What austerity?

Facts4eu and GB News have recently published charts showing the big increase in government spending in recent years. Here is my take on the numbers and their revealing findings.

In 1996-7, the last year of Conservative government before the Labour landslide win, the UK public sector spent £314.7 bn. (127 page 1997 budget book). By 2010 when Labour left office spending reached £671 bn (260 page 2009 budget book). Annual government borrowing rose from £33 bn to £175 bn.So spending was up 113% in cash terms and borrowing up 430%.

Inflation ran at 27%, so spending was up 86% more than prices.

In 2023-4 spending hit £1190 bn with borrowing at £159 bn, so the Coalition and Conservative governments put up spending by 77% and borrowing down by 9%. Inflation ran at 50% so spending was up 27% more than prices.

Rachel Reeves has put spending up by a further £88 bn this year, with borrowing planned at £118bn but in danger of over running.

So we see this century the public sector got a large real boost in spending power under Labour, helping the financial collapse in 2008-9 when government and private sector borrowing was excessive. It got a further boost under the last government averaging almost 2% a year after allowing for inflation. What austerity?

The truth is the explosion of spending, up 306% since 1997, has not been well spent. Lots has gone on inflated costs, low productivity, and on population growth of 20%. Borrowing has soared , helping drive the inflation higher.

Every year since 2010 we have heard of cuts, and some cuts have been made. Yet overall the surge of spending has been relentlessly upwards , with every public sector budget and body demanding more.

If my income had been as high as £31,000 in 1997 and was now £128,000, a cash increase of 306 %, I would have thought I had done well and could afford a better lifestyle. That is what has happened to the government’s spending multiplied by a million, so why do they not feel better off?