theories on which the chancellor based his cuts policies have been shown to be based on an embarrassing mistake

It was a mistake in a spreadsheet that could have been easily overlooked: a few rows left out of an equation to average the values in a column.

The spreadsheet was used to draw the conclusion of an influential 2010 economics paper: that public debt of more than 90% of GDP slows down growth. This conclusion was later cited by the International Monetary Fund and the UK Treasury to justify programmes of austerity that have arguably led to riots, poverty and lost jobs.

Now the mistake in the spreadsheet has been uncovered – and the researchers who wrote the paper, Carmen Reinhart and Kenneth Rogoff, have admitted it was wrong.

The correction is substantial: the paper said that countries with 90% debt ratios see their economies shrink by 0.1%. Instead, it should have found that they grow by 2.2% – less than those with lower debt ratios, but not a spiralling collapse. Yet cutting public spending to avoid that contraction has become a linchpin of both George Osborne's and the IMF's policies.

https://www.theguardian.com/politics/2013/apr/18/uncovered-error-george-osborne-austerity