Unless you (or the government) wants to claim either a) the Torys weren't planning larger spending cuts than Labour, or b) that the fiscal multiplier in the UK is currently less than 0 (The Conservatives own calculations had it at around 0.5) then it is inescapable that growth would've been higher under Labour than the Conservatives. The only issue is how much higher would it have been.

Using the targets set out in Darling and Osborne's 2010 budgets (I assume steady pace of deficit reduction - both were ever so slightly back loaded), I calculate that in the 4 fiscal years from 2010/2011 - 2013/2014 the Tory were going to make cumulative net cuts (relative to Darling's plan) of 6.4% of (April 2010) GDP.

According to Oliver Blanchard (chief economist to the IMF, [url=http://www.imf.org/external/pubs/ft/wp/2013/wp1301.pdfhere[/url) a 1% cut in public spending (in developed economies since 2010) directly leads to about a 1% drop in GDP. Therefore the Conservatives extra 6.4% of cuts would result in lower economic growth of about 1.6% for each of these four years. It thus seems reasonable to assume that instead of the Conservatives' slightly better than flat growth, we would be having around 2% growth under Labour.

ps. This only adjusts growth cuts under the Conservatives, for the extra growth due to Labour 'stimulus' (i.e. not as many cuts), so don't say it doesn't take into account things such as the Eurozone crisis and the slower than Darling expected global recovery, because it already does.

...and presumably Osborne is aware of all this ?

...and continuing with the presumptions he is now either stuck on a runaway train, has no plan b, or is cutting budgets as a deliberate political exercise with no care to the outcome ?

Osborne has no plan b. His plan is to use the failure of plan a, to claim there is no alternative.

Whenever he is confronted with evidence of economic failure he says "that shows it is even more important that we aren't diverted from the path".

Watch for this line to come out when the UK loses its AAA credit rating, that Osborne clings on to as evidence of his great performance at making the markets have 'credibility' in his plan.

I would like to think the Chancellor and his team spend more time reading about the consequences of deficit reduction than I do, so I would hope so.

I think that the Tories have invested way too much political capital in deficit reduction. If they were to be honest and say: 'We - like the IMF and other respected bodies, hugely underestimated the negative effects of deficit reduction during this period of economic trouble. If we had not cut so far so fast, we wouldn't have entered into a double dip recession (which has lead us to borrow even more than in Alastair Darling's plan). We're going to go for plan B' they would be absolutely wiped out at the next election.

I don't think political expediency is the only reason though. The Conservatives like to cut the state whenever they can. I think they would've made cuts for ideological reasons anyway, the recession has only gave them a good excuse to go further than they otherwise would've been able to get away with.

[url=http://www.bbc.co.uk/news/business-20989050One new pension for everyone – no means-tested add-ons.[/url

Interesting to see that the government now believes in universal benefits.

And in principle this is a good idea.

However it's tied to an increase n the pension age to (eventually) 68 and having to pay NI for 35 years instead of 30.

I think having to work in manual jobs until you are 68 is going to result in a sufficient cull of the population to make it affordable!

Also not sure how IDS sells it as good for women who take time off for child care because your national insurance is credited for time off looking after kids up to the age of 12.

I also wouldn't trust IDS as far as I could throw him so there is bound to be some small print somewhere that results in more people losing out than predicted. The devil will be in the detail in this one.

The point is the government encourages the inherently selfish attitude by playing different sections of society off against each other.



I have no idea how they justified it and I certainly wasn't pleased when they did it because it seemed obvious to me the fees would only go one way. Up. However how Labour justified it does not excuse Willets from his deliberately disingenuous and deliberately divisive comments.

Only those who have never had to live under a previous tory administration, or who wear glasses with such a blue tint that they can't see what's in front of them, will believe that when tories tell us we'll all be better off, that's what will happen.

The rest of us realise that when tories tell us "we'll all be better off", then that's the time to stock up on KY jelly and make the shafting we are about to receive as bearable as possible

Personally I support an increase in the pension age and I would go further than 68. Really the whole issue about 'sustainability' hinges around pensions, principally the state pension.

The government likes to go on about us spending beyond our means, but its not health, education or benefits spending that is unsustainable, its not even public sector pensions, those are sustainable too - its the long term impact of pensions that is the killer. The Office for Budget Responsibility figures show this - its their 50 year projections that are based on no change in public policy, that show us in dire straits, not the short term ones. If you increase the pension age to reflect increasing longevity then that has more impact on making the public finances sustainable than anything else.

It's politically difficult, but I think we could get people onside if we said you have to accept a state pension age of 72 or 75, but we can afford to spend on good healthcare, good education, good transport networks, the things that will promote growth anyway. That doesn't mean you have to wait till 72 or 75 to retire, just thats when the state pension kicks in so if you want to retire earlier you will have to pay higher contributions yourself to a private scheme.

Yet at the same time, we have record levels of youth employment.

Aye: I can see how making people retire even later makes sense.

We don't have record levels of youth employment because older workers are taking their jobs.

Older workers are a different part of the labour market. Young workers are people with little work experience and they don't compete for the same jobs as older workers.