THE BBC has been accused of “promoting economic illiteracy” after its chief political editor claimed the Tories were being forced into the cuts announced in today’s spending review because the UK had “no money left”.
Speaking on the BBC’s Politics Live, Laura Kuenssberg said there was “absolutely eye-wateringly enormous” levels of public borrowing, adding: “This is the credit card, the national mortgage, everything absolutely maxxed out.”
Her rhetoric has been accused of being “absolute twaddle” and of laying the foundations for a return to Tory austerity, which one economics expert said doesn’t “bear thinking about”.
Kuenssberg, the BBC’s chief political editor, said: “If you think about the debate we had really all the way through from the late noughties all the way through to the 2015 election, it was defined by ‘how is the country going to pay back what we had to borrow in the credit crisis?’.
“This is that, and some, okay?
“This is the credit card, the national mortgage, everything absolutely maxxed out. Enormous levels of the country basically being in the red.”
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Kuenssberg stressed that although the health crisis may be ending, “this is the beginning of the economic emergency”.
“Some ministers worry that there are MPs, and certainly members of the public, who just haven’t really absorbed yet what the scale of the economic knock here is,” she said.
Kuenssberg was speaking alongside Faisal Islam, the corporation’s economics news editor, who did offer some counter to her position.
Islam said that, although there is record levels of borrowing, currently reaching almost a fifth of national income, the cost of funding that borrowing is actually at a record low.
He pointed to what he called “imaginary line thinking”, saying “people think well, whatever happened last time, it will repeat”, before again emphasising that there are actually “record lows for how much we are going to pay for this amount of debt”.
Frances Coppola, an economics expert and Financial Times contributor, said Kuenssberg "should have ... let [Islam] explain the economics". "That is his job."
Laura Kuenssberg talking absolute twaddle on #PoliticsLive. Repeating the "no money left" nonsense from 2020. Talking about "maxed-out national credit cards". @BBCPolitics this is an utter disgrace and totally irresponsible. Please educate your reporters in basic economics.
— (((Frances "Cassandra" Coppola))) (@Frances_Coppola) November 25, 2020
She went on: “Laura Kuenssberg talking absolute twaddle on Politics Live.
“Repeating the ‘no money left’ nonsense ... Talking about ‘maxed-out national credit cards’.
“BBC Politics, this is an utter disgrace and totally irresponsible. Please educate your reporters in basic economics.”
Coppola said the situation had been “made worse by economically illiterate commentary on the BBC”.
She added: “When the BBC continually broadcasts economic nonsense it is hardly surprising that people know little about economics.
“The state broadcaster has a responsibility to educate and inform. It is failing to do so.”
Responding to and resharing a post from an anonymous Twitter account which stated: “So sick of the child like approach to economics portrayed by the media. This is how the Tories scared everyone into austerity in 2010”, Coppola wrote: “The consequences of repeating the same mistake again don't bear thinking about @BBCLauraK.”
The economics writer added that Kuenssberg's "2010-style rhetoric ... about 'maxed-out credit cards' and 'there is no money left' ... seems to have been briefed by the Treasury".
Coppola said that the language being used "is signalling future spending cuts and tax rises", or a return to austerity.
Anyone making claims that we "can't afford" to support jobs and families during and after the pandemic, that there is "no money left", that we've "maxed out the nation's credit card", that we're "loading debt onto our children" is talking economically illiterate nonsense. https://t.co/v9JzlOu7Jv
— Jonathan Portes (@jdportes) November 25, 2020
Jonathan Portes, a professor of economics at King's College London, wrote: "Anyone making claims that we 'can't afford' to support jobs and families during and after the pandemic, that there is 'no money left', that we've 'maxed out the nation's credit card', [or] that we're 'loading debt onto our children', is talking economically illiterate nonsense."
Still more experts condemned Kuenssberg’s "unfounded" rhetoric.
Julian Jessops, an expert from the Institute of Economic Affairs think tank, added: “Well, that was awful. Tone set by claim that ‘our economic emergency has only just begun’ – ignoring better data and downward revisions to OBR forecasts for unemployment.
“Needlessly pessimistic, penny-pinching, petering out with Churchillian waffle…”
Chris Marsh, a blogger and former economist with the International Monetary Fund (IMF), said Kuennsberg’s “language [was] hugely irresponsible and unfounded”.
Writing in the New Statesman in response to Kuenssberg's comments, Stephen Bush says: "Essentially, everyone – the International Monetary Fund, the Institute for Fiscal Studies, almost all economists – agree that we do not at present need to worry about the deficit or government debt, and that government should be borrowing more."
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Writing in today's National Extra, George Kerevan highlights how the "cost of servicing the National Debt (circa £2 trillion) is actually falling because of low interest rates".
"In fact, the latest public spending increases are being funded by the Bank of England, which is owned by the Government. In other words, Chancellor Sunak is taking from one pocket and putting it in another," he writes.
Elsewhere, political economist Richard Murphy said that scaremongering around national debt repayments was an “obsession”.
He said that “every bit [of the national debt] plays a vital role in keeping the UK, its pensioners, savers and banks, plus its international trade secure. Now which bit of that do you want to forego?
“Or is that that we really do not need to repay the national debt, and the claim that we have to do so is made up to give reason to tax you (but not the wealthy and big business) quite a lot more and to persuade you that austerity is really necessary when it isn't? You decide.”
Approached for comment, a BBC spokesperson said: "The BBC's political editor is a first-class journalist who provides insightful analysis about key political moments."
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