We all know the rationalisation: I just bought desirable item X for £50 less than the marked price so I’ve “saved” £50 I can spend on something else. Of course, the £50 isn’t real – it’s just a notional saving and my claim when I get home that “I’ve just saved fifty quid” is greeted with understandable scepticism.
We’ll see plenty of Shopaholic Economics during this Election, alongside Fantasy Efficiency Savings. The Tories claim they can pay for cancer drugs from “saving” money by not implementing the National Insurance tax rise that would have taken money off the NHS. This surely rates as one of the most imaginative, and completely specious, Shopaholics Economics claims.
But Chancellor Darling’s claim that employment rose last time NI was increased (at the beginning of the Noughties) and therefore it wasn’t a ‘tax on jobs’ is just as specious. Small NI increases may have only a second order impact on employment, but it does have an impact. Jobs continued to rise because of other factors and would probably have risen a bit faster if the NI increase hadn’t been made.
So watch out for more specious claims – the aim of both Tories and Labour will be to avoid spelling out where the cuts will fall when they start really cutting public spending, whether this year or next.