FactCheck: Harman vs Hague
Updated on 08 July 2009
The deputies stood in at prime minister's questions this week, and clashed over public spending. Who got the numbers right?
The claim
Gordon Brown and David Cameron have argued repeatedly about public spending patterns at recent PMQs. Today, Harriet Harman and William Hague took up the fight.
"Isn't the point that capital spending is being halved an absolutely indisputable fact?"
William Hague, prime minister's questions, 8 July 2009
"You know full well the reason for the figures is because we are bringing forward capital spending. We are not cutting capital spending, we have increased it and we are bringing it forward."
Harriet Harman, prime minister's questions, 8 July 2009
The analysis
We looked at a very similar claim from Brown last week at PMQs - and it just doesn't stand up. The government has brought some investment spending forward to help combat the recession - meaning that capital spending in the current financial year will be far higher than it was expected to be in the 2008 budget.
But the total capital spending planned (in cash terms) from 2008-13 is now £11bn less than was planned for the same period in the 2008 budget.
If we measure things as a proportion of the national income, investment spending is set to peak at more than 3 per cent of GDP in the current financial year. But after 2013, it is expected to stabilise at just 1.3 per cent of GDP. This is a dramatic drop - 60 per cent - from the 2.3 per cent of GDP at which investment spending was planned to stabilise in the 2007 comprehensive spending review, before the financial crisis hit.
The claim
"While we are investing in bringing forward that capital investment, the Conservatives would pull the plug on the public sector, just as the private sector is struggling."
Harriet Harman, prime minister's questions, 8 July 2009
The analysis
Hard to say exactly without a concrete manifesto from the Tories, but the party has opposed Labour's fiscal stimulus package. And in January this year, David Cameron announced plans to cut public spending from April 2009, while the country is still in recession, by around £5bn in order to fund a tax cut for pensioners and savers.
In contrast, Labour has increased investment spending now and unleashed a big programme of tax cuts, in an attempt to kickstart the economy and make the recession less severe.
The claim
"Now capital spending is being cut. Total spending is being cut. Departmental spending is set to be cut. Those are the Government's own plans."
William Hague, prime minister's questions, 8 July 2009
The analysis
Afraid so - from 2010 capital spending is set to fall (although some of this fall is because spending has been brought forward - see above). Total spending will rise in cash terms - but it has been doing for the past 60 years. When inflation is taken into account, we see a real-terms cut in total public spending.
And the IFS has calculated that, when spending on benefits and debt interest is taken into account, the fall in departmental spending (ie spending on public services) will be even more pronounced - around 7 per cent over three years from 2011.
The claim
"We have paid down debt - so that we have the second lowest debt in the G7."
Harriet Harman, prime minister's questions, 8 July 2009
The analysis
The UK did go into the downturn with the second lowest debt (as a proportion of national income) in the G7: only Canada had a lower debt ratio in 2007. But our position looks less favourable when compared to a larger league table of industrialised countries, rather than just seven of the world's biggest economies.
The UK's debt was the 11th highest out of the 28 countries the OECD has data for - putting us well over halfway down the league table.
We've looked at Labour's record on debt before: although politicians have been known to bend the figures, Harman's correct to say that Labour paid it down. Pre-credit crunch, the national debt was still comfortably lower than when Labour came to power.
That said, the balance sheet now looks very different, with the country set only to plunge deeper and deeper into the red (more on that here .
The sources
Budget 2009
IFS budget analysis
IFS observation: chronic underinvestment?
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