deficit « Labour Uncut

Posts Tagged ‘deficit’

Jonathan Todd on the challenge for the new shadow chancellor

07/09/2010, 11:30:53 AM

The Labour leadership election will, finally, end on 25 September. But the identity of the shadow chancellor will be unknown until 7 October, when the results of the shadow cabinet election are announced. 13 days after this the new leader and shadow chancellor will lead our response to the comprehensive spending review. “It is”, as a leadership contender has said, “an incredibly tight timetable for the new leader and their shadow chancellor to map out a policy that might yet determine how we are viewed for the rest of the parliament.”

The general election too quickly gave way to the leadership election. (Which should have started later and been shorter). With the end of the leadership election, the formal involvement in the shadow cabinet election of four of our would-be leaders begins. This is a grueling pace. But the new leader and shadow chancellor will need immediately to demonstrate economic literacy, which means robustly critiquing George Osborne and articulating a credible and appealing alternative economic approach. While this is challenging, there are some relatively simple points that are worth underlining. (more…)

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It’s time to offer real alternatives, says John Healey

01/09/2010, 04:10:43 PM

In its first few months the Tory-Lib Dem coalition has all but conquered the media with the message that tackling the deficit trumps everything. We have a government of deficit disciples who have narrowed the terms of political debate to create sufficient cover for an ideological drive to slash public spending and reduce the role of the state.

Labour is right to fight the government hard on this, pressing for impact from the savage spending cuts and regressive tax changes. But opposing the government is only one side to the task of leadership in opposition.

The least people will expect is for us to argue for alternatives and propose new Labour policies. There are economic alternatives to defying the deficit.

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A one-off wealth tax is radical but astonishingly popular, says John Underwood

16/08/2010, 07:00:23 PM

For over thirty years, the Glasgow Media Group has linked the analysis of media content with the processes by which audiences receive and interpret messages. It has worked across a range of disciplines and well beyond the normal academic boundaries of communication studies. It is not surprising, therefore, that the Media Group should now turn its attention to media coverage of the national economic “crisis” and the need for cuts.

In an article in today’s Guardian, Professor Greg Philo, Research Director and one of the leading lights of the Glasgow Media Group asks why – amidst all the discussion of the deficit – there has been so little discussion in the media of how much wealth we have in Britain. The truth, of course, is that we are the sixth richest nation on earth with total personal wealth of £9,000bn. As Philo points out, this sum dwarfs the national debt.

Naturally, this wealth is overwhelmingly concentrated at the top. The richest 10% of Britons own £4,000bn, an average of £4m for each of the richest households. The poorest half own less than 10% of Britain’s wealth between them.

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Economy: Sam Dale says we must stop apologising and start fighting back

14/08/2010, 11:00:51 AM

David Cameron and Nick Clegg have clearly made it their political priority to blame the recession and slow recovery on Labour.

Since the election there have been daily attacks on Labour’s economic record, with the government’s inheritance invariably described as a mess. Dave and Nick accuse Labour of economic incontinence and spending money it didn’t have. There was even the sinister suggestion – which should have caused far more offence than it did – that Labour employed a scorched earth policy before leaving office.

Peter Mandelson is portrayed as a madman throwing money around with no thought for the consequences. Dave and Nick simply can’t believe that Labour wanted to help a Sheffield firm in the recession. In their deficit-obsessed, warped minds, this is a total dereliction of duty. And, of the course, there was the ill-judged joke that Liam Byrne left for his successor, feeding the government narrative.

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Don’t go to war over the deficit, says Dan Hodges

29/07/2010, 09:35:19 AM

Compare and contrast. First, Ed Balls, on why he’s battling to win the leadership race:

“I will carry on fighting to stop unfair tax rises and the withdrawal of essential benefits, I will carry on fighting to defeat a coalition hell-bent on cutting public services, putting up VAT, cancelling new schools and turning recovery into a double-dip recession.”

Next, Pat McFadden’s speech to the Fabian Society:

“Had we won the general election there would still have been difficult decisions to come. Unless we absorb that, I believe there is a danger of being tuned out by the electorate. By contrast, acknowledging it increases the chance of our fight against what the government is doing being heard. ‘Fight the cuts’ is a tempting slogan in opposition, and there are indeed some that must be fought. But if that is all we are saying the conclusion will be drawn that we are wishing the problem away.”

Two statements, two weeks apart, highlighting one very big problem facing the party. Just what is our policy (or, come to think of it, our line), on the deficit? (more…)

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Today’s growth figures vindicate the action Labour took, argues Alistair Darling

23/07/2010, 02:30:44 PM

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 (more…)

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Labour must show it could cut the deficit and drive growth and the jobs of the future, argues Pat McFadden

23/07/2010, 10:49:13 AM

The Tories have a clear plan for their austerity programme which is to discredit Labour’s economic record, blame the situation they inherited from Labour for all the cuts they will make and suggest that anyone who doesn’t support their programme has no worthwhile economic proposition at all.

It is a plan which should be challenged at each point. But it would also be a mistake to suggest that anyone on the centre left who wanted to address the issue of the deficit was somehow endorsing the Tory plan. That isn’t true and would appear to suggest that there was no worthwhile difference between the plans on which Labour and the Conservatives fought the election.

Yet the difference between the two parties is being felt every day in issues from the abandoned school building programme to cancelled regeneration projects and support for key industrial projects such as the Sheffield Forgemasters plan to make Britain a key player in the worldwide civil nuclear supply chain.

Labour won power in 1997 partly because we had worked hard to develop economic competence, to move on from a reputation for having big hearts but soft heads when it came to the nation’s finances. We didn’t lose that focus in government. We presided over the biggest increase in GDP per head in the G7 between 1997 and 2009, even after taking into account the financial crisis.

Of course the global financial crisis and our response – designed to stop recession turning into depression – meant borrowing was raised but this was a choice, a judgement we made.

Labour fought the election on a plan to reduce the deficit over a longer timescale, with a different balance between spending reductions and tax measures and with key priorities protected. That plan would have required some tough decisions and there’s no getting away from that. We had already announced some spending reductions in the PBR last year and had proposed for example changes to civil service redundancy terms. But Labour’s approach would have been very different to the Tory plan now being rammed through, a plan characterised by deep cuts started before recovery is established, with no regard for the impact on the private sector or future industrial opportunities for the country.

Labour’s plan would have had, at its heart, an active role for Government in promoting growth and ensuring Britain tried to develop key capability in areas of future employment growth such as low carbon vehicles, the digital economy, green energy and other areas.

The Tory deficit plan pays no regard to these areas. This week’s document issued on this had little to say. In fact, in addition to cancelling the Forgemasters loan the Government seems to be giving up on plans for a Green Investment Bank. And their plans for abolishing the RDAs and cutting support for the regions will make recovery and growth even harder to achieve.

Cutting the deficit in the way they are doing is faith based economics, with the Tories playing the role of high priests and the Lib Dems displaying the zeal of the recently converted.

The challenge for the Labour Party is to address the deficit in a way that also includes a drive for the growth and jobs of the future. And that’s a far cry from what the Tories and Lib Dems are doing.

The Rt Hon Pat McFadden is MP for Wolverhampton South East and Shadow Secretary of State for Business

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Leadership candidates on Ken Clarke proposals and deficit

02/07/2010, 12:45:00 PM

This week’s prime minister’s questions posed at least two questions for Labour: first, how to react to Ken Clarke’s prison proposals. Second, whether to take up David Cameron’s invitation “to engage in this debate (on deficit reduction), rather than playing this pathetic game of pretending there wouldn’t be cuts under Labour.”

Some Labour contributions to PMQs and Jack Straw’s article in the Daily Mail suggest that we are about to attack Clarke from the right. Steve Richards, who chaired Wednesday’s leadership hustings in Lambeth, has since dismissed this as madness. Different views have been expressed on Labour Uncut. But what did the candidates have to say to Lambeth on this?

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Jonathan Todd sorts the economics from the ideology

16/06/2010, 09:13:43 AM

The Daily Telegraph isn’t normally essential reading for Labourites. But yesterday it should have been, especially for Harriet Harman. Fraser Nelson set the backdrop to the politics of the deficit and the “emergency” Budget, to which she, as acting leader, will respond. This week’s report from the new Office of Budget Responsibility (OBR) dramatically changes this political context. Nelson has been quick to realise this and, while our instincts differ markedly from his, we need to be equally fleet-footed.

The limited discussion on the deficit in the leadership election has denied our candidates the opportunity to demonstrate this quality. Though, of course, they could engineer such an opportunity for themselves. I’d be impressed if any of them do flesh out a more substantial economic platform, not least as The Economist is right to note that, “nothing will make or break the next leader of the opposition like his response to the government’s austerity programme”. (more…)

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Jonathan Todd on the emerging politics of deficit reduction

24/05/2010, 12:01:51 AM

The deficit must not become the elephant in the room of Labour’s leadership election. Labour needs economic credibility to form the next government. Good candidates should – among other things, obviously – demonstrate that they would provide the leadership necessary for this credibility.

The deficit will define much of the politics of this parliament. The temptation will be great for Labour to duck its tougher questions. This won’t just be because ducking is always a tempting response to tough questions, especially questions as tough as those raised by public spending cuts. Temptation will also derive from a Labour reading of the future that is so optimistic that it risks complacency. On this interpretation, the deficit will require the coalition to do deeply unpopular things and a horrified electorate will therefore rush to the comforting embrace of Labour government on the next occasion that they are offered the chance.

This analysis seems to come recommended by Mervyn King. The Governor of the Bank of England is said to believe that the present parties of government will be forced into such extreme austerity measures as will keep them out of power for a generation. But this thinking has a worryingly “one more heave” characteristic to it. It tends towards a view that simply says: “We told you the Tories and Liberal Democrats were horrible and they are now being horrible. Come home to Labour.” (more…)

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