How different might the last decade of British politics have been if the public had been better informed about economics? It’s the inescapable thought I had when reading through the BBC’s newly published “thematic review” into its coverage of “taxation, public spending, government borrowing and debt output”.
Would a public not spoon-fed mush about the supposed perils of government borrowing have been so ready to accept David Cameron and George Osborne’s austerity in the early 2010s? Would Labour’s then leadership have felt so compelled to support spending cuts – a position that helped lay the ground for Jeremy Corbyn’s anti-austerity leadership bid? Might the Brexit vote have gone differently?
The review does not hold back. Independent experts Andrew Dilnot and Michael Blastland state clearly that “too many” BBC journalists lack an understanding of “basic economics”. This particularly affects reporting on the central political issue of government debt, with “some journalists” apparently “instinctively” believing all debt to be inherently bad – and therefore failing to appreciate that the role of government debt is “contested and contestable”.
Economics coverage matters for all of us. A poorly informed public makes for bad government decisions and, as the IMF’s latest forecast reminds us, Britain’s economic underperformance is in no small part due to poor government choices.
Confronted by a complex situation, with a limited understanding of the issues involved, one respondent to the review suggests that reporters rely on simplistic political narratives – party intrigue, or Westminster gossip; meanwhile, assumed authorities are deferred to for the actual economics.
Those authorities come to assume an outsized role in reporting, their judgments and analyses imbued with a certainty that they do not, in fact, possess. “The BBC,” the review notes, should not “feel it can subcontract judgment about what is reasonable or impartial to a few established names”, including the Institute for Fiscal Studies and the Bank of England. The result is journalists too often framing policy choices, such as making cuts to spending, as if they were decisions of necessity.
The review singles out “household analogies” for the government debt, in particular, as “dangerous territory”. We’ve all seen journalists, not just on the BBC, compare government debt and household debt. The claim from the BBC’s former political editor Laura Kuenssberg, for instance, in a BBC News broadcast of November 2020, that the government’s “credit card” was “maxed out” was a classic of the type – and sparked the complaints by well-known economists that led to the review being commissioned.
Government borrowing has little in common with the borrowing that you or I engage in since, as the review puts it, “states don’t tend to retire or die, or pay off their debts entirely”. Nor do ordinary people typically have a money printing machine in their front room to pay their debts with, unlike the government and the Bank of England. Journalists reporting on economics, as the review accepts, need pithy metaphors for complex processes. But in this case, the conceptual leap from government financing to household borrowing distorts the truth. Worse, the metaphor almost necessarily lends itself to supporting government spending cuts – a position that tends to find the most support on the political right.
There are reputable economic arguments for austerity. “Expansionary fiscal contraction”, as developed by the political economist Alberto Alesina and others, was one of them. A decade of experience suggests that it was terribly wrong, but this was at least a coherent argument, based on a recognisable economic logic. That case could have been presented, alongside opposing views, as part of an effort to promote public debate and understanding of the issues around the public finances. The review points out that genuinely impartial reporting would show that different choices can be made around economy policy.
The BBC occupies a unique position – it’s both the most popular source for all news and among the most trusted single source of news. How it chooses to report that news has an enormous impact.
That means this report is an opportunity to dramatically improve the quality of the UK’s public debate on economic issues. Already, there are signs of change: the BBC seriously questioned the briefly popular rhetoric of “fiscal black holes”, which flourished after Kwasi Kwarteng’s mini-budget implosion last September. Recently, the BBC News website has raised questions about the reliability of economic forecasting. More of this, and we may see a better informed public, and more robust, enlightening debate.
This country has been badly damaged by having its politics bent around a few bad unsupported claims about how the economy works. The BBC says its director general will be drawing up an “action plan”. At a minimum, this should address the lack of training for its journalists in economics issues, and encourage broader range of expertise in reporting. Other journalists are already taking note. The next few years are likely to be extremely challenging for the British economy. We will need a public service broadcaster able to report difficult and contested economic issues accurately, fairly and impartially.
James Meadway is director of the Progressive Economy Forum
