Labour governments borrow less and repay more
Received wisdom says that Labour governments borrow more and repay less when in office, and the Tories borrow less and repay more. This “fact” has been repeated so regularly over the decades by both Tory politicians and in the media to an extent that it is cemented in our national psyche. Accountant and economist Richard Murphy looks back over the last 70 years of government borrowing statistics to see if it really is true. The results are surprising.
Richard’s analysis starts immediately after World War 2, so it includes the late 1940s and early 1950s post-war recovery when defence spending was unavoidably high. It runs up to 2016, encompassing 28 years of Labour government and 42 years of Conservative government (including the 2010-2015 coalition) . It shows that, on all counts, Labour governments borrow less and repay more of the national debt than Conservative governments.
Labour borrowed £26.8 billion per year in office, while the Tories borrowed £33.5 billion. So much for Labour being a party of high government borrowing.
Labour have repayed £108.8 billion of the national debt, while the Tories have repayed £19.9 billion. This is despite Labour being in power for only two-thirds of the time the Tories have been in power. So much for Labour “not fixing the roof when the sun shone”.
(All figures are adjusted to 2014 prices to make the analysis fair)
So what do we learn? Two essential things, I suggest. First, Labour invariably borrows less than the Conservatives. The data always shows that. And second, Labour has always repaid debt more often than the Conservatives, and has always repaid more debt, on average. The trend does not vary however you do the data.
So the next time you hear that old myth “you can’t trust Labour with the economy”, remember the facts.