Members of the Question Time audience became conspicuously grumpy when Ed Miliband said the last Labour government did not over-spend. So who was right - them or the Labour leader?
There was a gap between what Labour was spending and what it was receiving in tax revenues in the few years before the great crash and recession of 2008. But that gap was not massive: sometimes it was a tiny bit bigger than the growth rate of the economy, sometimes a bit smaller; which means there was no significant increase in the ratio of public sector debt to national income or GDP. Thus in 2007-8, public spending was 40.2% of GDP, compared with tax revenues that were 37.5% of GDP: so the deficit was 2.7% of GDP.
Now there are plenty of economists and mainstream politicians who regard both public spending of that magnitude and a deficit of that scale as sustainable and indeed sensible. And to put those figures into context, public spending by the government of Margaret Thatcher was significantly higher than that for her first seven years in office - and she consistently ran a deficit of that scale till her last three years in office. So it is quite hard to describe the fiscal conduct by the government of Tony Blair and Gordon Brown as wildly irresponsible. And, to be clear, neither George Osborne or David Cameron were at the time shouting that the Labour government was maxing out the credit card and was about to bankrupt Britain. The Question Time audience did not seem altogether satisfied with the mea culpa that Ed Miliband did make, namely that Labour's mistake was to put in place inadequate oversight of the banks to prevent them behaving recklessly and mullering the economy. Of course the crisis would have been less acute if the Financial Services Authority and the Bank of England had taken earlier action to prevent the banks lending in their insane way.
The above is taken from Robert Peston’s analysis for the BBC, which thankfully we can trust as a source of information when compared to the 85% of newspapers that are controlled by the Conservatives.