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| The Go Figure election guide, part 1 | The Go Figure election guide, part 1 |
| (about 23 hours later) | |
| In his regular column, Michael Blastland offers a small sample of some of the measurable things you might hear said in the run-up to the election - and what they might mean. | In his regular column, Michael Blastland offers a small sample of some of the measurable things you might hear said in the run-up to the election - and what they might mean. |
| The date we don't - yet - know. But some time in the next six months, there will be a general election, and the campaigning has begun in earnest. Promises are being made, promises laced with numbers, but how best to interpret these - and tell whether these promises have been kept? | The date we don't - yet - know. But some time in the next six months, there will be a general election, and the campaigning has begun in earnest. Promises are being made, promises laced with numbers, but how best to interpret these - and tell whether these promises have been kept? |
| 1. REAL-TERMS INCREASE | 1. REAL-TERMS INCREASE |
| What is a "real-terms increase", as promised by David Cameron for the health service? It means more than the general increase in prices, more than inflation. | What is a "real-terms increase", as promised by David Cameron for the health service? It means more than the general increase in prices, more than inflation. |
| More of us use the NHS now | More of us use the NHS now |
| How much more? Double the health budget? Or one penny more than inflation? It could be either. The increases in health spending will be "less than we've been used to", Mr Cameron says. | How much more? Double the health budget? Or one penny more than inflation? It could be either. The increases in health spending will be "less than we've been used to", Mr Cameron says. |
| So all other things being equal, "real-terms increase" could mean no practical increase at all in the quantity of service delivered. | So all other things being equal, "real-terms increase" could mean no practical increase at all in the quantity of service delivered. |
| At least it means no cuts, doesn't it? That much is certain. | At least it means no cuts, doesn't it? That much is certain. |
| Except that ever since the NHS came into being, more people have used it, partly because there are more people, mostly because people use the NHS more often for more treatments. Last year, for example, the number of patient episodes in NHS hospitals increased by about 4%. | Except that ever since the NHS came into being, more people have used it, partly because there are more people, mostly because people use the NHS more often for more treatments. Last year, for example, the number of patient episodes in NHS hospitals increased by about 4%. |
| So "real terms increase" might mean virtually the same amount of money - but for more patients; in other words, a real terms cut per head. That might be appropriate in the circumstances - let's not get into that - but not perhaps what some expect from the rhetoric. For example, Mr Cameron was interpreted by the Daily Telegraph columnist Simon Heffer last week as "promising to throw money at the problem". | So "real terms increase" might mean virtually the same amount of money - but for more patients; in other words, a real terms cut per head. That might be appropriate in the circumstances - let's not get into that - but not perhaps what some expect from the rhetoric. For example, Mr Cameron was interpreted by the Daily Telegraph columnist Simon Heffer last week as "promising to throw money at the problem". |
| So many possibilities - from so few words. What would "real terms increase" for health really mean? Suggestions welcome. | So many possibilities - from so few words. What would "real terms increase" for health really mean? Suggestions welcome. |
| 2. CUTTING DEFICIT BY HALF BY 2014 | 2. CUTTING DEFICIT BY HALF BY 2014 |
| The now famous £178 billion deficit is the gap between what the government expects to spend and collect this financial year. Labour promises to halve it by 2014, a reasonable starting point, says Vince Cable of the Lib Dems. | The now famous £178 billion deficit is the gap between what the government expects to spend and collect this financial year. Labour promises to halve it by 2014, a reasonable starting point, says Vince Cable of the Lib Dems. |
| What does that amount to? | What does that amount to? |
| Jobs can come and go and come again | Jobs can come and go and come again |
| Very roughly, half the deficit has been caused by the recession, by the Treasury's own estimate. Tax receipts have fallen and the costs of unemployment risen. To fix this half involves, above all, recovery from recession. | Very roughly, half the deficit has been caused by the recession, by the Treasury's own estimate. Tax receipts have fallen and the costs of unemployment risen. To fix this half involves, above all, recovery from recession. |
| Is that a big challenge? In four years? Hardly. It would be stupefying if there were not an end to the recession in time to recover lost growth over the next four years. That is what happens in the economic cycle - a phenomenon resistant to governments everywhere. | Is that a big challenge? In four years? Hardly. It would be stupefying if there were not an end to the recession in time to recover lost growth over the next four years. That is what happens in the economic cycle - a phenomenon resistant to governments everywhere. |
| Thus the great bulk of the heroic endeavour required to halve the deficit by 2014 will be achieved simply as the economy recovers, tax receipts revive on the tails of increased business, and unemployment comes under control. It's not the first half of the deficit that's the real problem. It's the rest. | Thus the great bulk of the heroic endeavour required to halve the deficit by 2014 will be achieved simply as the economy recovers, tax receipts revive on the tails of increased business, and unemployment comes under control. It's not the first half of the deficit that's the real problem. It's the rest. |
| The translation of this commitment? That we expect the economic cycle - with us for as long as modern economic history - to continue. Meanwhile, the hard part of the problem must wait. | The translation of this commitment? That we expect the economic cycle - with us for as long as modern economic history - to continue. Meanwhile, the hard part of the problem must wait. |
| 3. WE/THEY HAVE INVESTED/WASTED RECORD SPENDING | 3. WE/THEY HAVE INVESTED/WASTED RECORD SPENDING |
| Here's a game anyone can play. Find the last prime minister who did not at some point boast of record spending. | Here's a game anyone can play. Find the last prime minister who did not at some point boast of record spending. |
| Education, education, education | Education, education, education |
| Mrs Thatcher did. So, of course, did New Labour. Spending almost always hits records, just like the box office records set at the cinema. This is partly inflation, partly economic growth. When societies are richer - and the UK as a whole is four times richer per head than at the end of the war - they spend more. All post-war prime ministers have set cash records for spending, taxing, even debt. | Mrs Thatcher did. So, of course, did New Labour. Spending almost always hits records, just like the box office records set at the cinema. This is partly inflation, partly economic growth. When societies are richer - and the UK as a whole is four times richer per head than at the end of the war - they spend more. All post-war prime ministers have set cash records for spending, taxing, even debt. |
| What matters is not that the number of pounds goes up, but how fast, given inflation, the size of the economy and the relevant population. | What matters is not that the number of pounds goes up, but how fast, given inflation, the size of the economy and the relevant population. |
| Labour's Ed Balls, the Education Secretary, said last week that education spending would rise year on year, a promise vague about both pupil numbers and inflation. Since the war, rising education spending in cash, for each pupil, has been far more common than not. | Labour's Ed Balls, the Education Secretary, said last week that education spending would rise year on year, a promise vague about both pupil numbers and inflation. Since the war, rising education spending in cash, for each pupil, has been far more common than not. |
| So to Nick Clegg of the Liberal Democrats, who said recently that you can't make progress as a society unless every generation tries to do better for its children, we might ask, when was the last generation that didn't? | So to Nick Clegg of the Liberal Democrats, who said recently that you can't make progress as a society unless every generation tries to do better for its children, we might ask, when was the last generation that didn't? |
| 4. BETTER TIMES AHEAD | 4. BETTER TIMES AHEAD |
| Some variety of the promise that people's living standards will rise crops up in most elections. In 2005 it was one of Tony Blair's: "Your family better off," he said. | Some variety of the promise that people's living standards will rise crops up in most elections. In 2005 it was one of Tony Blair's: "Your family better off," he said. |
| Things can only get... better? | Things can only get... better? |
| How they measure "your family" or "the typical hardworking family" or whatever, tends to remain woolly. But let's use GDP per head as a rough but simple indication of national and "family" prosperity. By that standard, how often have governments since the war left their populations poorer than when they came to power? | How they measure "your family" or "the typical hardworking family" or whatever, tends to remain woolly. But let's use GDP per head as a rough but simple indication of national and "family" prosperity. By that standard, how often have governments since the war left their populations poorer than when they came to power? |
| Never. It hasn't happened, yet. Though this government will be close - because of the recession, it will leave the country very close to the level of GDP per head that it had in 2005. | Never. It hasn't happened, yet. Though this government will be close - because of the recession, it will leave the country very close to the level of GDP per head that it had in 2005. |
| Since the economy is now in a trough, some improvement seems likely. It would be catastrophic if living standards fell from here over the next five years. So any promise that things will get better might be said to be no more than: "we promise not to be the worst government in living memory". | Since the economy is now in a trough, some improvement seems likely. It would be catastrophic if living standards fell from here over the next five years. So any promise that things will get better might be said to be no more than: "we promise not to be the worst government in living memory". |
| I think they would call that managing expectations. | I think they would call that managing expectations. |
| A selection of your comments appears below. | |
| 'Real-terms increase' can most definitely mean cuts in absolute (nominal) terms if inflation is negative. ie Inflation is -1.0, NHS spending could be cut by 0.5%. That is still a 'real-terms increase'. Dan H, Kent | |
| Just when I think all sanity has left the world Michael Blastland cuts through the rhetoric and reveals truth while bringing a smile to my face and reminding me why I studied Economics in the first place. Lapsed Economist Grad, Cambridge, UK | |
| why can't they tell us what they really mean to do ie spending cuts and tax increases. We are all sensible enough to realise that if you have spent too much you must make more money and spend less to balance the books. That is what all earning households do. The welfare state does need to rethink what it offers because the tax paying hard working self employed are getting fed up of supporting everybody else.Colin Scott | |
| Excellent article; It is a sad result of party politics that our leaders will not admit "things ain't as good as you might want them to be". I suspect that none of us (the electorate) really understand electoral promises ... we are sold by how well they are packaged and delivered to us. Which leads me to the conclusion that none of us really understand what we are voting for ...John Tarling, Havant UK | |
| All this rides upon the assumption of infinite growth in a finite world. Surely now is the time to move away from an economic system that is not based on this reckless assumption? Increased GDP does not equal improved wellbeing of the population however it does mean more money for the bankers and bureaucrat who caused the recession in the first place. Jethro George Gauld (Uni. Sussex Ecology student), Brighton | |
| "So to Nick Clegg of the Liberal Democrats, who said recently that you can't make progress as a society unless every generation tries to do better for its children, we might ask, when was the last generation that didn't?" That's an easy one. Over the past decade older generations have swindled the younger through house price inflation - the biggest inter-generational transfer of wealth in history. While baby-boomers and homeowners enjoy the fine life paid for with their 'mortgage equity withdrawals', prospective first time buyers ponder how they will ever get on to the housing ladder - which has been pulled up out of their grasp...Roy, London, UK | |
| What about "investment"? Always used to mean expenditure on goods that generated a return over more than one year ie offices, plant and machinery, factories etc, under Mr Brown this now seems to mean any expenditure whether it generates a return or not, ie wages, consultants fees etc, thereby avoiding having to say we are increasing spending and pouring your money down the drain?Andrew Ryland, London | |
| Number 2 would require both a recovery in revenues and fixed or near fixed spending. For governments to have better revenues and not to be seen spending it could be difficult politically. If half the deficit was caused by the recession and everything else stays the same then the government deficit will fall by £89bn. However this assumes this money is not budgeted for something else. In 2007 the total NHS budget was £90bn.Nathanael Huen, Bath |