Today figures show the results of the Labour Government’s balanced approach to supporting the recovery. And they remind us of the threat posed by the coalition’s willingness to take risks.
This is the fastest growth we have seen for over four years. It shows that confidence was returning. And you can see the success of maintaining support for important sectors like construction. This is the final nail in the coffin of the Coalition’s argument that things are worse than they believed before the election. Today’s figures show that growth was twice as fast as expected.
The Coalition’s economic policy is not inevitable – it’s the choice they’ve made. And they will have to accept responsibility for the risks they are taking with the economy.
As I have consistently argued, withdrawing help to the economy now puts growth in jeopardy and could be more costly in the long run if more people lose their jobs. It is increasingly clear that we’re seeing the return to politics of a serious ideological debate. This government’s clear and overriding priority is to cut back the state. Otherwise they would not announce cuts with such relish
They say they have no choice but to go ahead with draconian cuts. But there are choices and they have made theirs. The Tories and Liberal Democrats have chosen to go further and faster than us in reducing the deficit.
I think they are wrong. They are taking a massive risk with the economy and people’s jobs. George Osborne believes the private sector will step in as the public sector is reduced. But in the current climate, there’s nothing automatic about it happening. The economy does not work like a giant seesaw: when the public sector is down, the private sector is up. These are the economics of the playground.
We stepped in to stop the banks collapsing in 2008. And to stop recession turning into depression. We succeeded but it is not a simple case of job done. The role for Government in securing growth hasn’t gone away overnight. The private sector is not out of the woods – and cannot be relied upon to simply step in as the public sector is cut back on the kind of scale the Tories hope to deliver over the next five years.
Whatever happens the Government’s plans mean the withdrawal of vital public services. And if the Tories and Liberal Democrats are proved wrong, and their gamble doesn’t pay off, the result will be longer dole queues.
It was to make sure this did not happen that I presented a plan to halve the deficit in four years. We must get borrowing down. There should be no argument about that. There are some who make the case for no cuts. That is not a credible position.
As we emerge from the greatest global economic crisis for nearly 100 years we need to be clear that borrowing must be reduced. But Labour is certain that the plans favoured by the coalition will undermine the recovery. And we will not fail to point out that the rush to collective austerity in Europe, which remains our largest export market, threatens rather than supports the delicate path back to growth in the UK.
Today’s growth figures vindicate the action we took. We will continue to argue robustly for our balanced plan for deficit reduction – tied to maintaining the economic recovery we see is underway, but under threat.
The Rt Hon Alistair Darling is MP for Edinburgh South West and Shadow Chancellor
Tags: Coalition, cuts, deficit, economy, Growth, jobs
Well, it is always a mistake to put too much reliance on one quarter’s figures, and in this case the figures for Construction look a bit anomalous, but with those caveats the figures look encouraging.
Therefore, this is the final nail in the coffin of the Labour’s argument that it is too early to start addressing the deficit.
That was of course always a specious argument, since the savings George Osborne proposed in the first year were very modest – less than the error in your forecasts, Mr Darling.
In fact, it appears to be the case that Labour thinks it is NEVER a good idea to address the deficit. Incredibly, Gordon Brown was running a deficit during the biggest boom in tax revenues for many years, if not ever – for a full five years before the crisis broke.
If you advocate running a deficit during the boom years, and during the bust, and during weak recovery, and during slightly stronger recovery, even to the extent of spending four pounds for every three pounds of revenue, you should not be surprised if people conclude that Labour is congenitally irresponsible.
It would also be nice to hear what exactly Labour’s plans for spending cuts were. Did they actually exist?
Hell you forget according to Brown boom and bust was over, hence no need for saving for bad times, because the bad times were over. The sad fact is of course even when Thatcher left in tears the economy was better in fact is was the start of the good times labour said was their planning.
But of course labour brought in welfare reforms getting single mothers back to work, prescription charges and Blair even thought about people paying a fee for the GP , Brown thought the poor should not have a better tax agreement then the rich so hit the poor.
In the end with Brown talking about stopping disability benefits I was so sick and tired of New labour i would have voted for Thatchers return even at her age then vote in another bloody Labour party
“Well, it is always a mistake to put too much reliance on one quarter’s figures, and in this case the figures for Construction look a bit anomalous, but with those caveats the figures look encouraging.”
Yep.
“Therefore, this is the final nail in the coffin of the Labour’s argument that it is too early to start addressing the deficit.”
Nope, you’ve got completely the wrong end of the stick. The previous quarters growth figures showed that we would have gone back into negative growth without government spending, these figures are mainly propped up by government spending in construction. Also, Osborne got his tame independent economist, Alan Budd, to cut Darling’s growth forecasts as they were to optimistic but these figures exceed Darling’s forecasts therefore based on these figures he, Darling, was right. Coupled with the low interest rates we’re paying on our debts, the looooong time we have to repay those debts and the fact 85% of our debts are owed to ourselves anyway it is increasing apparent that the LibCon economic policy is ideological not practical.
“That was of course always a specious argument, since the savings George Osborne proposed in the first year were very modest – less than the error in your forecasts, Mr Darling.”
Nope, we need confidence and growth to take hold not immediate swingeing cuts that needlessly put people out of their jobs. Osborne’s first cut was to the Future Jobs Fund which shows hold seriously he views youth unemployment. And his supposed efficiency savings didn’t materialise either, £1bn he said he could find in “IT projects” in reality the most he could find was £100mn so he had to cut Child Trust Fund’s.
Oh and if you want to see a real specious argument try Cameron’s £6bn of efficiency savings to negate the need to increase NI…yeh an NI increase wouldn’t have raised an extra £6bn *per year*…oh no it would so wtf was Cameron talking about???
“In fact, it appears to be the case that Labour thinks it is NEVER a good idea to address the deficit. Incredibly, Gordon Brown was running a deficit during the biggest boom in tax revenues for many years, if not ever – for a full five years before the crisis broke.”
Labour was totally honest about the need to borrow to pay for the massive investment needed in our infrastructure. Before embarking on any such borrowing though Brown paid *down* the national debt which is why even now after bank bailouts, recession and record investment in our people, public services and infrastructure we still have a lower national debt than numerous other industrialised countries.
The entire LibCon argument that public spending caused the current deficit is total BOLLOCKS, going into the 2005 general election the tories promised to match Labour’s spending plans until 2012. The LibDems were promising to exceed our spending plans. Even that is beside the point though because the deficit was 2.5% before the bankers imploded and 11.5 after thus a reception class child should be able to work out that 9% of the deficit is the fault of the banks. They should be stumping up a hell of a lot more than a proxy 0.04% of their balance sheet.
“If you advocate running a deficit during the boom years, and during the bust, and during weak recovery, and during slightly stronger recovery, even to the extent of spending four pounds for every three pounds of revenue, you should not be surprised if people conclude that Labour is congenitally irresponsible.”
Rubbish, typical blinkered tory argument.
“It would also be nice to hear what exactly Labour’s plans for spending cuts were. Did they actually exist?”
Oh f**k off, Labour stated how much they’d cut and how they’d split the cuts-taxes ratio and you know how the LibCons are going about it – the LibCons are in government so they must make the hard decisions and justify them to us.
So far the LibCons haven’t made a very good start, having stated *no* frontline cuts they’ve cut or are going to cut just about every frontline service provided by the welfare state and all so their fat cat banking chums can carry on creating wealth for themselves.
Oh well in the next year we will all see.
Chris – “Rubbish, typical blinkered tory argument…. Oh f**k off, Labour stated how much they’d cut and how they’d split the cuts-taxes ratio and you know how the LibCons are going about it – the LibCons are in government so they must make the hard decisions and justify them to us.”
Thanks for the personal abuse – it’s always reassuring because it is a public demonstration to everyone who reads this blog that I’ve won the argument.
I’m still waiting, though, for the response to the main question. Yes, Labour (or at least Mr Darling) said they’d cut public expenditure. He even gave some top-line figures. But WHAT would he cut to reach these figures? Did he even know?
There are two possibilities. Either he did know, but the plans were kept secret so as not to frighten off those voters who still believe in fairy-tales, or there were no plans and the whole proposition that the deficit would be cut under Labour was just make-believe and wishful thinking. I’m inclined to think it was the latter, but if anyone has any information about Labour’s spending-cut plans, they would be very interesting to see.