Why Labour’s deficit reduction plans are genuinely different to those of the government

Labour's deficit reduction plans for the next parliament are genuinely different to those of the Conservatives.

Labour’s deficit reduction plans are tough but also genuinely different to those of the Conservatives

Once upon a time the NHS was supposed to be the British religion. Today it’s arguably the deficit, with politicians of all stripes emphasising their own credibility by promising to ‘pay it down’.

For better or worse, this is where we are. For many of us on the left that’s deeply unfortunate – but it’s largely down to our failure to win certain arguments since the world economy exploded in 2008.

So deficit reduction is where we are – in this parliament and the next one – whoever is in office.

But that doesn’t mean that deficit reduction is the same across the board, despite what some may wish to tell you. Labour’s deficit reduction plans for the next parliament are genuinely different to those of the Conservative-led coalition, and are being laid out today by Ed Miliband.

We’ve had a quick look at some of these differences and why they’re important.

Ensuring that those with the ‘broadest shoulders’ really do pay their fair share

For all the jibes about his being out of touch, George Osborne is a politically astute chancellor. This is why, if you look at the distributional analysis of the recent Autumn Statement, it appears to show that the most well-off 10 per cent have shouldered the greatest burden of deficit reduction under this government.

Dist analysisj

See the black dotted line? It doesn’t quite chime with all the sound and fury about a coalition government ‘by the rich and for the rich’, does it?

Yet it would be a mistake to take this at face value: look at where the rest of the line sits – the poor are clearly hit the hardest after the top decile. In fact, they’re hit to such an extent that you might say the impact on the top 10 per cent is cover for the assault on the bottom 40 per cent.

Meanwhile when the coalition talks about the rich ‘bearing the greatest burden’ they’re mainly referring to entitlements they’ve removed from people who very often didn’t use them anyway. Meanwhile early in this parliament the coalition increased VAT – a tax we know disproportionately hits the poor.

Labour’s plan is both more straightforward and more transparent: a Mansion Tax on properties worth more than £2 million, an increase in the top rate of income tax – still the most progressive form of taxation – and a tax on bankers’ bonuses.

Dealing with the underlying problems that are causing the deficit to rise

As opposed to swinging the axe wildly in the fashion of the current chancellor.

Once upon a time the coalition talked a great deal about ‘rebalancing the economy’. However during the prolonged period of economic stagnation in 2013 and early 2013, George Osborne abandoned his supposed long-term goals in a dash for growth.

As such the country is now following a trajectory that is dangerously similar to the pre-crisis one – a house price boom and consumer spending based on ever-increasing personal debt. In their obsession with shrinking the state, the coalition has prioritised appearing ‘tough’ over being correct. As a result, services have deteriorated, welfare budgets have risen and slow progress has been made on the deficit.

To deal with rising welfare and falling tax revenue we really do need to tackle low pay, insecure jobs and housing shortage, as Labour points out.

Differentiating between productive spending and other outgoings

Not every pound spent is equal, and it’s folly for the government to seek to fix public spending at an arbitrary figure of 35 per cent of GDP.

We often hear public debt being compared to ‘the household credit card bill’. Yet it’s more illuminating to compare the public finances to that of a business – UK PLC if you like. In business there is a point at which debt becomes unhealthy, but if the business is profitable and wants to grow then it will invariably run up debts.

The mistake on Miliband’s part is to (apparently) rule out borrowing to invest: today the Labour leader stated that the manifesto will not have commitments funded by borrowing. However he also claimed that spending on public infrastructure – infrastructure which helps the country to grow – was very different from public spending more generally.

This sounds like a bit of a contradiction – does ‘productive investment’ not justify borrowing? What about capital borrowing for house building?

 

For better or worse, deficit reduction is the political reality against which Labour’s economic credibility is now being defined. Cut the deficit Labour must; but they’re making a genuine attempt to do it in a fairer and more intelligent way than the Tories.

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

58 Responses to “Why Labour’s deficit reduction plans are genuinely different to those of the government”

  1. Ley Shade

    Labour are not of the left. Greens are left, maybe closer to the far-left without going into extremism (I’m not sure of the term for this).

    Greens are based in Socialism, which is contrary to the modern Labour party. In fact, the modern Green party is roughly were Labour used to be. The GreenSurge happened because Labour went off chasing UKIP and the Tories in trying to appeal to the 1%.

    Labour can stick their fingers in their ears and pretend the reaper isn’t knocking, but it doesn’t make the reaper dissapear. PR system or FPTP, it doesn’t matter – Greens are a seperate party standing on their own merits, and if Labour wants to swallow us up it’s because they fear the competition from those still holding the position they abandoned, representing all the people they abandoned.

    Labour went to the right and is stuck there. Complaining that real socialist movements have come to chase you, as the Green, SNP, Plaid alliance has is folly, and only drives more people away from the Red Tories than it brings back.

    Again, if you want Green policies, vote Green. If you want Red Tories, you vote
    Labour. The fact Labour supports austerity and wants more cuts is
    directly opposite to the Greens, who want to end tax evasion, tax the
    rich their fair share, and make sure no more corporations dodge tax. If
    you want to support Conservative policies dressed up in Red Ties, vote
    Labour – if you want a real alternative, vote Greens (or SNP if in
    Scotland and Plaid Cymru if in Wales).

  2. Leon Wolfeson

    Of course Labour are not leftist, but the Greens…

    …Again, in countries where there’s PR, there are both left-wing parties AND the Greens. Socialist thought (which I note is pretty exclusive in the UK of other thought) and the Greens don’t tend to co-exist, and the Greens have some positions (on i.e. science) which still manage to be to the right of today’s Labour.

    I call the Greens, thus, centralist.
    You’re distinct from Labour, yes. But you’re not in a position to appeal to the wider left either, and you’re smearing the regional leftist parties and trying to abuse their names by presenting yourself as the same thing for England.

    I won’t vote for you because of the very anti-poor results of your calls, and your anti-science views.

  3. Ley Shade

    –Again, in countries where there’s PR, there are both left-wing parties
    AND the Greens. Socialist thought (which I note is pretty exclusive in
    the UK of other thought) and the Greens don’t tend to co-exist, and the
    Greens have some positions (on i.e. science) which still manage to be
    to the right of today’s Labour.– – Assuming that the Greens are not left because formerly left parties still exist is folly.

    Natalie Bennet and Caroline Lucas have both openly stated the Greens are socialist when Labour and Tories criticised us for being so. Also, we advocate better funding and resources for scientific study and better treatment of those doing scientific research by both sides than either Labour and the Tories. It’s good to check the facts before you spread assumptions about our policies =)

    I call the Greens, thus, centralist.– – If the greens are ”centralist”, Labour has departed to the far right. While true, that Greens are not as far left as the SNP, we haven’t chased the Tories down the right-wing ”appease the 1% and political elites at all costs” path alike Labour has.

    I don’t see how we’re smearing a left by promoting our all-left alliance with the SNP, Plaid Cymru, and Sinn Feinn. The fact Labour is decrying that the left is the enemy while Labour and Tory MP’s are being increasingly spotted wining and dining together makes a mockery of your position. So yes, we do have the abilityt o threaten Labour, as we’re doing now with the revived GreenSurge – it’s called offering an alternative to Thatcherism that goes beyond wearing a Red or Blue tie.

    You mean you won’t vote for us because we oppose motions that Labour backs the Tories on. So by claiming we’re anti-poor, does voting in favour of the Bedroom Tax when it’s not your own bill, voting to approve benefit sanction targets, voting to withhold benefits from disabled people, and voting to lower benefits while inflation rampages forward somehow meant to help poor people? And again, how are we anti-science by wanting to invest in better science, inrease scientific funding and make science safer for both researchers and the public?

  4. Leon Wolfeson

    Lying about science gets you no credit with me. In fact, it shows what a disaster you’d be, since the Greens oppose ANY research in some very broad areas of science. “Safe”, absolutely, safe of anything which might improve people’s lot.

    And there’s a sharp difference between being on the left, and trying to equate yourself with the non-Green leftist regional movements. You’re not a threat to Labour, either, thanks to FPTP – so for the record do you support voting reform?

    And no, I didn’t say anything about “motions”, I said some very clear things which you needed to lie about. I am a left winger, not a Labourite, of course, as you try and lie about me as well, saying I’m a far right winger.

  5. Ley Shade

    Unlike Labour, we have a fully costed manifesto already, part of which explicity states our views on science. It’s hardly lying when I can state our position proudly. While you might want to consider it lying, you’re going to find that Labour’s denouncing us is not necessarily truth. So actually, you lying about our position holds no credit with me – we support science, but we don’t support Labour’s wishy-washy ”support whatever position is popular at the time” nonsense.

    Labour is hardly-left. You might not like it, but we’re the ones part of the left-alliance with SNP, Plaid and Sinn. I mean, it’s convenient you forget all the councils that Labour has formed grand coalitions with the Tories to ”get rid of the outsiders” on (Labour counciller quote). Heck, in Charnwood, there is literal complaint over the fact Labour and Torie councillers wine and dine in the same ”posh” pubs together as a clique regardless of how their parties want to paint their differences.

    You also know I support voting reform, something that Labour has opposed every step of the way (again, no point in lying about it. Your parties MP’s votes are a matter of public record).

    –And no, I didn’t say anything about “motions”, I said some very clear things which you needed to lie about– – Says the person who tries to lie about what’s in our manifesto, which can be read at the link below =) – Sorry, but me calling out lies and hypocrisy isn’t me lying, it’s me pointing out how Labour can’t keep a cohesive position and needs to tell two different versions of everything constantly to try to win back Green and UKIP defectors (if you didn’t, you’d not constantly get caught contradicting yourself, such as setting up Anti-Green and Anti-UKIP groups =))

    –I am a left winger, not a Labourite, of course– – So you’re either part of Labour, who have moved to the right, or you’re part of one of our allies, which makes me wonder why you bother attacking us. Or you’re totally deluded about Labours accomplishments in chasing the elite 1% and need to pretend they’re still the Labour of old, which they’re not (heck, most of the threads on this page specifically are Labour supporters complaining about how Labour can’t keep a cohesive position, and how they’re constant contradiction of themselves makes them completely uncredible liars =)).

    greenparty.org.uk/values/

  6. Guest

    You can claim what you want – the UK’s greens reject a lot of basic science.

    You also don’t read a word I say, when I have repeatedly said I don’t consider Labour to be of the left at all. You are part of no magical “alliance”, you’re considerably different to the regional leftist parties. And no, I didn’t “know” you supported voting reform, in fact from your posts I’d think you did not, until you’ve said otherwise now.

    Your demand I be part of a party is sad (nope, “NOTA”, I’m in London…) – and I insist on using the truth, which you take an attack, and as you once more scream I’m magically a right winger because I don’t support your precise agenda.

    Mention the other bits as well, in your glossy brochure – the poor can expect to sit in the cold and dark, we can expect a mass exodus of medical research if you get into power, etc.

    But no – you’ll just yell again “You’re labour, you’re labour”, making your fundamental hostility plain, as you demand the poor turn their lights off. Nope, I’m a left winger – and I support nuclear power, I support genetic engineering and I support science; against you and your Jihad.

  7. Guest

    Really no. In fact, the Cooperative movement is debasing itself by remaining within Labour.

  8. Ley Shade

    –You can claim what you want – the UK’s greens reject a lot of basic science.– – Not according to our manifesto or members. Labour’s lying propoganda is not synonymous with facts, as per usual.

    –You also don’t read a word I say, when I have repeatedly said I don’t consider Labour to be of the left at all.– – Several people comment as guests. It’s somewhat hard to tell when you’re talking to the same person, or someone else.

    –You are part of no magical “alliance”, you’re considerably different to the regional leftist parties.– – Except for the fact we are part of an alliance that all three parties announced co-operatlively. Again, wishful thinking on your part is not fact.

    –nd no, I didn’t “know” you supported voting reform, in fact from your
    posts I’d think you did not, until you’ve said otherwise now.– – It’s a Green Party commitment, thus I support it. It was kind of obvious really.

    –Your demand I be part of a party is sad (nope, “NOTA”, I’m in London…)
    – and I insist on using the truth, which you take an attack, and as you
    once more scream I’m magically a right winger because I don’t support
    your precise agenda.– – You use right-wing propoganda and rhetoric as justificaiton, as well as a previous ‘guest’ stating there were of the right-wing. Either you validate my point by conceding it was someone else, or you deny your own comments and concede to lying. Either way, my point stands.

    Also, using right-wing rhetoric and Labour lies that directly contradict our recorded voting history, our manifesto and what’s said by our members also doesn’t disprove me, it only proves you didn’t take the time to do your homework =)

    –Mention the other bits as well, in your glossy brochure – the poor can
    expect to sit in the cold and dark, we can expect a mass exodus of
    medical research if you get into power, etc.– – By increasing the amount welfare pays, locking down executive pay to be in ratio with general worker pay, and making sustainable energy a priority? Again, you’re using right-wing rhetoric as fact when it contradicts evidence and our manifesto. You’re not going to win the argument by rattling off a UKIP hate brochure.

    –But no – you’ll just yell again “You’re labour, you’re labour”, making
    your fundamental hostility plain, as you demand the poor turn their
    lights off.– – I am poor. I think I’d do my homework, rather than you’re ‘lie as much as possible and hope someone believes you’ strategy. How exactly does lower energy costs, higher welfare payments, and assistance with renovating your home to have sustainable energy make people sit in the dark? Last I checked, the energy price rises and welfare sanctions that Labour/Tories/UKIP advocate cause that.

    –Nope, I’m a left winger – and I support nuclear power, I support genetic engineering and I support science;– – Not a single one of the left-wing parties of the UK support Nuclear Power. And the Greens are open to genetic engineering and support science. Again, manifesto (also, you’re line is taken directly from a UKIP brochure on hating the Greens. I said it before as an off-hand joke, yet irony you should turn it into a legitimite criticism later in your post).

    — against you and your Jihad.– – If this was a ham-fisted attempt at bringing Islam into this discussion, be aware that it will alert me (with other tell-tale signs) that you have a predisposition towards UKIP and not doing your homework.

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