What about the deficit Ed?

by Peter Watt

I didn’t see “the speech” as I was working.  I experienced it through the lens of twitter as I journeyed home from work at about 7pm.  The general consensus several hours after Ed had finished speaking seemed to be that it was a virtuoso performance with even fierce critics saying that the conference hall loved it.  I actually didn’t see any of the performance until the 10pm news and the clips that I saw seemed  pretty good to me.  What’s more, the faithful clearly loved it and the professional commentators either loved it or accepted that Ed had looked prime ministerial.

Wednesday morning’s radio and newspaper reports continued in this vein with Ed being lauded both for the performance and for the political positioning.  One nation Labour was seen as a clever and bold move that achieved two things.  Firstly it moved Labour tanks onto the Tory lawn.  And secondly it was a useful way of packaging Ed’s central message.  As he said in his post speech email to members:

“That means a one nation banking system: banks that work for all of us, not gamble our savings in casino operations.  It means a one nation skills system: a gold standard of vocational education which leads to many more apprenticeships which give opportunities to those who don’t go to university as well as those who do.

It means building a one nation economy with rules that encourage long-term investment.  It means keeping the United Kingdom together, making immigration work for everybody and recognising that at the moment it does not, and standing up for the values of the NHS.”

And, as someone who has written about the need for a vision and for Ed to work hard at being “prime ministerial” I am delighted.   Throw in the fact that Ed’s most effective attack lines were on governmental incompetence rather than on usual banal “nasty Tory” nonsense and I couldn’t have wanted for much more!

I know that others have said that it was policy light and that it didn’t actually say much.  But to be honest I think that at this stage of the game being seen as a credible potential PM and offering a bit of vision is more important than the odd policy.  Of course it was just one speech and was hardly watched by anyone.  But it will have increased Ed’s confidence, the Labour party’s confidence in him and will have unsettled an already wobbling Tory Party.  All in all, not a bad days work!

And the consequence of all of this is that the media will begin to take the prospect of prime minister Miliband seriously.  They will therefore begin to look more closely.  Here is the thing that team Miliband need to watch.  It is the one thing that he definitely didn’t mention in his speech.  In fact it has hardly been mentioned in Manchester at all.

The deficit.

To be fair, Ed Balls mentioned it in his speech when he said:

“But conference, as I said to the TUC, we must be upfront with the British people that under Labour there would have been cuts and that – on spending, pay and pensions – there will be difficult decisions in the future from which we will not flinch.

Before the next election – when we know the circumstances we will face – we will set out for our manifesto tough new fiscal rules to get our country’s current budget back to balance and national debt on a downward path.”

But beyond that you are struggling to find references to it from the platform in Manchester.  In fact the overall message from Labour in Manchester was essentially talk about anything other than the deficit.  Ed Balls may have had one tough paragraph but that was in sea of traditional Labour packaging in the rest of the speech.  The headline was 100’s of 1000’s of houses paid for by selling 4G licenses.  Lots of lovely new stuff with no nasty consequences.   There was lots of talk of growth being the answer – again getting the deficit down with no pain.

Ed Miliband gave a vision that was soft and cuddly and lovely and was politically very clever.  He delivered it well – but it was all pretty much pain free.  So vote Labour and the pain will go away.  But this is of course not true and Ed and Ed know this.

Now, Labour cannot be expected to set out detailed spending plans.  But that is no excuse for not being honest about the inevitable consequences of having to impose further cuts in public spending way into the next parliament.  So Labour should be honestly talking about the choices that will need to be made on universal benefits provision, ever expanding health care costs or on welfare spending.  Labour should be honestly acknowledging that the services that people have got used to for years may need to be challenged as we work to reduce the deficit.  And that that will be the case even when our economy returns to growth.  Labour should be honestly admitting that there are no pain free options that do not involve unpopular cuts to things that the state currently does together with increases in taxation that will impact on millions.

In France, President Hollande won an election by claiming an end to austerity.   I’m sure that if you look hard enough at what he said then you’ll find a reference to ‘tough choices’  But there is little doubt that the electorate thought that he was offering an end to the pain the others were offering.  And then, having won the election, he announced a budget involving 10 billion euros of cuts to public spending and 20 billion euros of tax rises.   And Labour in Manchester appeared to be trying to play the same game.

But one nation Labour is surely better than this?  Surely we are not going to try and pretend to the electorate that we can make the deficit go away without consequence?  Surely we’re not going to try and disguise what we know that we would have to do with promises of some new houses and a bit of bashing of the rich?  Surely we are going to paint a picture of a better Britain without being honest about what we will need to do to rebalance our economy?

I hope not, because to attempt to do this would be immoral, duplicitous and deceitful even if we thought it was clever politics.  And what’s more, with Ed now being seen as a potential prime minister you can be sure that neither the Tories or the media will let Labour get away with it.  But most of all it wouldn’t be “one nation”.  It would be the same old sectarian tribal politics that Ed said that he wanted to end.

Peter Watt was general secretary of the Labour party

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13 Responses to “What about the deficit Ed?”

  1. Nick says:

    No mention of the debts either.

    No doubt when he gets around to it, debt will mean borrowing only.

    ie. We’re not going to tell you about the pensions. We want your money but we aren’t going to pay our side of the bargain.

    The something for nothing society.

    Interestingly, I’ve come to the conclusion that its fraud. The relevant section is section 2 of the fraud act.

    Since the treasury have admitted in an FOI request they plan to default by changing the law on state pensions, it means that the current pension is a legally enforceable debt.

    To induce people to contribute voluntary contributions by false accounting [not putting the debts on the books] it makes it fraud.

  2. BenM says:

    The Tories thought they could close a deficit by cutting spending.

    They were wrong.

    The deficit is going up under their watch. It is up by 22% so far this year.

    Ed did mention that specifically in his speech.

    The Tories and many of their outriders throughout the media and wider electorate buy the simple but erroneous analogy that government finances are as straightforward to run as a household’s.

    Reality shows how wrongheaded this is.

    If you want to close a deficit, you have to get the economy growing. Focussing on spending is utterly futile. Might be good politics, but economically it is wrong.

    An honest government would point this out. We don’t have an honest government, nor an honest opposition. If Labour buys into the Tory theme, the country will suffer twice over.

    The day the economy frecovers will be delayed by many more years and in the interim many more people will suffer as a consequence.

    Austerity is a bad, foolhardy policy idea.

  3. aragon says:

    To be fair he has since said ‘There is no money’. I wonder where he got that line ?

    North/South divide – No more money
    Public sector wage freeze – Jobs before wage increases no more money.

    Of course if you are a Keynesian or a heterodox economist this is nonsense.

    I think this is a disaster for the labour party who will continue to pursue a neoliberal agenda, after all Ed Balls wants to give a discount to people who can afford to buy houses, (not the most needy people in society) and wants by implication to further inflate the already over inflated house prices.

    Governments are sovereign so while subject to the law of the land they are not subject to simple hard money model you appear to advocate.

  4. Rallan says:

    Don’t worry about it. I mean, did you expect actual issues to be addressed? It’s all just vague politicking at the moment, and to hell with the duty of opposition. No interest in offering positive plans at this time. It’s all dull, hollow and meaningless talk + easy sound-bites.

    Nothing interesting happened, nothing important was said or was ever going to be said. No-one outside of Labour Party fans & political journalists was listening. Result? A few headlines that will cheer the faithful and be forgotten tomorrow by everyone.

    Even when the Labour conference does get round to talking policy and real issues (which will wait till it suits you, apparently), no-one in the real world is going to believe a word of it. Likewise the party manifestos. And pretty much everything said at any time by anyone from the main parties.

  5. iain ker says:

    Peter, mate, for the honey-drenched mercy of jesus do you believe that tripe you have written in the first seven paragraphs? (as much as I could stomach).

    Ed Bandwagon will never, ever, ever be PM of this country.

    And the longer people like you delude yourselves otherwise, the longer your party will stay out of power.


  6. swatantra says:

    As usual Peter states the bleeding obvious but a lot of our members simply close their eyes and see things through rose tinted glasss. The deficit will not go away by just wishful thinking and crossing ones fingers. What we deparatey need are pragmatic politicians and the politics of realism. And yes socialsm and Labour are all about ‘priorities’ but, we also need to be more canny and make sure that we don’t pour money down the drain on useless projects and useful restructuring. Results and improvement in our lives really do matter.

  7. Allan says:

    To be fair, tough choices is all that the “Scottish” Labour leader has been banging on about since last week, alongside other phrases like “Something for nothing” and “the end of universal benefits” – phrases that will ensure a third straight defeat for “Scottish” Labour in 2016. But enough about a part of the country where “One Nation” seems to mean something completely different to everywhere else.

    I suspect that Milliband & co are essentially waiting to see what state the country’s finances are in before commiting to any pledges. That’s not to say that there are things that they should be pressing for, the speeding up of the Lib Dem’s raising of the Tax threshold for one thing (accompanied by tax cuts at the bottom of the ladder). Oh and Ball’s shouldn’t have signed up to Osborne’s Scorched Earth policy so readily.

    I still think that Cameron’s Tories will finish as at least the largest party come 2015, but things are a wee bit more interesting – as if having a referendum six months before a Westminster election wasn’t interesting enough.

  8. Robert says:

    How many times do people have to say something? Is vote Labour for pain a good election slogan?

    The statement by Balls was pretty clear to me. There will not be much money after 2015. Any extra public spending will need to be paid for with higher taxes. People want parties to be realistic but I am not convinced that they want masochism.

  9. Amber Star says:

    What about the deficit, Peter? I mean the elderly, the disabled, those with learning difficulties, Ed promised that they would not pay for cutting the deficit. That public sector workers will not have their pay unfrozen. They will pay for it. That those who can work will work to pay for it. And that the broadest shoulders, i.e. people like me, will carry the heaviest burden.

    He covered you & yours in the first bit. The elderly, the disabled, those with learning difficulties won’t be expected to pay. What do you want from him? A pledge signed in blood saying: Everybody else will have to make a million sacrifices to pay off the deficit but Peter Watts’s life & the things which Peter thinks are important will not be affected.

    Ed Miliband could NOT have been clearer. People like me will be paying for the deficit. We will work longer, pay even more taxes & have enough (no more) to live on when we eventually retire; we will have less access to health care & will have to get in line behind the very elderly & infirm when we need hospital treatment.

    We’re still going to vote for him. He’s not Tony Blair. He doesn’t have to promise us an American style, get filthy rich, dream. We’ll settle for less so that our kids & their kids have something to look forward to, even if we don’t. We get it. Ed’s made it very clear. Now why not get off his case?

  10. john p reid says:

    Benm, but by cutting spending it may have not let the deficit get even bigger, and wasn’t that waht ALISTAIR Darling was going to do,

  11. james says:

    Yes but how Amber and who and for what purpose?

    What you’re saying is that he’s not a million miles off of what Nick Clegg’s saying yet won’t be explicit about it.

  12. Henrik says:

    With the best will in the world, chaps, he’s already *got* your tribal vote. The magic lies in persuading ordinary folk to vote Labour and he’s going to have to be a damn sight more inspirational than the showing to date to achieve that.

    I know, Tory troll etc etc – except I’m not a Tory and I do rather like the idea of a competent and assured Opposition to generate an alternate vision.

  13. uglyfatbloke says:

    Allan is dead right – things are interesting. It’s not that Lamont was entirely wrong, but she is a senior person in a party that advocated some pretty useless big-ticket items The wars. trident and the replacement tank programme spring to mind. Free prescriptions or a submarine-based weapon that actually belongs to someone else (the missiles are only leased) and that you could n’t use even if you wanted to? I think free prescriptions are probably a better bet really.
    And then there is the referendum….at the moment ‘No’ is stronger than ‘Yes’, but how long will that last? The gnats have two huge advantages….Scotland does n’t want another Tory Government that it did n’t vote for and the ‘Yes’ campaign is led by Alistair Darling. Like it or not, the ‘No’ campaign is already seen as a Tory issue and having it headed up by a wealthy public-school type is not going to help change that perception. This two factors – one real and one perceptual – may not be enough to swing the referendum, but they are not going to make things any easier.

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