In software cultures there is a well known attack called FUD, which stands for Fear, Uncertainty and Doubt. In absence of facts, you attempt to weaken your opponent by implanting uncertainties and doubts about your opponent in your audience’s mind with the hope that they will speculate themselves all the way to unfavourable conclusions.
A large percentage of the media is very biased against Labour, and if you’ve been getting news from such an institution (e.g. The Times, Telegraph, Daily Mail, Sun, etc), you’ll probably feel a certain amount of trepidation about the idea of the Labour party being in charge of the economy once again, because you’ll probably think they’re incompetent, although you’ll probably struggle to elucidate exactly why you think that and exactly why the Conservatives should be better.
This is a FUD attack. And it resonates very effectively, but it’s entirely emotional and not at all based in logic or fact.
Whether or not Labour over-spent in their previous government is highly complex and doesn’t reduce down to just “well we have no money, so they must have done”, because economies themselves are highly complex (and also because the analogy is wrong – we do have money). For example, a government can’t easily hold onto a surplus because its voters then start to wonder why they don’t have lower taxes. Household economics has no such phenomenon.
Robert Peston has a good article on the matter which stops short of saying they didn’t over-spend, but points out regulation is the more important issue.
Whether or not Labour over-spent compared to what a Conservative government would have done, however, is very easy to answer: no they didn’t. In 2007 then shadow chancellor, and now chancellor, George Osborne promised to match Labour’s spending plans until 2011, which shows an astonishing lack of awareness for a party which claims to be more economically responsible and competent than Labour on the grounds that they wouldn’t have “overspent like what Labour did”. Yes you would – you said so yourself.
If we’d had lower spending we’d have had more room to borrow to handle the crash better. But under that alternate timeline we’d still have had massive borrowing at the point of the crash, which is what the Conservatives claim to be against, and this borrowing wouldn’t have fixed the root cause of the crash.
The reason the crash hit us so badly in the first place is because so much money is tied up in the world of finance, which was putting a lot of money into risky loans. The banks had steadily been deregulated starting with the previous Tory government because lack of regulation let them behave more and more recklessly to rake in vast quantities of money in the short term. We know the long term result of that. Anyone with a basic grasp of reality knows the long term result of repeatedly engaging in risky behaviour.
Also in 2007, the Tories published a report ridiculing the Labour party’s regulation, with quotes such as “Government claims that this regulation is all necessary. They seem to believe that without it banks could steal our money”, so under their idea of economic prosperity, we’d probably have been hit even harder.
The summary is:
1. Spending is a side issue, although not unimportant
2. Regulation of banks is important.
Conservative rhetoric is the opposite: Spending is absolutely important, and regulation is bad for the free market and global competitiveness.
The notion that the Labour party is economically irresponsible and the Conservative party is economically literate does not hold up to scrutiny.