If Labour were credible on the deficit, Cameron’s speech would have been a disaster

by Atul Hatwal

Lucky David Cameron.

Lucky, because the global economic upturn has dealt him a kind hand on the economy, just as the crash dealt Labour a dud.

Lucky, because the lack of serious alternatives within the parliamentary Conservative party has assured his tenure as leader, no matter how jittery or demented his backbenchers have become (imagine how different the situation would have been had there been a Heseltine or Portillo lurking in the Commons’ corridors instead of Adam Afriye.)

And, most of all, lucky because David Cameron faces Ed Miliband’s Labour party.

A party so denuded of economic credibility that the Tories can increase the deficit by £75bn, miss all of their fiscal targets, and still maintain a double digit poll lead over Labour, on who is most trusted to manage the economy.

It’s why David Cameron could make the speech he did yesterday. A speech offering an unfunded £7bn+ tax cut just 48 hours after George Osborne talked up the need for an extra £25bn in cuts.

We have passed through the looking glass and entered a world of Wonderland economics: where tax cuts are all self-funding and public spending cuts have no consequence.

If Labour had done what it needed to four years ago; demonstrated that it understood the public’s anxieties over spending with the last Labour government, and moved to win back public trust, then David Cameron would now be in serious trouble.

The public would be listening as Labour spokespeople point out the political hypocrisy and economic insanity at the heart of David Cameron’s speech.

Years of Tory message discipline on the need for fiscal rectitude would be lying in ruins. Mistrust of the Tories on public spending would be taking off in the polls.

But none of that is happening.

Instead, as far as the public is concerned, Labour remains on mute. Whatever the party says on the economy is tuned out because of the deeply held belief that however bad the Tories are – and there’s lots of evidence that the public have little faith or confidence in Cameron and Osborne’s economic judgement – Labour will be worse.

It’s been a tumultuous political year. The coda of Ukip’s rise, the strength of the SNP and popular revulsion at all things Westminster has been that there is a crisis in politics.

It’s certainly the case that all is not well with the British body politic. But the diagnosis is not that our politics is broken, as is so often claimed. The Scottish referendum showed that there is little wrong with our political institutions or structures.

Instead, conference season has vividly underlined the real problem: the Labour and Conservative leaders just aren’t very good at their jobs.

Ed Miliband forgot to mention the deficit in his speech, a near sublime metaphor for Labour’s behaviour over the past four years.

David Cameron did remember the deficit, he stressed its importance and his commitment to tackling it, mere seconds before setting out a policy that would tip a tanker of kerosene on Britain’s burning debt problem. It’s difficult to conceive of a more profound or barefaced contradiction.

In contrast to this strategic ineptitude, is it any wonder politicians such as Alex Salmond and Nigel Farage are alluring to voters. The clarity and certainty offered by populists such as these is a powerful antidote to the muddle and confusion peddled by David Cameron and Ed Miliband.

Even though most SNP and Ukip supporters would have doubts about the snake oil being sold, they are willing to set aside these qualms, because the offer from the Labour and Conservative leaders is so poor.

On the evidence of the main parties’ conferences, it’s hard to see why these voters would change their minds.

Atul Hatwal is editor of Uncut

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25 Responses to “If Labour were credible on the deficit, Cameron’s speech would have been a disaster”

  1. steve says:

    “demonstrated that it understood the public’s anxieties over spending”

    So there we have it: focus on perception management rather than reality.

    A growing number of people are realising that New Labour’s PFI frenzy has lumbered the NHS with unmanageable debt, this will devastate our health service.

    And of course, New Labour’s disgraceful betrayal of U.K. armed forces with the pointless Iraq war has, as we see on our TV screens everyday, produced long-term, disastrous consequences.

    It is matters such as these that have destroyed Labour’s credibility, and not just with regard to economic policy.

  2. Madasafish says:

    I have read the comments on Labourlist on Balls’ Conference speech.

    Almost to a person, they were all against his policies of “austerity”. If they are typical of Labour voters as a whole, Labour would have a real problem in Government as obviously some people think money grows on trees and more spending is the answer to everything.

    Whilst you have such mass views opposed to your Party’s avowed policies, what you say is worth half of nothing. It’s what you DO which counts.

    I have lived as an adult through two major periods when Labour was in Government. The financial mess was bad both times.. with both Governments reluctant to cut any spending unless threatened by outside influences..

    Third time lucky? Will the leopard change its spots?

    Judging by the views of supporters, nothing will change as internal pressures will force a return to spending with reckless abandon.

    And we all know what Ed Balls did when in Government. Hosed money up a wall.

  3. Robert says:

    Light regulation of the City was the problem during the Labour years not public spending, which has probably kept the economy going for the last few years. Atul seems to believe that politics should be about two centre-right parties competing for voters but democracy needs a left of centre option. Labour is providing that however imperfectly.

  4. Ex Labour says:

    @ Atul

    Talking of Labour’s economic competence, I was struck by this from you….

    “the Tories can increase the deficit by £75bn”

    Er…..according to ONS/OBR stats the deficit is currently £75B and is DOWN from when Labour left office at £100+B.

    Of course the debt also soared out of control under Labour.

    Have a look at the ONS/OBR stats before you foray into the figures.

    Keynsian economic’s failure.

  5. Henrik says:

    @Robert: Labour’s not a leftist party, it’s a statist party. It represents public sector workers and the unemployed, with a thin garnish of media luvvies on top. Given that demographic, of course Labour always spends everyone else’s money to the advantage of its own constituency and of course someone else has to sort out its epic financial incompetence every few years.

  6. BenM says:

    “A growing number of people are realising that New Labour’s PFI frenzy has lumbered the NHS with unmanageable debt, this will devastate our health service.”

    People don’t understand PFI.

    The “debt” is future liabilities – basically what will be paid to contractors for running the asset for the remaining contract term.

    The thing to note is that most of these costs will be incurred anyway, regardless of the financing strategy. They include day-to-day maintenance, staffing etc. No one is suggesting the NHS would not have employed these people or carried out those activities.

    The argument against PFI is that the costs are going to be higher than what they would otherwise have been, because private contractors cannot borrow as cheaply as government and because of profit margins made. But the majority of those costs would be incurred regardless.

  7. Disgruntled Peasant says:

    “the Tories can increase the deficit by £75bn” Um, I think you need to go back and check you notes, the deficit in 2010 was £167 billion pounds, the Tories have cut the deficit by almost £100 billion in absolute figures and by almost 2/3rds when adjusted for inflation. The National Debt is up (though a good chunk is owed to the bank of england), the deficit is WAY down, though not eliminated, as was the pre-election pledge, but given that the ONS have stated that the recession was deeper and the deficit larger than anyone though before the elction the Tories have a big get out of jail card to play in the run up to the election.

    If the Labour party is to have any economic credability going into the 2015 general election basic mistakes like this cannot be allowed to happen on a public forum.

  8. A very disgruntled peasant says:

    I don’t know, you point out errors in a post and what do they do? Correct the error? No, they delete your comment and hope nobody else notices!

    I will say it again for the cheap seats, the Tories have NOT increased the deficit as this article states, they have reduced it by almost £100 billion in absolute figures and 2/3rds when adjusted for inflation, National Debt is up, deficit is WAY down.

    If you are going to talk about economic credability at least get the figures right yourselves.

  9. Mr Akira Origami says:

    Crisis what crisis? ……….Milliband forgetting to mention the deficit is like Winston Churchill in a WW2 speech forgetting to mention the Nazi’s.

    The British electorate must never except Labour’s Paydayloanism again.

  10. Landless Peasant says:

    Personally I couldn’t give a toss about the economy or the deficit, and it’s not something that would influence my voting in any way whatsoever. I have no money and I’m not a Capitalist. Why should I care? What I DO care about, however, and what WILL influence my ballot, is the illegal gross underpayment of State Benefits and the Sanctions to those Benefits. I will NOT vote for any Party that supports illegally low Benefits or Sanctions.

  11. swatantra says:

    Lets face it Labour lost the economic/austerity argument about 3 years ago.
    Its time to accept that, and move on, forward, hopefully.

  12. Mr Akira Origami says:

    Landless peasant.

    If we didn’t have a deficit, we wouldn’t have to pay for the interest on the loan.

    Perhaps some of this money that went on interest rates could then go on: Benefits, the NHS and Education.

    At present, the interest on the UK debt is roughly £50 Billion per year.

  13. steve says:

    BenM: “The thing to note is that most of these costs will be incurred anyway”

    Not quite.

    Having opted for a more costly option, solely because of prejudice against publicly funded provision (see Allyson Pollock’s NHS plc), hospitals (hospitals that have entered into a PFI arrangement that are liable for the debt, not the DoH) will be lumbered with a debt which can only be managed by cutting services to NHS users.

    For example: the cost of capital for the new Calderdale Royal Hospital in Yorkshire was £64.6 million, but the project will cost the Calderdale & Huddersfield NHS Foundation Trust £773.2 million by the end of the contract.*

    This amounts to a massive, mainly New Labour devised, tax-payer handout to the private sector for a service that could have been provided for half the price by government borrowing.

    And some wonder why the Labour Party lacks credibility on the economy…


  14. Henrik says:

    @Landless Peasant: Fantastic reference. One guy with a pretty clear agenda. Not wholly convincing, I’m afraid. I’ve been around since the mid-50s and have been working for a living since 1973 and I know which party I trust on the economy, thanks very much indeed for your concern. Of course, the key word in that last sentence is “working”.

  15. Ex Labour says:

    @ Landless Peasant

    Explain what is illegal about the current state benefits.

    You make statement with no credibility with only reference to some lefty blogs.

    ‘Lefty blog says Labour not to blame’. Well fuck me, who would have expected that ?

    @Disgruntled Peasant

    Yep, Labour economic competence at its best …LOL

  16. BenM says:


    I agree with your comment about prejudice driving PFI decisions.

    But PFI is not really debt in the sense that most people understand it.

    It’s the liability for future payments for the service cost of that asset, Those service costs will have been incurred regardless.

    Now I agree that technically the DoH is responsible for the PFI debt, but that’s a technicality. At root HMG underpins the DoH budget and would have to step in (if it didn’t the entire edifice of this market would cave in).

    And DoH budgets are set by HMG. Which could, if it chose to, simply expand the budget to allow for PFI payments. It could do this tomorrow. But chooses not to for low political reasons.

    The whole thing is a scam.

  17. BenM says:


    “Of course, the key word in that last sentence is “working”.”

    Not the 3 million unemployed under the Tories then?

  18. BenM says:


    “Um, I think you need to go back and check you notes, the deficit in 2010 was £167 billion pounds, the Tories have cut the deficit by almost £100 billion in absolute figures ”

    LOL Since when does £156bn – £95bn = £100bn reduction?!!

    “by almost 2/3rds when adjusted for inflation.”

    Yes bend those stats as far as you can! No one measures the borrowing requirement after inflation.

    In 2010 the target was to bring the deficit down to £37bn nominal. Next year was supposed to see borrowing of £20bn nominal.

    Year to Date results predict that the deficit will be greater than £100bn nominal.

    That’s a colossal failure of policy right there.

  19. Landless Peasant says:

    @ Henrik

    “the key word in that last sentence is “working”.”

    Where’s all the real jobs? Why are people being forced to work for their Dole? Why do Tory Ministers routinely lie and misuse official stats. ? Why are the unemployment figures untrue?

    @ Ex Labour

    “Explain what is illegal about the current state benefits.”

    They are being illegally grossly underpaid. JSA is supposed to be somewhere in the region of £130 p/w, not £70.


  20. Tafia says:

    They are being illegally grossly underpaid.

    Laughable infantile garbage. The government makes the laws. So long as you are getting what the government’s laws say you should then it’s legal.

  21. John Reid says:

    Blimey the far left desperate to say with no evidence labour. Would have cut the deficit quicker than the coalition, by using what a outcry, to mention, that they feel the tories don’t care about the unemployed.

  22. Landless Peasant says:

    @ Tafia

    The British Government is signed up to a legally binding agreement under the Council of Europe that stipulates amounts of State Benefits they should legally pay. They are in breach of this law.


  23. Landless Peasant says:

    @ Henrik

    ” Not wholly convincing, I’m afraid.”

    Ok then, you stick to your own prejudices and ignore the facts.

  24. Tafia says:

    Landless Peasant – The Social Charter is not directly applicable in domestic law anywhere in the EU. Put simply, it is not legally binding in the UK – Christ in a rubber cross that’s basic stuff, same as the stuff about pensions. It’s literally just ‘bear in mind’ and ‘something to aim for’. Why do you think Labour never bothered with it and don’t now either.

    In fact it’s about to be significantly ‘slacked off’ with auditing reduced from yearly to every two years because no-one can be arsed with it other than as advisory.

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