Labour had a strategy for cutting the deficit – it was called GROWTH. The government’s strategy was to cut spending. The consequence of those cuts is undermining growth, and that now risks blowing apart the deficit reduction.
In last week’s figures, retail sales for the month of May slumped to their lowest level in 16 months. There is a risk that growth is about to stall.
The OBR provided a pre-June Budget prediction of the 2011 budget deficit under Alistair Darling’s budget. So, with our libraries still open, with EMA, with future jobs fund, no VAT rise etc, the borrowing in 2011 would have been 8.3%.
OBR June 2010 predictions based on Labour’s deficit reduction plan
2010
2011
2012
2013
2014
Growth
1.3
2.6
2.8
2.8
2.6
Borrowing
10.5
8.3
6.6
5
3.9
Unemployment
8.1%
7.9%
7.4%
6.8%
6.3%
Since the June emergency budget, the OBR has consistently downgraded 2011 growth, and increased its prediction of government borrowing. The graph shows the changes.
The current predictions for growth of 1.4% will result in borrowing of 8.1% of GDP, just below that predicted for Alistair Darling’s budget. But, if growth falls to 1.1%, then the government’s cuts will not only all have been in vain, the cuts could plunge the economy into a Japanese-style high deficit deflation.
This week shadow culture secretary Ivan Lewis takes the Uncut hot seat
What was the last film you saw in the cinema?
The King’s Speech.
What was the last piece of music you bought?
Taylor Swift – Speak now – Came highly recommended by my 14 year old son.
What is the best thing about being British?
The NHS which is unique and should never be taken for granted.
Which current non-Labour MP to you most admire and why?
Norman Lamb – Because before the last general election unlike Andrew Lansley he was genuinely willing to seek a consensus on the future of social care.
Do you believe that the message of socialism alleviating inequality will be heard in our lifetime?
It is heard by many in the world but the challenge is for us to use language and adopt policies which persuade the majority that it is not only morally right but in all of our interests.
What is your most irrational fear?
Eating an olive!
What is your favourite meal to cook yourself?
Ivan Lewis. Epicurean.
Parsnip soup and bagels with red Leicester cheese and sweet and sour pickled cucumbers. Sad but true.
Which labour politician, living or dead, do you most admire?
Alan Johnson (very much alive!) – A remarkable life’s journey – and no I am not after any of the royalties from his book…
Is it wrong to hate tories?
Yes, because hate is a word to be used sparingly if at all. But also we need to win back many people who voted Tory at the last election if we are to form a Government in the future.
Denham overtakes Balls in last hour of voting to win by less than 2%
In a dramatic last gasp victory, John Denham overtook long time leader Ed Balls to win the shadow cabinet goal of the month. Denham received 36.5% of the votes cast compared to Balls on 34.6%.
Andy Burnham was third with 19.2% with John Healey on 5.8% and Douglas Alexander on 3.9%.
Since voting started on Friday, John Denham and Ed Balls were level pegging in the public vote until Balls opened up a narrow lead late on Saturday. Balls seemed set to hold on for victory only to be overhauled by John Denham in the last hour of the competition.
The closeness of the vote is in marked contrast to last month, where Ed Balls’ winning margin was over 40%.
Denham’s victory comes off the back of securing his first urgent question since the shadow cabinet was formed.
By moving quickly on the morning of 10th May and tabling the urgent question, John Denham was able to force David Willets back to the Commons to take the question. The resulting exchange meant Denham featured heavily in the night’s news bulletins and managed to pick-up May’s goal of the month.
Not bad for a morning’s work.
Over the past few months, John Denham’s performance has been something of an enigma. While clearly talented and blessed with a commanding baritone, ideal for the chamber, he has only sporadically demonstrated his ability.
In terms of work rate in the House of Commons, John Denham has barely broken a sweat. Before May, he had tabled a total of 11 written questions, asked nine oral questions and made 5 speeches at the despatch box. For the shadow secretary of state for Business, a department fraught with crisis, this is far from stellar performance.
But outside of Parliament, it’s a different story.
John Denham has issued a stream of press releases and comment on stories, securing media profile that makes him one of the most familiar shadow cabinet faces on our TV screens.
What made Denham’s goal of the month a cut above his previous work was the way it combined activity in the House of Commons with media coverage outside of parliament.
Putting down the urgent question not only held Willets to democratic account, it created a parliamentary occasion that broadcasters could use in their news packages.
This one-two of using parliament as the spring board for media coverage was a model of how to hold the government to account. If John Denham can repeat this in the coming weeks, Vince Cable will soon be back where he belongs – vying with the likes of Chris Huhne, Ken Clarke, Andrew Lansley and Michael Gove for the title of cabinet gaffer.
Which current non-Labour MP do you most admire and why?
Iain Duncan Smith. He had a terrible time as Tory leader but has had the personal strength to bounce back, which I admire. Also, even though I don’t agree with many of his reforms, he came to Glasgow and seems to have had an awakening about poverty.
Who was your first crush?
Julie Dickson aged six. We used to share our school packed lunches. Then she emigrated to Canada and broke my heart. I don’t remember getting the chance to say goodbye.
What is the best thing about being British?
Tolerance – we are not a nation of extremes.
Describe David Cameron in three words.
Confident but arrogant.
Do you believe that the message of socialism alleviating inequality will be heard in our lifetime?
Yes it will be heard, but politics is about turning words into action – that’s the bigger challenge for Labour (more…)
We made a back of an envelope prediction last month about what we expected the outturn to be and plumped for £135bn on the basis of the arguments we have persistently been making about the dividend from the previous government’s stabilisation of the economy and the growth it enabled.
The OBR also had its chance in the March 2011 budget – with all those models and only eight days left of spending before the end of the financial year – to make their prediction. They went for £144bn. Well, we’ll have to split the difference. The outturn for 2011 was (again) lower, thanks (again) to Labour’s growth dividend.
So the previous Labour government’s strategy of growth-supportive deficit reduction reduced the deficit from a prediction in March 2010 £163bn to today’s outturn of £141bn; a reduction of £22bn.
The new government’s strategy of cutting growth to crowd in private sector investment has meant that the OBR has added a further £35bn that this government will borrow over the lifetime of this parliament. And given that the OBR record is to be wrong, about 10% or so out, this could be a lot higher.
It’s distasteful that the benefit cuts of £7bn were justified by the OBR’s prediction of a £149bn deficit. That June prediction was wrong by £7.9bn – enough to pay for those benefit cuts. We wonder if they will sleep well tonight in the north Oxford beds.
On re-reading this article, I find that, not for the first time, I’ve been too harsh on Douglas Alexander. He’s not making the calls, Hague is. He’s got the difficult task of reacting very quickly to a fast changing policy. So I regret the harsh tone of the piece. Sorry Douglas. To be fair, I should have said how he completely exposed coalition incompetence in the early days of the conflict over the evacuation. But I’m seriously worried about mission creep. And parliament hasn’t been consulted. Ministers should be held to account.
Whatever else you may say about Watson, he is never short of surprises.
In a runaway victory, Ed Balls received 56% of the votes cast in the inaugural shadow cabinet goal of the month competition for his Commons annihilation of Osborne lackey, Matthew Hancock.
Douglas Alexander was in second place with 14% of the vote for his despatch box humiliation of William Hague with Jon Healey third on 12% for his story on £1bn of cuts to health budgets. Yvette Cooper and Jim Murphy were tied in fourth on 9% each for their respective nominations on police cuts and Commons urgent questions to the MoD.
The face-off went out live just before 2pm on the 24th March but with a tiny audience. Before featuring in the Uncut goal of the month competition, Balls’ exchange with Hancock had been a hit in the Westminster village.
A senior Tory public affairs operator remarked that Balls “dishing Hancock” had even generated “a lot of online buzz” in Conservative circles, where Hancock is viewed as promising but inexperienced and prone to arrogance.
For those in the country who managed to see it on the Parliamentary channel, the reaction was immediate. Posting in the comments section of the Uncut piece, Mark Allen, a constituent of Hancock’s in West Suffolk, recalled,
“Remember watching it live and had to rewind the skybox and the wife in to watch…Car crash TV for the Tories”
The impact on Hancock was revealed the day after his mauling. In an unusual move, he was driven to comment on his website to try to have the last word on what had initially been a minor parliamentary intervention on shadow chancellor.
But it was notable that he didn’t directly deny any of Balls’ string of charges.
Victory in the goal of the month competition caps a weekend of football related success for Ed Balls. His beloved Norwich City beat Nottingham Forest to move within one point of automatic promotion from the Championship.
Its progress he will be hoping to replicate in his brief as he continues to take the fight to the Tories.
At the 1992 election, Scotland was one place where the Tory-loving Sun didn’t publish its “If Kinnock wins today will the last person to leave Britain…” front page.
The paper’s infamous attack on Labour would have been wasted on Scottish voters. Instead, Rupert Murdoch’s favourite tabloid switched support from the increasingly toxic Tories to the SNP. The objective, though, was still the same – to stop a Labour government at Westminster.
Fast forward nearly two decades, and we see that history may be repeating itself. The Daily Record political editor, Magnus Gardham, reveals in his blog that News International is hosting a “business breakfast” with first minister, Alex Salmond. It’s an offer that certainly isn’t open to other party leaders during the campaign.
In recent weeks, Murdoch’s Sun has splashed on celebrity endorsers for the SNP and attacked Labour at every opportunity. So it’s odds-on they’ll support the SNP – or at the very least Salmond – by polling day.
Magnus also highlights how this SNP Scottish government has not challenged the Tory-led coalition with the same vigour as they did the previous Labour UK government.
For example, there was no fight-back from Salmond over a recent clampdown on finances by Danny Alexander. According to Magnus, the treasury bean-counter informed SNP finance secretary, John Swinney, that the Scottish government could no longer hold on to unspent cash at the end of the financial year.
Magnus notes that “in days gone by, Salmond would have trampled folk underfoot in his haste to reach the Holyrood chamber for an angry emergency statement”. But not under a Tory government, it seems.
Obviously, there are huge questions about how our print media does actually influence voters these days. As Alastair Campbell reminds us in his blog, the Tories ended up with just one seat north of the border at last year’s general election, despite the Sun supporting them devotedly in Scotland.
The real problem for both the Sun and the SNP is one of credibility. The gymnastics performed by the Sun are of Olympic proportions. Only four year ago, the paper ran an election day splash with the headline “Vote SNP today and you put Scotland’s head in the noose”.
This time round, the Nationalists could find the Sun’s support extremely counterproductive, given that the paper is also supporting the Tories in its other UK editions.
The Scots are too canny to be taken in and will see through Murdoch’s motives. Endorsement from News International for Alex Salmond, the SNP or for both isn’t about what’s best for Scotland. It’s all to do with what’s best for the Tories at Westminster. And the last thing David Cameron wants is Labour first minister in Holyrood fighting for the things that really matter.
Joint statement by MPS Acting Deputy Commissioner John Yates and the Director of Public Prosecutions Keir Starmer QC:
There has been a significant amount of interest in recent weeks among the media over understanding of the complex law in respect of phone hacking, particularly in relation to the prosecutions of Goodman and Mulcaire. We have both written to, and appeared before, the relevant Parliamentary Select Committees providing detailed evidence on this matter to give an account of our best understanding of what took place five years ago.
Neither of us had responsibility for this case at the time it was originally prosecuted. We have, therefore, both sought to interpret, as best we can, the original documentation and the recollections of those involved. The relevant information is now in the public domain.
We, and others in our organisations, would now like to focus together on the current investigation, in the same way that we work closely and constructively on a daily basis on numerous other cases and complex issues.
