Miliband: cuts are okay now
Fraser Nelson 5:54pm
I’ve just caught up with Ed Miliband on Marr this morning (transcript here) and his aim seemed to be burying Ed Balls’ complaint about cuts being too fast and too deep. In its place, he
called for more growth. Here’s my take on his interview:
1) He doesn’t complain about cuts. “The basic message is this: we've got to cut the deficit, but the best and most important way of doing that is to grow our
economy… A year ago there was a contested argument whether the government strategy should work. It's not working.” You don’t hear him talk about Ed Balls’ “too
hard, too fast” cuts, just a reference to ‘the government’s strategy’. Balls tells porkies, of course, and I think Miliband is a bit more honest. So he can’t quite
bring himself to blame cuts, given that state spending in the first year of the coalition was the highest in British history. When Marr asked him if he’s spend more, he replied: tax less.
2) Clever dividing line with Cameron over moralizing. “I have a difference with the Prime Minister though, and this is the difference. He wants to sort of say the problem with
Britain is the British people. I think the promise of Britain lies in the British people. The problem is the tragedy of Britain is that's not being fulfilled.” He is highlighting
Cameron's habit of giving speeches where he appears to be wagging his finger at the country, talking about the need for people to change behaviour and be more 'responsible'. The Tories are deeply
interested in behavioural science, nudge theory etc. But this can often come out as one big moral lecture. The 'broken society' agenda is also open to malicious misinterpretation. Miliband has
picked up on this.
3) Please trust big government again! “I sense a real feeling of fear in this country - fear that nothing is being done, that the government is if you like just standing aside,
as I'm afraid governments have done in history in response to this crisis. Don't stand aside. Put our young people back to work. That's what would make the difference.” This is the
dividing line, a weaker version of Gordon Brown’s the “do-nothing Conservatives” vs “Real Help from Labour” and nods to Labour strategists’ wider anxieties about
the appetite for big government (which Rawnsley put well this morning).
4) Labour is not for the ‘strivers’. “Now why do we say temporarily cut VAT? The reason we say that is, as every family knows, when you've got a credit card bill,
you've got to make savings; but unless you've got an income coming in, unless you're in work, you're not going to have the money to pay off that bill.” So Labour is committed to cutting
taxes on consumption, claiming it cares about those who are unemployed. This gives the Tories a clear chance to cut income tax for the low-paid and proudly proclaim “we are the new
workers’ party”. It’s a great tactic: Labour is worried about the people it kept on welfare dependency. The Tories should care, deeply, about the strivers: those who work. They
should cut taxes, so that work pays more. Marr later challenges him about anger amongst the low-paid against those who are fiddling benefits. Miliband acknowledges people in his constituency angry
about it, but doesn’t offer much in the way of anger himself.
5) Not much difference with Osborne on cuts. “If I was the Prime Minister, we would be having to make cuts. We would meet the plan of halving the deficit over four
years.” Osborne is halving it over three years, and the way growth is evaporating it may be three-and-a-half. It’s worth constantly reminding ourselves that the two parties are
fiscally closer than either likes to admit. Osborne is raising national debt by 51pc over a parliament: Labour’s published plan, which Ed Miliband endorsed again, would be 59 per cent.
6) Rules out early election. He tried to wriggle out of the fees question by saying “The manifesto's three and a half years away”. He’s probably right, but he
should give the impression of being impatient for power. The truth, of course, is that even May 2015 is too soon for his party, but Miliband should do a better job of disguising the fact. Ladbrokes
offers 5/1 odds of a general election next year, which I’d say is about right. Miliband talks as if there’s a 100/1 chance of that happening.
One final thing. There was a dangerous throwaway line where he says, “We've got to change the way our economy works. We didn't do enough to change the ethic of our economy. We've got a short-term fast buck economy.” This is a slander on the millions of British businesses who think and act for the long term – unlike those taxing them. Miliband is thinking (I suspect) about the investment banks, but he can’t say “British economy” when he is referring to a division of the City. It could well be that Team Miliband has a blind spot for business. If so, this presents opportunities for the Tories.
All told, the most interesting point from his 25 minutes is that Miliband is reclaiming his party’s economic narrative from Balls. The shadow chancellor complains about cuts, Ed Miliband complains about growth. Balls speaks tomorrow: let’s see if he modifies his message.
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Nick. Peters
September 25th, 2011 6:21pm Report this commentIt's kind of you to defend British business people in the way you do, but to be honest too many still place their energy in the short term rather than invest in the long term. They do this because they have no faith or confidence in the tax landscape being the same in 10 years as it is today. Capital allowances have been cut to pay, in part, for corporation tax reductions. So the business that invested in capital equipment for the future is penalised while the go-all-out for profits short termer gains. Government must set a fair playing field, get rid of a mass of loopholes and then leave business alone to get on with it.
El Sid
September 25th, 2011 6:27pm Report this commentLast summer Balls picked up on the NHF (ie housebuilding lobby) pre-budget submission to build 100k council houses/year. Typically for Balls, he wanted to fund it by yet more debt, he now seems to want to fund it from an adaptation of the Green Investment Bank. A more cooperative variation on the funding mechanism has been proposed by Eoin Clarke of Labour Left (né GEER) - http://eoin-clarke.blogspot.com/2011/05/100k-co-op-homes-over-18-year-period.html
Some of the taxes he proposes are complete nonsense but the basic idea isn't totally daft, it might be possible to adapt it into something that makes sense in the real world. However the NHF numbers for job creation which have been adopted on the nod by Balls and Clarke are just nonsense. They assume that as many jobs are created by a 2 bed council flat as by a mansion off Footballers' Wives. So 100k council flats per year are not going to create 750k jobs - more like a third of that, possibly fewer. Worth bearing in mind when Balls lays out his plan to save the universe tomorrow - I've gave it a more thorough fisking over at http://labourlist.org/time-for-a-plan-b-for-the-uk-economy#comments
DavidDP
September 25th, 2011 6:52pm Report this comment"This was my favourite passage in the interview"
That it's not people's responsibility for their own behaviour, it's society's? Really? You surprise me.
Publius
September 25th, 2011 7:12pm Report this comment"Balls tells porkies, of course"
Oh please call it what it is, and stop being so precious.
Hugo Chav
September 25th, 2011 7:13pm Report this commentFraser,
Watching the political elite from my armchair I struggle to grasp why these folk don't see that Britain is going to have a Mega Crash. That the Gilt market is going to blow up, probably in the next two to five years, though events could speed this up or slow it down, but by God it is coming.
In an ideal world we would have a Cabinet of National Unity who could make the deep structural changes that can help cushion the blow for when the Mega Crash happens.
I strongly recommend reading Dying of Money by Jens O. Parsson, you can get a PDF copy on the internet. There is also an audio interview with renowned Swiss money manager Felix Zulauf on the McAlvany Financial channel on YouTube, dated 21/9/11.
"Current events form future trends."
TrevorsDen
September 25th, 2011 7:28pm Report this comment'He wants to sort of say' .... what sort of cobblers is this.
Where has Cameron said in any case that the problem is the British people (All of them?!)
This is utter bullshit.
Trust big government? Ha how delusional is that.
Then he lies again and says the govt are doing nothing.
The govt want to streamline planning and guess what - The Telegraph is screaming like a stuck pig. And rEd pretends the govt are doing nothing.
All this guff from Miliband is a load of self serving toss. He has nothing to offer.
He apologises for immigration - he says Labour 'got it wrong' - 13 years where the Labour govt added 3 million is it to our population? 'got it wrong'??? Don't make me laugh.
'Getting it wrong' is where you bet on the favourite at the grand national and it falls at the first.
Pardon me while I puke.
Mr Chav we already have a left right coalition.
Seasurfer1
September 25th, 2011 7:53pm Report this commentSeasurfer1
September 25th, 2011
The Country is broke.
Osborne is on the right track in attempting to get the debt under control.
Raising Corporation Tax is not the answer . Raising the level will just accelerate businesses going abroad and cicumventing UK taxes.
It is important to get Economic Growth - and Fast.
Radical proposals would be to get the UK people working and Production up.
Osborne could:
1 Cut National Insurance for Employers 100% where the Turnover falls at a benchmark level - say £50,000,000 and include some graduation level.
2 Get rid of price fixing with the Minimum Wage and let the market determine wage levels.
3 Get rid of the 5.6 weeks Statutory Holiday and legislate for a 4 week statutory holiday for all- Pubilic and Private Sector. Perhaps legislate on an Emergency Footing for a Three Year Period.
4 Get rid of the ability to claim Statutory Sick Pay after 3 waiting days and extend this to 10 days with a doctors certificate.
Sooner or later the Western World will have to work to pay the debt- so why not make the UK first, be radical on the supply side and get people working.
The Unions would kick off but they will do in Greek style later anyway.
oldtimer
September 25th, 2011 7:56pm Report this commentre the politics of nudge, favoured by the Cameroons, this is merely an excuse to tax some thing or some behaviour they do not like. The effect is distorion. Distortion quickly turns to extortion. Taxes and subsidy charges (feed in tariffs etc) on energy are a prime example. It rapidly becomes a racket - like the wind farm subsidies.
Simon Stephenson.
September 25th, 2011 8:25pm Report this comment"Balls tells porkies, of course, and I think Miliband is a bit more honest."
Neither of them is even remotely honest - how can they be when they want the UK to become a socialist state, yet never mention this in any speech, statement or other communication they have with the public? I'm sorry, but talking only of the "hurrah" part of socialism, failing to mention the nasty part of Big-State, High Tax, interference and un-freedom, pretending that we can have one without the other - and that this is all you stand for - is the epitome of dishonesty. As practised to Gold Medal standard by one James Gordon Brown MP, the mentor and hero of the current Labour Party leadership.
"I have a difference with the Prime Minister though, and this is the difference. He wants to sort of say the problem with Britain is the British people."
The Prime Minister is largely right. The problems we are facing are the direct result of the Great British people being so complacent about politics that they were stupid enough to elect Labour not once, not twice, but three times in a row between 1997 and 2005. For the public now to expect to be exonerated for these major shortfalls of judgement is expecting rather a lot, don't you think?
"I sense a real feeling of fear in this country - fear that nothing is being done, that the government is if you like just standing aside, as I'm afraid governments have done in history in response to this crisis. Don't stand aside. Put our young people back to work."
This is utter claptrap. The problem isn't that the government is doing the wrong things, it's that the government needs to step back and stop interfering. The crunch is that few are planning beyond the short-term because no politician of any Party is giving them straight information about what they are planning for the future - what framework will be put in place, and how much or little people will be allowed to get on with it without continually being harassed and interfered with.
"If I was the Prime Minister, we would be having to make cuts. We would meet the plan of halving the deficit over four years"
Not if his Party reneged on the fiscal promises they made at the General Election - and the odds are heavily odds-on that they would have done so. Moreover, he assumes that the attitude of the international finance community would be equivalent under a reneging Labour government to what it is under a committed Coalition. What happens to "halving the deficit in four years" if the financiers take flight, and we have to pay penal rates of interest to get any finance at all?
"We've got to change the way our economy works. We didn't do enough to change the ethic of our economy. We've got a short-term fast buck economy."
The more he and his party propose to interfere, the shorter term and the faster buck will the economy become. Still, that'll give him an intro to the line that even more State intervention is needed, because the private sector won't do the right things on its own.
ButcombeMan
September 26th, 2011 12:05am Report this commentBeing LABOUR isn't working?
So we will try something else?
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They are stuffed until Balls goes. He is barking.
Dimoto
September 26th, 2011 12:56am Report this commentLabour spent most of their time in office hijacking any passing Tory idea, giving it their unique spin, claiming it as their own and then wrecking it.
That is all they are doing here: "we agree that cuts must be made but we know better how to do it", "we want tuition fees raised but by less than the Tories", etc etc
Same old tosh.
But there is a difference - the crooks are no longer in government, so nobody is listening !
And No ! Imitation is NOT the most sincere form of flattery, it's just more "triangulation" claptrap.
(I wonder if any of them know what triangulation actually means).
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