Ed Miliband: coalition is squeezing the middle not the deficit

Miliband will say that Britain needs a recovery for working people if the government is to 'squeeze the deficit and not the middle'.

Miliband will say that Britain needs a recovery for working people if the government is to ‘squeeze the deficit and not the middle’

The failure by the Conservative-led coalition to tackle the cost-of-living crisis has cost the country £116.5 billion, leading to higher borrowing and broken promises on the deficit, Ed Miliband will say tomorrow (Monday).

The figure, equivalent to £4,000 for every British taxpayer, is based on new research from the House of Commons library and published by Labour.

The research shows that, because of the government’s failure to tackle the structural problems behind the cost of living crisis, income tax receipts have fallen short of forecasts by £66 billion, National Insurance contributions are £25.5 billion lower than expected and spending on social security is £25 billion higher than planned.

As well as highlighting this, at an event in Nottingham on Monday Ed Miliband is expected to say that for millions of families this is a ‘ joy-less and pay-less recovery’:

“For a very long time, our country has worked well for a few people, but not for everyday people.

“We live in a country where opportunities are too skewed to those at the top, where too many people work hard for little reward, where too many young people can’t find a job or apprenticeship worthy of their talents, and where families can’t afford to buy a home of their own.

“For all the government’s boasts about a belated economic recovery, there are millions of families still caught in the most prolonged cost-of-living crisis for a century. For them this is a joy-less and pay-less recovery.”

In highlighting the consequences of the government’s failure to tackle low pay, stagnant salaries and soaring housing costs, Miliband will say that Britain’s public finances have been weakened by coalition policies. He will also talk about how addressing the so-called ‘cost of living crisis’ and paying down the deficit are not mutually exclusive:

“Building a recovery that works for everyday people is the real test of the Autumn Statement.

“But that isn’t a different priority to tackling the deficit. Building a recovery that works for most people is an essential part of balancing the books.

“The government’s failure to build a recovery that works for every-day people and tackle the cost-of-living crisis isn’t just bad for every person affected, it also hampers our ability to pay down the deficit.

“Britain’s public finances have been weakened by a Tory-led government overseeing stagnant wages which keep tax revenues low.

“Britain’s public finances have been weakened by Tory policies which focus on low paid, low skilled, insecure jobs – often part-time or temporary – because they do not raise as much revenue as the high skill, high wage opportunities we need to be creating.

“And our public finances have been weakened by higher social security bills to subsidise low paid jobs and the chronic shortage of homes.” 

In making the speech, Miliband will draw on new research commissioned by Labour from the House of Commons library, which shows that the total shortfall in income tax receipts over the Parliament between what was forecast in November 2010 and the latest forecast and outturns is over £66 billion, taking policy changes since then into account (click the graph to zoom).

Income tax receipts

The OBR has attributed a shortfall in income tax receipts since 2010 to “lower wages and salaries” as well as “lower self-employment income and the effect of income shifting related to the reduction of the additional rate of income tax to 45p”.

Labour will also highlight the fact that receipts from National Insurance Contributions are expected to be £25.5 billion lower than forecast in 2010.

National Insurance

Despite the supposed ‘get tough’ approach of the government when it comes to welfare, the number of people needing to claim housing benefit has risen by over 400,000 between May 2010 and May 2014, with the growth of low-paid jobs resulting in more money being paid out in social security to people in work.

Housing benefit

Tax credits

As a result of all of this, the Tory-led government is now on course to borrow around £190 billion more than planned in 2010. It has also now borrowed more in four-and-a-half years than the last Labour government did in 13 years. As Miliband will say:

“The result has been David Cameron and George Osborne missing every single target they set themselves on clearing the deficit and balancing the books by the end of this parliament.

“Their broken promises, their abject failure, are not an accident. They are the direct result of an outdated ideology which says all a government has to do is look after a privileged few at the top and everyone else will follow.

“That is why this government has done a great job of squeezing the middle, but a bad job of squeezing the deficit.

 “The test this week for David Cameron and George Osborne is whether they recognise that Britain will only succeed and prosper for the long term by tackling the cost-of-living crisis and building a recovery which works for the many, not just for a few.

“Or whether they will just offer more of the same old ideas that have failed them, failed everyday working people, and failed Britain over the past four years.”

James Bloodworth is the editor of Left Foot Forward. Follow him on Twitter

29 Responses to “Ed Miliband: coalition is squeezing the middle not the deficit”

  1. robertcp

    Labour really needs to make sure that everybody knows that the deficit is still more than £100 billion. A lot of pain has been inflicted for very little gain.

  2. swat

    If its not hurting, then its not working, but we should be hitting the well off, not the hard working squeezed middle. The wealthy keep on whinging about tax, but all they have to do is cut out the champagne the faberge eggs and the rolex watches.

  3. Selohesra

    The Left would do well to steer clear of arguing on the economy – that is not an area that most of the electorate feel they have any competence or credibility. Labour’s recession trashed the economy and we all have to suffer to get the country back on an even keel

  4. Dave Stewart

    Labour did not cause the GLOBAL recession which started in the US. Stop repeating this nonsense. Granted Labour policy didn’t help and allowed our banks to become dangerously exposed to calamity but at the same time the Tories were egging them on to go much further.

  5. madasafish

    The reality is that a Labour Government would do little different. Yes it would tax the rich a bit more (but actually raise little money as the rich are mobile and have tax advisers). The rhetoric would be different.. but Ed Balls has basically admitted – by hsi actions – that his first policy of borrow more and spend more – will not work.

    As for the last paragraph :“Or whether they will just offer more of the same old ideas that have failed them, failed everyday working people, and failed Britain over the past four years” Change to the” four years” to “thirteen years ” and it’s just as applicable to Ed Balls and Labour.

  6. Norfolk29

    Will you be publishing a decent photo of Ed Miliband? Say one as good as the one of Cameron at the top of this article. The Media rarely failed to publish a bad photo of Cheri Blair during the 10 years she was at 10 Downing Street and she never sought to complain of this bad treatment. Ed Miliband is also subject to this form of slur but has an intellectual scorn of it. Can we please, in the six month run up to the election, always ensure that only good photos of Ed are published, even if they need to be retouched.
    As for his speech, it is about time he got himself heard. He follows on in the tradition of Labour leaders who will be better in office than in opposition (Wilson and Blair were the same) and it requires a decent image to persuade some people of his worth.

  7. Norfolk29

    Especially the unemployed and handicapped, single parents, anyone with a spare bedroom formerly used by a child now away at Uni, or as a soldier in Afghanistan. The coalitions view of the need for austerity would make Margaret Thatcher renounce her membership of the Tory Party.

  8. Cole

    ‘Labour’s recession’? I thought it was a worldwide phenomenon, caused mostly by irresponsible bankers..

  9. robertcp

    I agree about hitting the wealthy. The coalition has never recovered from cutting the top rate to 45%, which was one of the most stupid policies of all time.

  10. Sick and tired of you all

    Presumably you’re equally happy to admit, therefore, that the Euro slump has impacted significantly on our economic growth.

    Osborne every bit as much a victim of circumstance as Darling.

    The day the finger pointing stops on both sides and intelligent people work for each other the good of the country instead of making cheap jibes is teh day we might just have a chance.

  11. sarntcrip

    STILL SET TO BULLY AND HUMILIATE THE MOST VULNERABLE WITH MASSIVE CUTS TO SOCIAL CARE AND20%REDUCTION IN DISABILITY BENEFITS BY THE IMPOSITION OF PIPSTHE BUDGET FOR WHICH IS 20%LESS THAN DLA DON’T FORGET THEY SCRAPPED THE INDEPENDENT LIVING FUND TOO ALL = MORE DEAD DISABLED

  12. sarntcrip

    THE SQUASHED BOTTOM ARE STILL BEING HIT THE HARDEST
    THEY WISH THEY WERE IN THE SQUEEZED MIDDLE

  13. sarntcrip

    YOU CLEARLY HAVEN’T READ THEIR POLICIES

  14. robertcp

    I agree.

  15. sarntcrip

    H TO BE PART OF THE WHINGEING WELL SQUEEZED MIDDLE
    the genuinely sick and disabled, now a uk underclass thanks to the Tories, have made by far the biggest pricefor austerity in services and incomeFACTMOSY OF THE SQUEEZED MIDDLE VOTED TORY SO THET ARE REAPING WHAT THEY’VE SOWN
    want to swap

  16. Ian Duncan

    Typical fucking New Labour. The very poorest have the ones to get hammered by these bastards in government, not the middle.

    But I guess there’s no votes worth chasing from the very poor so Even Newer Labour can just ignore the sick and disabled etc., unless they need a political football as they did towards the end of their last reign, then it’ll be all ‘tough on welfare’ this, and ‘cuts must be made’ that. Then the new version of James Purnell will come along with a new version of Atos and a new version of David Fraud.

    When Ed Milquetoast wonders why his turnout is desperately low in May, revisit this post. Labour have take us for granted for long enough now, the downward trend in Labour voter turnout looks set to increase unless Labour rediscover their balls and their roots and maybe find a new leader while there’s still time and dtch this insipid decaf Tory usurper.

  17. Leon Wolfeson

    That’s not even that significant compared to the low taxes on capital and the massive collection gap on corporation tax.

  18. Leon Wolfeson

    So you speak for Labour. Well well, thanks Mr. Labour Spokesman.

    And of course you think Thatcher did great things. Oh wait no, you’re well to the right of her.

  19. Leon Wolfeson

    Ah yes, and your Coalition’s depression, which you caused, and then you call for further punishment and austerity to make things worse, as you frantically try and stop stabilisation.

  20. Leon Wolfeson

    Indeed. Thatcher pushed people onto the disabled lists. The Coalition are harassing people on them and pushing people off.

  21. Leon Wolfeson

    Why should the Coalition’s entirely unnecessary depression be given a pass?

  22. Sick and tired of it all

    Point well and truly missed.

  23. Leon Wolfeson

    You want it to be missed, sure.

  24. littleoddsandpieces

    There is no pain, only ever greater starvation, reduced wellbeing and even death, because that is what austerity causes, with or without a recession.

    It cannot be coincidence that nearly a million benefit sanctions have meant nearly a million food bank referrals, equally to a person at 60 with health issues or a young mother with a new baby.

    Labour will not repeal Pension Bills 2010-2014 (latter brought in flat rate pension) that will leave a great many women born from 1953 and men born from 1951 with

    NIL STATE PENSION FOR LIFE

    that is for them sole money in old age

    with three quarters of the rest on even less state pension than present lowest level

    of all rich nations bar poor Mexico.

    https://you.38degrees.org.uk/petitions/state-pension-at-60-now

    This will leave huge numbers on ever vanishing benefit for life.

    Labour’s Mr Balls has said Labour would continue Tory spending cuts and

    be even harder on welfare reform than the Tories.

    The Tories’ welfare reform threatens people’s lives in amongst the 20 per cent poorest income.

    These poorest are at least 13 to 15 million, which is a number that by voting would bring in an entirely new political party to government. 15 million did not vote, of all ages, in 2010, which is double all those who voted for all parties put together.

    Labour need to do a massive u-turn of ending belief in austerity, tax, pension and welfare reform, that is adding to national debt, not solving it. We see austerity has not solved one nation’s economic woes anywhere in the world.

    The Greens offer the life saving new and unique policies in UK history, by ending all benefits admin (housing benefit a work in progress) and offering a end to the 70 per cent rise in starvation since 2010:

    – universal, automatic Citizen Income, non-withdrawable

    to the level of the basic tax allowance

    – Full State Pension to all citizens, irregardless of their National Insurance contribution / credit history caused more by benefit law changes and omissions

    which are massively reducing or losing altogether citizens any state pension that is their sole food and fuel money now (7 years lost state pension payout then none).

    https://you.38degrees.org.uk/petitions/state-pension-at-60-now

  25. madasafish

    You clearly have no Caps Lock.
    Stop shouting.

  26. robertcp

    The significance was political rather than economic.

  27. Leon Wolfeson

    Well, I worry about the economics of it.

  28. Keith M

    It’s called capitalism. If you can’t make it – tough sh*t. Surely we want and should demand better than this.

  29. sarntcrip

    SQUASHING THE BOTTOM TO CUT TAXES FOR THE RICH TORY ATTACK ON SICK ND DISABLED REMINISCENT OF THE HARD RIGHT IN HISTORY

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