Posts Tagged ‘Deficit’

Labour was Profligate

May 1, 2015


(Click the chart for an unfuzzy version)

The New Stateman, Paul Krugman and FT Alphaville have recently given credence to the notion that Labour were fiscally responsible going into the financial crisis.

While Finland and Denmark were achieving a surplus amounting to 5% of GDP in 2007 the UK ran a deficit of 3%. The difference 8% of GDP makes is huge. The UK’s GDP was £1,732 billion in 2014, 8% of that is £138.5 billion. When a politician or economist uses a low percentage you can be sure it’s a gargantuan number.

Sweden, Germany, the Netherlands, Luxembourg, Belgium, Estonia, Ireland, Cyprus and Spain along with Finland and Denmark had surpluses in 2007. With the exception of Germany and Cyprus they all ran surpluses in 2006 too when the UK had a deficit of 2.9%.

The United Kingdom’s descent from fiscal Europa League contender to QPR-like also-ran was complete just in time for the recession. While Portugal matched the UK’s 3% deficit going into the financial crisis only Hungary had a worse deficit than Labour’s Britain. Hungary.

Pedants corner: these figures are based on Maastricht criteria so are marginally less favourable to the UK than the UK government’s preferred figures. Also, the chart says EU countries but data from the non-EU Norway is included over the past four years – I have no idea why Eurostat has them in this dataset .