Ed Miliband has come out fighting in today's Times pointing out Tory "deceit" on the deficit. The truth is uncomfortable for the Government.
Ed Miliband has come out fighting in today’s Times arguing that “a great deceit designed to damage Labour has led to profoundly misguided and dangerous economic decisions”. The truth is uncomfortable for the Government.
Ed Miliband writes (£):
“What is this deceit? It is that the deficit was caused by chronic overspending rather than a global financial crisis that resulted in recession and a calamitous collapse in tax revenues. One pound in every five of corporation tax disappeared in 2009-10. Their deceit ignores the evidence from around the world that a global credit crunch caused deficits to rise on every continent. The US and Japan face deficits of the same scale and for the same reason.
“Their deceit seeks to rewrite history, airbrushing out the fact that Britain’s debt at the outset of this crisis was the second-lowest in the G7; lower than it was under the Tories in 1997. And it forgets that neither of the two parties now in government called for lower spending at the time.”
How true. The Tories were committed to sticking to Labour’s spending plans until after the collapse of Lehman Brothers on September 15th, 2008. As the graph below shows, it was only as tax revenue fell through the floor and “automatic stabilisers” – like unemployment benefits and increased tax credits – kicked in that the deficit opened up. Prior to that point, the modest Public Sector Borrowing Requirement was due almost entirely to capital spending – entirely acceptable under the old fiscal rules.
Chart: Public spending and revenue (% GDP)
But in his 2009 new year’s message, David Cameron opportunisticially referred for the first time to Labour’s “debt crisis“. He followed up with a speech that March on “Labour’s debt crisis”. The Conservative propaganda around George Osborne’s conference speech in 2009 referred repeatedly to “Labour’s debt crisis” and David Cameron continued the attack after the general election.
Going into May 2010, the Lib Dems supported Labour’s spending plans (although that didn’t stop some of their candidates distorting the facts on debt). The Lib Dems only diverged from Labour’s fiscal policy at some point after they first sniffed the scent of power in that dramatic weekend in May. Yet by August they’d completely forgotten their pre-election policy with Chris Huhne taking the Tory line and declaring:
“A decade of spend, spend, spend meant Labour hid their heads. And they are still hiding them. Labour’s leadership candidates say that spending was not the problem. It was taxes. Nonsense.”
Understanding the truth about the deficit is critical to understanding the right response. Rhetoric about a “debt crisis” only raises expectations for calamitous policies like the rapid cuts to public services or the ideological rise in VAT which was only necessary to pay for tax cuts to corporation tax, council tax, national insurance, and income tax. Don’t be fooled.
62 Responses to “Ed Miliband is right to expose the Tory “deceit” on debt”
Mike Thomas
If you do have to use a graph, label the axis and put a title on it.
GCSE maths fail.
Anon E Mouse
Will – Situations are fluid and even if the Tories did agree with Labour at some point in the past surely people are entitled to change their position as circumstances change.
Ed Miliband has written an article where he himself acknowledges 20% of the corporation tax has gone certainly with a fair proportion from the banks.
Well the bankers got rich through Labour deregulation and rewarded more by Labour than any other government in history with knighthoods and the like whilst Miliband was in the treasury himself.
And now he complains without any offer of a solution from Labour. Charming.
And on my first point it gives me an excuse to link to one of my favourite pieces of you Youtube footage: http://www.youtube.com/watch?v=bWLN7rIby9s
(Still makes the hairs on my neck bristle in excitement and when I met him he was a most pleasant individual – completely at odds with his media profile)
And his point about the “rigid dogma” is EXACTLY what you want Cameron to do. It’s why Miliband and the left show that they really don’t get it. Everytime he mentions the debt it reminds people who got us into the mess.
Instead of scaremongering Labour should say “We think it could be done this way or that” and give reasons why instead of this doom merchant stuff.
Before the election I wanted Labour to be positive and they weren’t and this article shows that they haven’t changed. You will not scare the public into voting Labour – the narrative is set. It’s too late to change it.
The left needs to move on Will – don’t you be fooled…
(Thought you were off somewhere else anyway fella. And what’s Shamik up to? Not seen a lot of posts from him lately so I presume he’s up all night watching the cricket)
Russ Noble
Ed Miliband is right to expose the Tory “deceit” on debt http://bit.ly/fbw6o1
Double.Karma
RT @leftfootfwd: Ed Miliband is right to expose the Tory "deceit" on debt http://bit.ly/gmo0Z8
Rob Watson
RT @leftfootfwd: Ed Miliband is right to expose the Tory "deceit" on debt http://bit.ly/gmo0Z8