Labour may be doing alright, but Miliband is still dodgy on the public finances

Ed Miliband’s leadership may be young, but his trickery on the public finances is already well worn. We got it all in his interview with Andrew Marr earlier – and then some. There was the claim that Labour “paid down the debt” (that I dealt with here). There was the claim that Labour’s spending was responsible (my response here). And there was a straight-up lie about Miliband’s forecast for a double-dip. So far, so Brown.

What caught my ear, though, was this exchange:

Andrew Marr: I mean Tony Blair said in his memoir that by 2005, he was worried that the party was spending too much. And Alistair Darling said actually it was about 2007, he was worried that the party had been spending too much – before the crash happened. And all I’m asking you is to acknowledge that actually, you know in Keynesian terms, in that period, during the upswing when you should have been paying money back, by the end you were spending too much. Ed Miliband: Well if you look at actually what happened, we slowed the growth of public spending in about 2005 or 2006 precisely because the tax receipts weren’t coming in sufficiently and we slowed the growth of spending in our economy.

So, strictly speaking, Miliband isn’t lying. Spending growth did “slow” to 1.6 percent in 2006-07. But look at the overall picture: Labour had been ratcheting up spending by over 4 per cent a year for six years previously. In the three years after 2006-07, it hit 3 per cent, 3.5 per cent and 5.6 per cent. And don’t forget that even in 2006-07 the amount Labour spent still exceeded their incomings. This was hardly prudence in action.

Secondly, and even more curiously, Miliband seems to be conceding ground to his opponents by even making this point. By admitting that Labour tried to slow spending before the crash – because it was outstripping tax receipts – he is simply fuelling the argument that his party let the deficit get out of hand, and that spending was to blame. Why, the question will come, did New Labour not spot this problem earlier, then? Why did they really only slow spending growth – not cut it, mind – in one year?

As Fraser said earlier, Labour have stumbled into a favourable position. But Miliband shouldn’t get ahead of himself: he still lacks a clear message on the economy.