What George Osborne used to say about public spending

Like many people I sat by the television yesterday (BBC iPlayer, actually) and watched the chancellor’s comprehensive spending review and witnessed the procession of cuts roll off the his tongue like a particularly grim reading of the shipping forecast.

Afterwards, my mood was mollified a little by a spirited response from Alan Johnson, who did well in his debut appearence as shadow chancellor. Of course there was a muchof the pantomime to the whole affair, there often is in parliament, leading one of my former students (@andywillets) to tweet that he found Johnson’s performance laughable. I admit I was amused by his rather withering rejection of Osbornomics, but there was a seriousness behind the left-pleasing rhetoric.

The crucial phase, for me, was Johnson’s referral to the previous spending review of 2007. Johnson tried to turn Osborne’s own words, when he was shadow chancellor, against him. “Read your Hansard“, he said. And so the morning, I did.

First, this is what Johnson said yesterday.

I have read his [Osborne’s] contribution to the debate. First, instead of arguing for reduced public spending, he argued that we were spending too little. He complained that we were slowing the growth in health and education expenditure … In 2007, far from calling for regulation of the banks, the Conservatives were calling for deregulation of the banks.

It took a bit of digging, but here is what Osborne actually said during the debate of the previous spending review. To be fair to him, he does warn that Alistair Darling, his Labour predecessor, has failed to create a surplus during the long boom years. But then he actually calls for more – not less – government spending on health and eduction.

Here’s what Osborne actually said:

I might try that again: where has all the money gone in health? Why does not the Chancellor be honest with the public about what this health settlement means? The growth of health spending is set almost to halve in the next three years, so a health service that is already seeing maternity wards closing, accident and emergency wings shutting and staggered pay awards for nurses will now have to make do with a much slower rate of spending growth. It would have been able to cope better if the recent spending boom had been matched by reform.

The second charge – that Osborne was calling for further bank deregulation – isn’t in the Hansard archive. Osborne might well have called for a further deregulation of the banking system in 2007, but he did not say so immediately after the previous spending review.

The point about spending matters because the Tories are peddling the idea – I call it a myth – that Labour was reckless with public spending prior to the collapse of the banks. It is frequently said by Osborne and others that public services became bloated by too much public money under Labour. Yet in 2007 here is the proof that they were actually complaining that Labour was not spending enough.

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