On The Road To Nowhere

Patrick Worrall writes:

It was all guns blazing for George Osborne and the Tories this morning.

The chancellor was in Twickenham, saying he was going to “fire a starting gun on a very important election”. No point in firing a starting gun on an unimportant election, is there?

“Our message is simple,” he tweeted. “Let’s stay on the road to a stronger economy.”

In case anyone missed his simple message, he tweeted a picture a minute later, of the Conservatives’ election campaign poster.

FactCheck couldn’t resist but pick up the gauntlet.

The claims

“1.75 million more people in work”

The poster doesn’t spell out any time frame for this one – 1.75 million more people in work since when? – so we’re presuming it’s since the last election.

The Office for National Statistics has figures on the number of people working, and they’re presented in three-month intervals.

From May to July 2010, there were 29.325 million people working. From August to October 2014, the figure was  30.796 million people.

Our sums said there were 1.471 million more people are now in work.

Why the discrepancy, we asked Conservative HQ?

Because, they said, the baseline should begin before they came to power, not when they came to power.

From February to April 2010, there were 29.048 million people working.

Which adds up – from that point, there are 1.748 million more people in work.

“760,000 more businesses”

Again, the ONS collects figures on how many businesses there are.

They say that there were 2,263,645 business entities in March 2014. In March 2010, there were 2,100,370 businesses.

Calculator says that’s 163,275 more businesses.

Quite different to 760,000, we suggested to Tory HQ. Where did they get that from?

They directed us towards the Department for Business, Innovation and Skills’ (BIS) statistical release on business populations.

This said there were 5,243,100 private sector businesses in 2014, and there were 4,483,000 in 2010 – the year the Tories used as their baseline. Leaving a difference of 760,100.

How can the numbers be so different?

Because BIS includes unregistered businesses which don’t pay VAT or PAYE and have no employees – in other words, self-employed people working alone, some in partnership.

The ONS, on the other hand, only includes registered businesses which pay VAT and/or PAYE.

According to the source the Tories have used, there are 760,000 more businesses. They just haven’t mentioned that 707,200 of them have no employees.

“The deficit halved”

Within hours of the poster being circulated this morning, Fraser Nelson had posted a blog on The Spectator’s website headlined: “Which Tory MPs will repeat the porkie about ‘halving’ the deficit?’”

He justifiably points out that at prime ministers’ questions last month, David Cameron said: “We have got the deficit down by a third.”

How can they both be right? Indeed, are they both right?

The deficit means public sector net borrowing – the difference between what the public sector receives and what it spends each year, measured on an accrued basis.

Public sector net borrowing in 2009-2010 was £153bn in cash terms, according to the ONS.

So if the deficit has halved, you would expect it to be about £76.5bn in cash terms.

But it isn’t – it’s £91.3bn for 2014-15, according to the OBR. That’s a drop of 40 per cent.

What Mr Osborne is talking about is a decline as a proportion of GDP.

The OBR said the deficit is expected to reach 5 per cent of GDP this year, and in 2009-10 it was 10.2 per cent of GDP – about double what it is now.

So in that sense, the poster is about right, though the statement in itself – “the deficit halved” – is close to being a half-truth in itself.

So why did the Tories use the less commonly used measure, when even their party leader used a different one just a few weeks ago? Is it because it sounds better, we asked?

A spokesman for the Conservatives said: “The cash figure for the deficit is not the most common usage of it. The deficit is a technical term and usually given as a percentage of GDP, as it is by the OBR.

“We have consistently used this definition as it is the correct and more economically meaningful one.”

By Fariha Karim