How do you explain what a “zero per cent rise” is? Michael Ellam, Brown’s outgoing press secretary, had this task earlier today and I went along to the lobby to hear him. His answer hints at what I suspect will be an almighty U-turn from the government on cuts. Brown was “interrupted” he said – he meant to say 0.7% but was cut off after zero. As if. When it was pointed out to him that Brown said “zero percent rise in 2013/14,” and wasn’t interrupted at all, Ellam basically admitted that Brown misspoke and apparently corrected himself in his next sentence by saying he was referring to 0.7% growth in current (as opposed to capital) spending. But what Ellam said next really caught my attention.
Spending totals, Ellam said, have only been set out until 2010/11. Untrue, I told him, Brown stood up in the Commons two weeks ago and read out spending totals until 2013/14. Those numbers have since come to haunt Brown because they spell a real-terms cut. He can’t un-say those figures and, anyway, you can work them out from Budget 2009. So how does he get out of it? Anyone with a calculator knows that these figures go down after inflation, and by 7% once you factor in debt interest and dole etc. Here’s a reminder, from a table I never tire of publishing:
So how do you rub that out? Comrade Ellam has a plan. The figures to 2010/11 are firm, and described as an ‘envelope’. But after that, the figures are apparently not firm. They are not in the ‘envelope’ but instead they are ‘projections’ and are liable to be revised in the Pre-Budget Report. This is new – and, I suspect, this is Mandelson. The Prince knows that Cameron’s attack – “Tory truth v Labour lies” – is working, that people can work out that Brown is lying. The Prince knows Brown has to stop claiming spending will rise after the election, because now every interviewer in the land is ready to say “that’s a big fat lie”. So Brown must now back away from those figures (above) that show spending falling.
As a result, I believe the government is in the process of rubbishing its own estimates, now that they have become a political liability. The Spending Review was cancelled on the premise that you can’t peer so far into the future. That didn’t stop Brown in 1998, 2000, 2002 and 2004. If we are not to take the Budget seriously, will someone please inform the debt markets? I asked Ellam this afternoon if we are supposed to take seriously the spending totals which Brown read out for those years in the Commons. He didn’t (directly) answer. He has been told to say that the first year of the above table is firm – an “envelope” and the rest are somehow not so firm. This undermines the credibility of everything the Budget forecasts, after the next financial year.
Keep your eyes on this, because we could have a new distinction. Soon we’ll be told that Brown misspoke in the Commons when he listed those spending totals, and in fact they’re not spending totals at all. In fact, those Labour cuts – he’ll say – were all imaginary. The problem for Brown is that he can’t change anything until the Pre-Budget Report. And, by then, everyone will have stopped listening.
P.S. I can understand CoffeeHouser’s suspicion but word “envelope” does have a specific meaning in Treasury parlance, and Ellam is quite a straight-batting type, very much a creature of the Treasury (to whence he’s returning). I suspect Ellam’s weakness here is accuracy, rather than spin. The Budget before a Spending Review (SR) sets out what the total spending “envelope” will be and then the SR divvies it up, saying who gets what. Ellam means to say the ‘projections’ are not considered ‘envelope’ until they are used for the purposes of a SR – so until then, they’re still written in pencil, not ink. It’s a rather pedantic point, though. I’d argue that Brown set out his “envelope” to 2013/14 in PMQs when he told MPs what the spending total would be – spelling out what was in Budget 09 and teeing us up for a SR that has now been cancelled. Brown can’t now back-peddle (sic) and then say those figures are not to be taken seriously once he finds out that they’ve landed you in trouble. I may be wrong, but I do think No10 is preparing to tear up those figures Brown read out, and replace them with ones which go slightly up rather than slightly down. As if that will make a difference!
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