Mr Miliband made the claim as part of a broader case about the need for public spending both during the New Labour years and now. He argued that the debt is the result of a necessary response to the global financial crisis. He concludes that “if we reduce our economic policy simply to deficit reduction, we will not build the strong economy of the future.” Peter Hoskin, writing for the Spectator online, specifically takes issue with the contention that “our government paid down the debt before the crisis hit.” 

He says “unless your definition of ‘paid down the debt’ stretches to ‘about £500 billion of debt in 2006-07 (and rising)’, then I'm afraid we've got to chalk this up as another Brownie.” 

Mr Hoskin provides a graph of the amount of national debt annually from 1997 to 2010 to prove his point and he also links to a graph of national debt measured as a percentage of GDP, which he says shows that “Labour didn’t pay down the debt as a percentage of GDP either.” 

The graph he offers is of the Public Sector Net Debt, which Treasury agency the Debt Management Office says is the “preferred” measure of national debt (see page 4). They refer to Table PSF7 in the monthly Public Sector Finances release as the appropriate source. 

Unfortunately, the figures in Table PSF7 don’t match Hoskin’s graphs. The official figure for national debt in 1997/98 is £352bn. His graph shows nearly £500bn in that year. It is a pity he does not say where his figures came from: the official statistics show the same pattern as his, with the debt figure significantly higher in 2006/07 than in 1997/98 (the red line).

Update: many thanks to Mr Hoskin for explaining his figures. His graph shows the same data as the blue line on ours but adjusted to 2009/10 prices using the Treasury's GDP deflator to make comparisons between years more useful. As explained below, we stick with the percentage of GDP (the red line) for comparison, which avoids the need for that adjustment. Mr Hoskin points out that his graph actually appears more flattering to Labour than the unadjusted red line below.

However, it also shows that Mr Hoskin is wrong to say Labour did not pay down the debt as a proportion of GDP (the blue line)—and so does his own graph. As a proportion of GDP, national debt only exceeded 1997 levels in 2008/09, after the crisis began. In fact, the monthly figures show it wasn’t until March 2009. (These figures exclude the “temporary effect of financial interventions” like the government buying Northern Rock.) 

Both the Treasury in a neutral National Statistics background note, Government and public sector debt measures, and, for good measure, the Institute for Fiscal Studies make clear that the better measure is national debt as a percentage of GDP. So it seems that Mr Miliband’s claim is justified and the accusation of deception is not. 

However, his claim is selective. Mr. Miliband said that Labour paid down the debt at the same time as investing in schools, hospitals and other infrastructure. That is certainly true from 1997 to 2001 but from then on the national debt, however you measure it, was rising, although it stayed lower than 1997 levels in GDP terms until the crisis began. 

Going back to his speech, Mr Miliband argued that Labour got the balance between spending and paying down the debt right when they were in office. Then, he says, “there was a global financial crisis affecting every country and every country is having to cope with the consequences.” 

Others have argued that is not the whole story. They say it is not just whether Labour paid down the debt but how fast and how much that matters. The Institute for Fiscal Studies, in June’s Green Budget, conceded Mr Miliband’s boast but make clear that they feel Labour did not do enough to pay down the debt: 

“The UK entered this recession with a similar structural budget deficit to that which it inherited from the Conservatives, but a smaller public sector net debt (if the impact of the nationalisation of Northern Rock is excluded). By international standards, we entered the recession with one of the biggest structural budget deficits in both the OECD and the G7 and a bigger public sector net debt than most OECD countries, although smaller than most G7 countries. Most OECD governments have done more to reduce their indebtedness and – in particular – their structural deficits than the UK while Labour has been in power.”

Mr Miliband’s claim is not wrong but readers will have to reach their own conclusions about its importance.