Tuesday News Review

The economic alternative

Ever since George Osborne followed me into the Treasury he, and his Lib Dem colleagues, have been trumpeting the virtues of Draconian cuts in spending. They use the deficit as an excuse for excessive public sector cuts. There must be cuts but in the current climate any government’s priority should be growth, as I said and my colleague and successor Alan Johnson set out yesterday. The Labour government made growth and jobs a priority. We stopped the recession turning into a depression, and kept people in jobs and in homes. The Tories cite the example of Greece and the threat of downgrading from credit rating agencies to scare people. Parallels should not be drawn between the UK and Greek economies and they know it. The Coalition inherited a triple-A rated economy and in the months since Labour left office growth has risen faster than I predicted and borrowing is lower. The Government’s austerity plans threaten to derail recovery. – Alistair Darling, The Mirror

He did say that “Ed Miliband and I are clear” that halving the deficit over four years is the correct policy. “Our policy remains to halve the deficit by 2013, ’14”. But he immediately added that tax must “do more of the work” to balance the budget. He emphasised that “public services matter”, calling for an approach that “values public services” not one that “relishes curtailing them”. He said the approach must be flexible enough to react to changing circumstances — reminded his City audience of the Irish reversion into recession. And he highlighted the “biggest difference” between the Labour and Government positions as “the need to return to growth”, pointing out that “a rising dole queue means a bigger dole queue”. – The New Statesman

Accusing the Coalition of basing its timetable of cuts on the 2015 General Election rather than the economic needs of the country, Mr Johnson used his first speech in his new role to announce Labour would sting the banks for more money – an extra £3.5 billion on top of the UK Government’s already announced £2.4bn bank levy. “The banking sector is contributing £2.4bn whilst child benefit freezes and cuts will raise substantially more, so families take the strain while bankers grab the bonuses,” insisted Mr Johnson. “There’s no justification for such an unfair sharing of the burden, so we will ask the Government to think again and come forward with proposals for the banks to make a greater contribution.” While Labour would not increase personal taxation any further than planned, Mr Johnson said he accepted the Lib-Cons’ freezing of the basic rate limit for income tax from 2013. – The Herald

LABOUR would raise extra taxes to tackle Britain’s debt crisis, shadow chancellor Alan Johnson revealed yesterday as he set out his party’s alternative to the coalition government’s economic strategy. But in his first major speech since taking on his new role, Mr Johnson made it clear that Labour would not be lurching to the left under the leadership of Ed Miliband. Instead, the shadow chancellor set out plans which would follow the deficit reduction strategy outlined by his predecessor, Alistair Darling, of halving the £155 billion deficit by 2015. In doing so, he rejected the economic policy outlined by Mr Miliband’s leadership rival, Ed Balls, that savings should be delivered much more slowly over a far longer period. – The Scotsman

Trident to be delayed

A replacement of Britain’s Trident nuclear deterrent will be delayed, possibly for as long as five years, the government has decided as ministers seek to save billions of pounds from the defence budget. David Cameron will confirm to MPs today, when he launches the strategic defence and security review, that the irreversible “maingate” decision on replacing Trident will be delayed until after the 2015 election. Whitehall sources said that the building of the new generation of nuclear submarines will be delayed until the mid 2020s. The decision means that the first of the new generation of nuclear submarines may not be in operation until 2028 or 2029, four to five years after the first Vanguard is due to be withdrawn in 2024. The lives of the Vanguard submarines will be prolonged to fill the gap. – The Guardian

Ken Livingstone and the race to be mayor of Tower Hamlets

Labour’s candidate for London mayor, Ken Livingstone, has been campaigning with a non-Labour candidate in a separate local election in the East End, in breach of his party’s rules. He backed Lutfur Rahman, an independent running to be mayor of Tower Hamlets. Labour rules state that any member who campaigns for another party should be automatically expelled. Mr Rahman ran as an independent after being deselected as Labour’s candidate over “serious allegations” against him. These concerned both “the eligibility of participating voters” and Mr Rahman’s “conduct”, Labour said in a statement. The party’s ruling body, the National Executive Committee (NEC), took the decision last month, even though Mr Rahman was voted in by local members. – The BBC

The race to become Tower Hamlets’s first-ever directly-elected mayor ends this Thursday and poses Labour’s biggest electoral test since Ed Miliband became leader. As the Guardian’s London blogger Dave Hill points out, the chance to win control of the “Olympics borough” and its billion-pound plus budget makes this contest more significant than most by-elections. Labour, which took Bethnal Green and Bow back from Respect at the general election, is under threat from independent candidate Lutfur Rahman, who was removed as the party’s candidate amid criticism of his links to the Islamic Forum of Europe and concerns over the “eligibility of participating voters”. With the support of local MP Rushanara Ali (who I interviewed earlier this year), Labour’s Helal Abbas (who replaced Rahman as the party’s candidate) submitted a dossier to the National Executive Committee attacking Rahamn’s record as leader of Tower Hamlets council and claiming that he had been “brainwashed by extremists”. – The New Statesman

One Response to “Tuesday News Review”

  1. FinWeek says:

    Greece is one of countries in EU, which caused the debt crisis. Really I think that the country should get high sanctions from the European Commission.

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