Carpe deficit: Miliband must seize his moment on spending cuts

by Samuel Dale

It’s working. On Sunday, Labour took a seven point lead in an Opinium and Observer poll with 36% to the Tories’ 29%.

Sure, it could be a rogue poll, a one-off that misleads us all. Or maybe it is an example of what Damian McBride has called the rope a dope economic strategy while Labour Uncut editor Atul Hatwal said is Miliband’s attempt at triangulation.

With less than six months to election day Miliband has finally awoken from his deficit slumber.

Cut spending every year until the deficit is gone. Prepare shadow ministers for big cuts. Get debt falling by 2020.

Miliband’s speech on the deficit after the autumn statement was substantive. He finally admitted the next parliament would once again be dominated by cuts; deeper, more difficult cuts than this parliament.

It’s a far cry from his conference nightmare when he didn’t even mention it as part of his 10 year vision for Britain.

It is a huge relief for those of us calling for Labour to present a clear deficit reduction plan instead of burying its head in the sands.

Why has Miliband seemingly changed his mind? Firstly, Labour has been forced to change. It lost the debate on whether to spend your way out of recession. Then living standards started to rise, only just but leaving the cost of living campaign with less potency.

Secondly, George Osborne messed up. He outlined huge spending cuts and tax cuts that would reduce the state to 1930s levels.

It is scaring people and Miliband took his chance. Osborne opened up the space for Labour to seem seriously tough on spending cuts without being deranged.

Labour MPs now have genuine answers when asked how they will close the deficit: we’ll scrap it in five years without taking us back an Orwellian Wigan Pier.

But let’s not get carried away. Labour is still planning to borrow for investment and cut current spending slower – it is not matching Tory spending plans.

And we’ve been here before, of course. Miliband makes a small gesture on the deficit before losing interest and falling back to his comfort zone of higher taxes and business attacks. That can’t happen this time.

I wrote recently that Miliband’s lack of economic credibility was allowing Osborne to recklessly offer tax cuts to favoured voting groups.

To stop that happening, Labour must seize this moment and hammer home it’s deficit message next year.

Spell out some serious, specific cuts to spending. Something creative that saves billions, gets noticed and puts the cat among the pigeons.

Scrap the department of culture, media and sport saving around £1bn? Or cut tax relief for buy to let landlords, up to £5bn? Or freeze some in-work tax credits for years saving billions? Or totally reform pensions tax relief – again saving billions?

Osborne’s mistake and Miliband’s quick reaction have created a chance. A chance to close the 16 point gap on economic credibility.

Unfortunately there are signs Miliband feels he has now dealt with tough issues like the deficit and immigration and is ready to move back to the NHS in the new year.

But there is still much more to do on setting out his deficit plan; It’s the economy, stupid. Don’t lose interest this time, use this opportunity and seize the initiative on fiscal sanity. Carpe Defict!

Sam Dale is a financial and political journalist

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16 Responses to “Carpe deficit: Miliband must seize his moment on spending cuts”

  1. BenM says:

    Wait a minute…

    How is promising to cut, cut, cut for the next 5 years up to 2020 less deranged than Osborne’s ideologically driven plan?

    And why is cutting going to close the deficit after the next election when it has clearly failed to do so in this parliament?

    When will the austerians get it? Austerity has failed.

  2. John Reid says:

    Labours strategy seems to be, we’re better on the NHS, rhe arry cuts will be like the 30’s and most embaressing of all recall those Tories from the 80’s they had 3milluon unemployed, Thatcher smashed the miners, the poll tax, it’s pathetic, we are only 2 policies more popular than the Tories on at the moment, the NHS and Education,
    Even in 1983 we were more popular than the tories on a third issue, getting unemployment doen, and in 2010 we were more popular then the Tories on 3 issues, law and order, pensions and the NHS

  3. Madasafish says:

    Secondly, George Osborne messed up. He outlined huge spending cuts and tax cuts that would reduce the state to 1930s levels.

    So a politician tells the truth and reality as it surely is: and he has “messed up”? What a cynical interpretation and no wonder politicians and the political class are despised as a bunch of lying (true), thieving (true) chancers (true)…

    And then this article goes from sneering at Osborne for telling the truth to “To stop that happening, Labour must seize this moment and hammer home it’s deficit message next year.Spell out some serious, specific cuts to spending”

    Does anyone notice the unconscious irony?

    Happy Christmas to all…

  4. swatantra says:

    Labourlist’s weekly survey came up with the incredible conclusion that Mlliband is likely to win but not with an overall majority. Main threat is UKIP, more so than the Greens. But we know that already.

  5. Tafia says:

    The poll to which you refer – an Opinium poll for the Observer is almost certainly an outlier. UK Polling comments:- “The Opinium poll is the second one this week to show Labour’s lead growing, in fact it’s the third as there was also TNS. But there were also rather a lot of other polls that didn’t… there were another ten polls who the Observer has chosen not to mention. There was an Ipsos MORI poll this week (no change in lead), a ComRes phone poll this week (no change in lead), a ComRes online poll last weekend (shrinking Labour lead), two Populus polls (who have shown smaller Labour leads in their four post-Autumn Statement polls than their four before the statement) and five YouGov polls (whose post-Autumn statement polls have shown essentially the same Labour lead as those before).

    The final polls of 2014:-
    Populus: CON 35%, LAB 35%, LDEM 9%, UKIP 12%, GRN 4%
    YouGov/Sun: CON 32%, LAB 36%, LDEM 6%, UKIP 16%, GRN 5%

  6. Dan says:

    “tax cuts that would reduce the state to 1930s levels.”

    Come now, this is tosh and you know it. Percentage wise, the cuts put us (roughly) at about the same level of state spending as other European countries.

    “Unfortunately there are signs Miliband feels he has now dealt with tough issues like the deficit and immigration and is ready to move back to the NHS in the new year.”

    Yep, I’m almost certain, based on past behaviour, that this is the case. He makes a speech, crosses that subject off the list, then never mentions it again. Milliband and his team have been flitting from one lynchpin topic to the other for several years now, and I don’t see that changing at all before may.

  7. Tafia says:

    “tax cuts that would reduce the state to 1930s levels.” – Which is of course total bilge designed to scare old ladies, horses and small children. The ‘state’ for most of the 1930’s was roughly the same size percentage-wise as in the early noughties, so perhaps Labour should be saying ‘Tory tax cuts would reduce the state to levels last seen under the second Blair term’.

    Mind you, the people who dreamt this up are probably the same numbskulls who dreamt up the promise of raising the minimum wage to £8ph by 2020 without realising that at it’s current rate of growth the NMW will be near £9 by then anyway meaning that for Labour to honour their pledge they will have to slow down the rise in the NMW.

    Bit of ethnic polling reveals that Labour are losing support amongst BAME:-

    Nadolig Llawen a Blwyddyn Newydd Dda.

  8. Landless Peasant says:

    The DWP could be forced to stop chucking away Billions on unworkable nonsense and unnecessary salaries of un-needed staff that costs MORE than the actual Benefits they are paying! Why doesn’t Ed say something about the runaway inefficiency of the DWP? Stop wasting public money on such crap and you can afford to increase opur State Benefits to a reasonable, not to mention legal, amount. Or doesn’t Ed care about the poor or about the continual massive waste of taxpayers money?

  9. Landless Peasant says:

    @ Madasafish

    George Osborne wouldn’t recognise the truth if it fell on him. Austerity is a lie.

  10. John Reid says:

    Swatatntra, LAbourlist consists of either student politics, talking too themselves about what they believe, ignoring the fact the public doesn’t care, A token Tory like Gunnerbear who gets censored, or bitter old Trots, who as they realise that the party is never gonna be the one they want, come out with personal attacks, or twist the facts too cinvince themselves, that labour lost in 1983 as it wasn’t left wing enough, and that as Labour didn’t win the last election, it’s sign they were right that New labour wasn’t populat with the public, and that, they can criticise anyone since 1983 Whos tried to modernise the party, as being mistaken, as, it wasn’t the modernisation that won ot for us in 1997′ but the hard left,and they should have won in 1983′ and that they’ll do their best to sneer at labour now, as they’ll be happy to see us loose next year. As they can still defuse to believe it was their fault we lost in 1983′

  11. swatantra says:

    Strange you should say that because I think I’ve also been banned from LabourList, and I’m definitely not a ‘Trot’ or a ‘Torylite’. I can’t access LabourList ‘comments’ at all. Maybe I’ve been too critical of the leadership of Milliband and Company for the mouthpiece of the Labour Party to stomach. Still, LabourLists loss is Uncut’s gain

  12. John Reid says:

    of the 10 Elections in the last 41 years, the average Tory vote has been 40.6%, the average Labour vote has been 34.6%, of which Labour has formed 5 governments; and the Tories 4, with the Coalition as well

  13. Robert says:

    I disagree with Samuel. His approach would be political suicide. Everybody knows that the next five years will be difficult but there is no need to be masochistic.

  14. John Reid says:

    For once Swatantra, I agree maybe we should form , the west Essex ,labour group, lol.

  15. Swat and John if you are having the same problem on LL, it’s a Discus change that is probably hurting you rather than the LL admin. They changed the Discus login parameters and you will have to get a new ID through Discus.

  16. Landless Peasant says:

    Bollocks to Austerity. Eat the rich.

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