The claim
“Over this parliament this government will be investing more than £3.1bn compared to £2.7bn in the previous five years over the last Labour government. This is more than ever before, both in cash and in real terms.”
Eric Pickles, 06 February 2014
The background
Yesterday we looked at the government’s claim that it is spending more than ever on Britain’s flood defences.
We found that this statement only stands up if the coalition takes credit for high spending levels that were set under the last government, and plays down the size of the cuts it decided to make to the flood budget.
As the bad weather continued to batter Britain this morning, there was another Commons statement.
The communities secretary, Eric Pickles – standing in for an unwell Owen Paterson – announced an extra £130m to bolster our flood defences.
That, he suggested, put the coalition well ahead of Labour on spending “both in cash and in real terms”.
We’ve got grave doubts about that. Here’s why.
The analysis
These are the latest figures on how much Mr Paterson’s Department for Environment, Food and Rural Affairs plans to spend on “flood and coastal erosion risk management” until the end of this parliament. They include the extra £130m announced today.
The first thing to note is the drastic cut in spending after 2010/11, when the total flood defence budget fell by around £100m from £670m to £573m.
The second thing to remember is that although the total spend looks much bigger now than it did in 2005, these numbers haven’t been adjusted for inflation.
Now, the government’s claims about how much it is spending on flooding have changed over time.
At first Mr Paterson claimed it was spending more over the four years of the current spending review period – that’s the four years starting from 2011/12 – than in the previous four years.
At the time, that was simply untrue on any level, and it’s still untrue in real terms.
Then the wording changed.
Yesterday Defra told us they were looking at 2010/11 to 2013/14, and comparing that with the previous four years. That might have been just about true, although it’s difficult to think of any reason for choosing this time period other than making the numbers fit the rhetoric.
Today the goalposts have moved again, and Mr Pickles wants to use a different time frame. Now we are talking about spending in the five years from 2010/11 to 2014/15 compared with the previous five years.
He specifically said that this was true “both in cash and in real terms”, but we are yet to be convinced about that.
We ran the numbers through the Bank of England’s online inflation calculator and through the Treasury’s GDP deflator.
If you prefer the Bank of England’s measure of historic inflation Labour are slightly ahead. Use the Treasury system and spending during the five years of the coalition is up by a tiny amount. The spending totals are so similar that Mr Pickles’s resounding claim depends entirely on fiddly accounting assumptions.
But the biggest problem here remains the fact that the government is seeking to include spending for 2010/11 as part of its spending record, despite the fact that the budget levels for that year were inherited from Labour.
After the coalition spending review in October 2010, a decision was made to cut spending on Britain’s flood defences, to the tune of about £100m or 16 to 17 per cent in real terms in just one year.
Spending was set to well below the level inherited from Labour in subsequent years.
There’s no dispute about this cut. This House of Commons Library note provides chapter and verse on how various agencies reacted to it. It also says the cut came after Labour increased spending by three quarters in real terms from 1997 to 2010.
The Association of British Insurers were particularly disappointed, as insurance firms had wrung a promise to invest more in flood defences from Labour in 2007 and they felt the coalition were welching on the deal.
The cut wasn’t accidental. It was part of a broader strategy of reducing the deficit by cutting capital spending, something that happened across most departments.
It’s difficult to see today’s decision to ramp up spending by up to 100m a year as anything other than an admission that the government was wrong to cut the budget by roughly that amount in the first place.
The verdict
It’s interesting to note how the wording of this claim has twisted and turned over time.
We’re not actually sure that the latest version is literally true. We think it’s a very close call and it all comes down to how you work out inflation.
But the bigger dishonesty here is the attempt to rewrite history and try to take credit for the high spending inherited from Labour, when this government took the decision to cut back spending on flood defence.
