A month before the election Manchester University’s Colin Talbot pleaded with the future government not to use the old it’s-worse-than-we-thought trick.
I suspect that anyone who has been around for as long as Professor Talbot would know deep down that his plea would be ignored. There’s a certain inevitability about the time-worn it’s-worse-than-we-thought trick. Sure enough, David Cameron rolled it out in his speech this morning. He even used the exact phrase:
[T]he overall scale of the problem is even worse than we thought.
There is no excuse for making such a claim. Most government spending figures are now in the public domain. OK, some number-crunching might be required to make sense of the data but the uber-geeks at the Institute for Fiscal Studies and other such think-tanks do all that and make their calculations public. As a result, even a bungling amateur like me can get a rough idea about the state of the UK’s finances.
I was going to say that the predicted £70bn in debt interest payments by 2015, that Mr Cameron claims has given him such a shock, was in an IFS report (See page 18) and was widely discussed in the press earlier this year, but the Telegraph’s Edmund Conway beat me to it. As he points out, if anything, the figures for government debt are slightly better than we thought they were going to be a few months ago:
For one thing, the latest public finances numbers show that Britain’s deficit last year was actually considerably lower than previously calculated. For another, the interest rate on the average 10-year gilt has actually fallen considerably since the eurozone economic crisis took hold.
Perhaps David Cameron is simply trying to emphasise how bad things are so he can justify his forthcoming cuts. However, too much panic-stricken language could backfire. As Colin Talbot warned:
[T]o say “its worse than we thought” in the current febrile European and international financial climate would be a disaster. The financial markets are being irrational enough without giving them more cause to be paranoid.
David Cameron had great fun being Private Frazer when in opposition, using his predictions of economic doom to undermine the government. But now Mr Cameron is the captain and he needs to keep a cool head. Talk of the economy being even worse than we thought is the rhetoric of opposition. More sober and level-headed language is called for now.