Billions Here, Billions There
A Facebook post from the ‘PigGate2’ page suggests that Theresa May’s government spent vast amounts of taxpayer money on bailing out banks and nuclear weapons, but is refusing to spend more money on the National Health Service.
This is misleading, both in terms of the estimates given and their meaning. The post was shared over 6.5k times.
We should “get angry” about statistical misrepresentation, and falsehoods with figures.
£840bn for “bailing out bank fraudsters!”: The Labour government, under Gordon Brown, gave numerous guarantees. This was not money spent.
Over £200bn on “nuclear warheads”: This was a non-comparable estimate from the Campaign for Nuclear Disarmament. The Ministry of Defence prices new submarines at £31bn, with operating costs of £2bn per year.
“We don’t have that kind of cash!”: Theresa May’s government has proposed spending £20bn more on the NHS by 2023/24.
State Support during the 2008 Financial Crisis
Let’s take each panel in turn.
We spent 840 billion pounds of YOUR money bailing out bank fraudsters!
The Labour government, led by Gordon Brown, undertook a series of interventions in the UK financial sector, seeking financial stability.
This support included guarantees and indemnities: asset protection scheme (£280bn), credit guarantee scheme (£250bn), and the special liquidity scheme (£200bn).
This was not money “spent”, but the value of assets guaranteed.
Direct Treasury investment into UK banks was somewhat smaller, cited as £124bn in the second National Audit Office report published in December 2010.
This money was principally in the purchase of shares, which were then later to be sold. It was suggested by the Conservative government in 2015 that sales of shares would create a net surplus.
However, once the debt interest is accounted for, it may have ended up being a small loss.
Now we’re going to spend over 200 billion pounds of YOUR money on nuclear warheads!
As Full Fact state:
Replacing the current class of nuclear submarines is expected to cost £31 billion. Another £10 billion has been put aside to cover any extra costs or spending over the estimate.
That is the figure for new submarines, with the annual operating costs expected to be around £2bn per year (5% to 6% of the overall defence budget).
The Trident programme has a high cost, and a Ministry of Defence underestimate is possible.
NHS Spending Proposals
This Conservative government, with Theresa May as Prime Minister, has pledged to increase NHS spending by £20bn in 2023/24 (relative to the current year), in real terms (accounting for inflation).
This is under the long-run average of annual increases in health spending, but is above annual rates since 2010.
Misleading people is by no means partisan.
Making estimates erroneously and tendentiously bigger to bolster political arguments is, unfortunately, too common.