If only Cameron paid heed to his own advice

The former Prime Minister was right – those that oppose austerity are being selfish. But given that public debt is higher than when he entered Downing Street, why didn’t he take his own advice?

David Cameron re-entered the debate on public spending this week by saying:

“The opponents of so-called austerity couch their arguments in a way that make them sound generous and compassionate.

“They seek to paint the supporters of sound finances as selfish, or uncaring. The exact reverse is true.”

“Giving up on sound finances isn’t being generous, it’s being selfish: spending money today that you may need tomorrow.”

The thing is, he’s right: opponents of ‘so-called austerity’ do couch their arguments in a way that makes them sound generous and compassionate, but those who support sound finances are, in fact, the generous ones. Also, those that knock austerity, I might add, promise the world knowing that they will never be able to deliver, whilst those that support sound finances live in the real world where debts have to be paid and there isn’t an endless money tree.

However, Cameron was also right to call it ‘so-called austerity’ –  and he should know why.

This is because, when Prime Minister, first his coalition government and then his majority Conservative government spent more than it could raise in tax – all the while talking about “austerity”. Admittedly, deficits were reduced but his government still missed the targets that they set themselves with regards to balancing the books.

First the public purse was to have a surplus by 20015, then by 2017, then it was 2020. Despite reducing the deficit as a percentage of the UK’s overall GDP, the numbers were still staggering.

Indeed, despite lofty promises to balance the budget by 2015 from the then Chancellor of the Exchequer, George Osborne, according to the ONS the UK public sector deficit remained at over £100bn in 2014 and £81bn in 2015.

This accumulated spending has meant that the debt burden stood at over 1,650,000,000,000 – £1.65 trillion – when Cameron left Number 10. This, compared with what the debt stood at when he entered, means that his government added nearly £600,000,000,000 – £600 billion – to the national debt.

Of course, Cameron would be entitled to point to the reductions in the yearly deficit. He would be right to say that the deficit was halved in percentage and cash terms from 2009/2010 to 2015/16. However, this ‘so-called austerity’ means that in both cash and percentage terms, our debt has grown – and continues to grow. In 2009/10 it stood at 70.3 per cent of GDP. It now stands at over 87 per cent.

This has three immediate real world effects:

  1. Public sector pay caps, put in place due to the financial crisis, are still in place;

  2. The UK is increasingly vulnerable if / when there’s a financial shock and it needs to pay off its debts;

  3. The government can do less in way of public sector investment. This, of course, didn’t stop Cameron from spending £billions on HS2. Nonetheless, as a result of our indebtedness, future governments are unable to even think of making sensible spending plans.

It should though be noted that the sustained deficit and the growing debt has had another effect: intergenerational debt. Now, because of the spending policies of New Labour, the Coalition and the previous Conservative government, the total UK debt according to the Taxpayers’ Alliance is the equivalent to £65,699 per household and, worryingly, £129,704 for every child. In 2009, David Cameron claimed that new babies were born with £17,000. Now it is far, far larger.

This isn’t just worrying for the obvious financial reason, it is obvious for the blatant immorality that this debt burden represents for future generations.  Of course, it seems that David Cameron out of office realises this. It’s a shame that he didn’t recognise it when he and his team were in power.

3.82 avg. rating (77% score) - 17 votes
Rory Broomfield
Rory Broomfield

Rory Broomfield is Director of The Freedom Association and the Better Off Out campaign. He is an authority on the EU and has written a number of books including his latest, co-authored with Iain Murray, Cutting the Gordian Knot: A Roadmap for British Exit from the European Union. He has previously worked in the City of London and in Westminster for a number of Members of Parliament, including the current Prime Minister, Theresa May; the current Chairman of the 1922 Committee, Graham Brady; and Sir Richard Shepherd.

  • Spinmeister

    The young, who have never experienced the financial nuclear-winter after a left wing government, then blame the Tories for being sensible and trying to sort it. Rinse and repeat.

  • Jethro Asquith

    Are all your cartoons crap?

  • Leo Savantt

    When recent and present governments’ profligacy is labeled as austerity one wonders whether or not huge parts of the population have not completely lost their marbles. 40 billion a year, at today’s unsustainable low interest rates and rising, to service government indebtedness. A debt which continues to rise at over 5,000 GBP per second.

  • getahead

    So why didn’t May dump this white elephant? Who is pulling her strings?

  • getahead

    Governments seem to be terrified of reducing the size of the public sector. Picking the easy targets like the armed forces and the police force is cowardice.

  • Derek

    This unacknowledged elephant in the room is due to rising unfunded liabilities. In turn these are due to ageing demographics which will continue to worsen until 2050 and beyond. This is a very long term structural problem, Hence debt continues to rise even with cuts. It’s reckoned to take a primary surplus of about 3% for 20 years to pull debt down to 40%.
    I can’t see never-ending cuts to match ever-rising liabilities can be sold politically to the public for the long term. It’s negative politics in the long term.
    Rising taxation cannot work either because this has to fall on a declining workforce paying for a burgeoning number of aged.

    Debt dumping on the smaller working future generations has to stop as do Government projects that use voters money to only create returns for companies rather than for the public.
    Hospital PFIs mean that services cost 2-3 times as much. This has a negative effect on the finances of the public reducing growth and dumps debt on their children on top.

    Where is the relevance of HS2 to the future UK economy? By the 2030’s driverless vehicles will be taking over for the movement of goods and people.
    Rail is incredibly expensive and incredibly totally inflexible for future changes. See https://iea.org.uk/in-the-media/media-coverage/hs2-is-a-gamble-with-taxpayers-money
    But Mark Littlewood, director general of the Institute of Economic Affairs, told the BBC: “Any private investor would consider this to be a
    colossal waste of money. “That is not to say that we don’t need to improve capacity. Rail is an extraordinarily expensive way of doing that.”

    Road is the multi-link internet for moving goods and people from anywhere to anywhere where each “packet” is a vehicle. The links are shared which is is far more efficient and cost effective. This is exaclty why the internet has taken over from fixed circuits.

    The UK needs government projects where financial accountants can prove there is a strong return back to the economy (say 10%pa) far more than covering lending charges. The returns need to start very quickly rather than like HS2example in the late 2030’s when it will face a very different world dominated by driverless technology.

  • Right of Centre

    You are wrong. I care very much and will always consider whatever he has to say- as I do for anyone who offers their views, including yours Owen.

  • Mike Fowle

    Wouldn’t disagree with this, although I feel the Bank of England’s policy has been pretty disastrous. To be fair, I don’t think much has been actually spent on HS2 even if it is due to be.

  • Billy Lindner

    One of the tragic ironies of this situation is that we are now hearing that the Tories have no chance if they don’t provide ‘affordable housing’ for younger people who now vote overwhelmingly for Labour. Yet any attempt to do so can only be made at the expense of THEIR children–in other words, by increasing public spending, which is merely kicking the can down the road.

    The price of property is now grotesquely inflated because of historically low interest rates and vast increases in money supply–both necessary to finance the massive growth in public sector spending. Asset inflation was the inevitable outcome. Growth in public sector spending has not been accompanied by improved public services, but instead it has been absorbed by adding more layers of management to activities that are already over-managed to a bizarre degree. Almost every problem I’ve had in relation to the NHS–whose front-line personnel are generally superb–can be traced right back to management ‘solutions’ to problems that never existed before.

  • SonofBoudica

    The public sector pay cap is a dishonest illusion. Most in the public sector get annual pay increments as they move up within pay bands. That has given them annual increases in pay of around 4% per annum for the past 9 years.

  • gray cooper

    Because Cameron plain packaged,covered up,tax escalated and funded creepy fake health quangos,I do not support and refuse to vote for any political party. What a clever ex-politician.

  • John M

    The only defecits that were eliminated during the Cameron years were on the bank accounts of Cameron & George Osborne. The rest of us are saddled with the nation’s debt whilst the two of them falute around the globe filling thier pockets making speeches for the Davos brigade.

  • cambridgeelephant

    In a word – Yes ???

  • Frank

    Cameron= millions for the Children’s Society, HS2, Foreign Aid, Hinkley Point, the green scams (£18Bn a year), not closing down Quangos (£28Bn a year), etc, etc. In that context, reducing some disabled person’s allowance y £30 a week seems staggeringly mean.
    Cameron is deeply shallow and yesterday’s man. He should wind his neck in and show some humility for the damage he did to this country.

  • grumpyashell

    Cameron …the heir to Blair…and just as empty…would say/ do anything that would show his liberal credentials,no belief,no fundamental conservative value and he wonders why nobody is interested in what he says. If he says all this now,why did he not instigate it whilst in office…because he does not believe then or now.

  • ale bro

    austerity goes hand in hand with keeping mortgage rates at all time lows, so free money for the rich and everyone else has to whistle for their handouts! except cameron who whistled to the country when he realised that his brexit gamble had spectacularly backfired. i bet cameron’s mortgage rate is less than the 6.5% than students are charged.

  • Owen_Morgan

    Why can’t Cameron accept that his political career is over? He seems to be taking his cue from the even more repellent Barack Obama, who spent about eight years dropping hints that he thought he’d make a great third-term president. I don’t know which political job Cameron imagines remains open to him. Before the Brexit victory, I suppose he saw himself in some idle, but very highly remunerated, sinecure in Brussels, once his occupancy of Number Ten finally came to an end. Well, his insufferable pomposity helped him to lose the referendum, his job and his prospects of lucrative employment by the EU in pretty short order. Good riddance.

    Tough luck, Davy boy. Nobody cares what you think about anything.

  • ethanedwards2002

    Austerity would have much more credibility if it didn’t include hosing vast sums of borrowed cash at Foreign Aid.
    It’s poverty at home. We scrimp and save so you lot can throw our money away into the black hole that is Foreign Aid.
    You might think it makes you politicos look good and virtuous. But it’s our money not yours.
    Our services are cut to the bone while it’s champagne time for the poverty scam industry.

    You waste our cash on climate change boondoggles while our elderly have to fund basic care themselves.
    Frankly you have got your priorities completely wrong.

    You need to put Britain first. Fix our infrastructure. Fund our services. Give our troops what they need when they need it. Not funding Patagonian hamster farmers to have solar powered radios.

    Until you lot understand this you will always lose out to liars and snake oil salesmen like Corbyn.

    That’s my take.

  • IanE

    Well, to be fair, it does seem to be the young who are keenest to grow the debt even faster. Reap what ye sow, as they say!

  • Calvin Graham

    Because he’s a fool who thought that if he only meant it half-heatedly and did some liberal things like not just legalising gay marriage but making it a central policy plank, he’d convince the likes of the BBC and the guardian to like him. Then when it didn’t work, he promised a Brexit Referendum on the assumption that he’d lose, be in another coalition, bring in his buddy Nick Clegg again and have to ‘unfortunately’ abandon the idea as a concession to the Libdems. Once again his judgement of what the UK was thinking was utterly appalling.

    My cartoon on the week

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