Richard North, 27/06/2013  

000a Mail 027-wel.jpgI had a very exasperated personage ask me that, the other day. And, if an answer was needed, all you need to do is look at today's Daily Mail. It's front-page headlines have Mr Osborne taking "an axe to the state", declaring "war on welfare Britain" and slashing "£11.5 billion from the State".

Yet, inside the pages of the very same newspaper, we have Stephen Glover writing under the headline: "State spending is not being cut". But, being a loyal (and remunerated) Mail writer, he doesn't mention his own newspaper's front page. Instead, he takes a pop at the BBC for its claims.

There is good reason for having a go at the BBC. The outpouring of the "cuts" propaganda from the State Broadcaster has been quite outrageous. And nowhere has it pointed out that, at the end of all Mr Osborne's "cutting", the Coalition will be spending almost exactly the same as it did when it took office.

Says Glover, in 2009-2010 (Labour's last year in power), public expenditure was £671 billion. In 2015-16, according to the Chancellor's figures yesterday, it will be £745 billion. Adjusted for inflation, this represents a real cut of around one percent. In effect, spending has been held level. It hasn't been reduced.

But then, it isn't just the BBC getting it wrong. The entire legacy media is at it. Mr Osborne's spending review, with its £11.5 billion "cuts", is not due to take effect until 2015. This represents roughly one month's government borrowing at the current rate. Even by 2015, the annual deficit is planned to remain at £96 billion, representing an addition to the £1.2 trillion debt we have already incurred.

This is where the propaganda is at its most wicked. When the commentators so happily chirp about cutting the deficit, they are not talking about cutting debt – merely, the government is cutting the rate at which the debt is increasing.

Currently, the interest on that debt exceeds defence spending, and falls not far short of our entire education budget. Per household, this works out at £1,800 each - more than the average Council Tax. 

What is actually happening to public finances, therefore, is that spending is being cut, but redistributed, from front-line spending, to debt financing and to unfunded liabilities such as PFI and public sector pensions. By 2016, it is estimated that the annual cost of providing public service pensions will be over £1,500 per household, and rising rapidly.

Despite this, the media wall remains impenetrable. It does not matter how many times the dissenting voices speak out, even to the extent of Stephen Glover being made a fool of by his own newspaper. The "cuts" meme survives, contradicting the thrust of media copy elsewhere. For a supposedly free society, with an "independent" media, we are living in very strange times.


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