THIS is the most exciting Formula 1 season for decades. Because it is not just about who has got the fastest car – it’s about race strategy, overtaking and adapting to the changing conditions.
You can be the fastest driver on the track for 40 laps – but that’s no use if, by ignoring advice, you spin-off in the rain or run out of fuel.
That’s my worry about the Chancellor George Osborne.
The voices are getting louder and louder, warning him of the dangers facing the economy – the threat to jobs and family budgets from his recklessly fast deficit reduction plan. But he isn’t listening. He just keeps his foot to the floor.
This is a very dangerous strategy – dangerous for families and businesses who are struggling to get by, worried about their jobs and unwilling to spend and invest. And it is dangerous for Britain’s long-term future too.
George Osborne’s decision to cut too far and too fast has seen the economy flatline – and we are now set for slower growth and higher unemployment than forecast a year ago.
Britain is falling behind other European countries, while countries like India and China power ahead as our economy stalls.
But George Osborne thinks that if the economy goes wrong, it doesn’t matter because he can just blame Labour. Over recent days we have seen my private papers taken and given to the Daily Telegraph.
The Tories and their supporters are misrepresenting their contents and using them for a very clear political motive: to attack me, Ed Miliband and the Labour Party and try to promote a Tory lie that the global recession, and the deficit we now have, are all Labour’s fault.
Whatever the Tories and their supporters claim now, whatever the dirty tricks, we cannot let them rewrite history.
The global financial crisis happened in every country – it was not a recession made in Britain.
It was caused by the irresponsible actions of the banks, though Labour accepts that we should have been tougher on them.
Before the crash, Britain’s national debt and deficit were both lower than Labour inherited from the Tories.
And at that time David Cameron and George Osborne were pledged to match our spending plans.
I've thrown graphs and more detail at this before, such as here, here and here. So suffice to say that the MiliBalls argument doesn't account for something that is very important when it comes to the public finances: trajectory. When New Labour swept into Downing Street, the debt and deficit had been put on decelerating — or even downwards — trends by Ken Clarke's spending plans. So long as Labour followed the plans they inherited, the debt and deficit continued to fall. But as soon as they departed from them, around 2000-01, and started to splurge, the debt and deficit started to rise once again. By the time the crash crashed Labour's party, debt-fuelled spending had gone on for so long that both the deficit and the national debt were already on accelerated trajectories. This is not what Balls, with his illusions of prudence, would have us believe.
Nor do Balls and Miliband account for what happened next. Yes, in some very specific senses — e.g. as a percentage of GDP — the debt and deficit may have been lower in 2007 than in 1996. But that's when Labour's new trajectory really started to bite. Even discounting the measures to support the banks (as well as PFI and other off-balance sheet ruses), our debt rose by over 20 percentage points of GDP between 2007 and 2010, the second fastest rise of any major economy. The deficit that the Tories inherited was the highest in our history.
As for Balls's observation that the Tories were committed to Labour's spending plans at the time, he can have that. David Cameron has since, rightly, admitted that it was his worst mistake in Opposition.
But the crash pushed up deficits in every major country as governments took action to stop recession turning to depression, to keep people in jobs and in their homes and Labour cut VAT to get money into people’s pockets and keep the economy going.
So now, like every other country, we need to get the deficit down and that means cuts and fair tax rises – like the 50p top rate for those on over £150,000. In government, Labour set out a tough plan to halve the deficit over four years – in line with last year’s pledge from G20 countries.
And going at that balanced and steady pace was starting to work. Last spring the economy was growing again, unemployment was falling and so the Government borrowed £21billion less than expected.
But last June, George Osborne made a political choice to cut the deficit further and faster than any other major economy.
That decision is hurting families: the VAT rise alone will cost a family with children £450 this year. But by cutting too far and too fast – hitting families and costing jobs – the Tories are also creating a vicious circle in our economy. That’s because more people out of work and on benefits will make it harder to get the deficit down. Our economy has not grown at all in the last six months.
The Government’s independent watchdog says the economy will now grow more slowly, with 200,000 more people on the dole each year.
That’s bad news for families and businesses, but it’s bad for the deficit too.
This slower growth and higher unemployment means that the Government is now set to borrow £46 billion more than they had planned. And it’s not what the Tories promised.
They claimed they would cut the deficit by cutting waste but they are cutting the police and jobs instead.
One in five young people is now looking for work, yet the Tories don’t seem to understand this is a waste of money and their potential.
That’s why it’s now time for the Government to get a Plan B – and they should follow Labour’s balanced deficit plan, which puts jobs first.
Of course we need tough decisions on tax and spending cuts, but getting people off the dole and into work is the best way to get the deficit down.
Instead of cutting too far and too fast, if Labour was in government we would be cutting the deficit in a tough but balanced way, halving the deficit over four years.
And instead of giving the banks a tax cut this year the Government should adopt Labour’s plan for a bankers’ bonuses tax and use the money to get young people into work and build more affordable homes.
This is a key part of Ed Miliband’s focus on the “Promise of Britain” – that each generation does better than the last – which the Conservative-led Government’s policies are undermining at every turn.
And that’s why we know every Labour Party member will get behind Ed Miliband and back him 100%.
With the economy not turning out as they had hoped, it’s no wonder the Tories are getting worried. But, however much the Conservatives and their supporters sensationalise these papers and try to rewrite history, they will not divide the Labour Party.
These kinds of dirty tricks will never distract or dissuade us from taking the fight to the Tories for the damage their misguided policies are doing to jobs, our economy and our vital public services.
That’s why this week I will press George Osborne to use his Mansion House speech to change course.
We won’t allow him to leave Britain stuck out on the track and out of fuel while the rest of the world races ahead.