James Forsyth

Labour’s high risk, high reward strategy on national insurance

Labour's high risk, high reward strategy on national insurance
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Labour today has tried to shift the National Insurance debate from whether you should cut waste to prevent a tax rise, to whether the Tories’ sums add up. When the Tories announced their plan to avoid the worst of Labour’s NICs rise by cutting waste they made a conscious decision not to offer details on how they would make these efficiency savings. As one shadow Cabinet minister explained to me, they had no desire to repeat the experience of the James Review when they were going on Newsnight to argue the toss over individual savings. The Tories think that the argument that government can save one pound in every hundred that it spends is credible and that combined with the endorsement of two men who have advised the government on efficiency so recently is enough.

Labour is trying to use this lack of detail in the Tory plans to attack them as uncredible; back of the envelope calculations Brown called them this morning. But the problem with going after something which has no details is that there is nothing to get your teeth into, nothing to disprove.

For Labour keeping this NICs debate going is a high risk, high reward strategy. If Labour loses this argument, it’ll look like a wasteful, high-tax government and those kind of governments tend not to get re-elected. The end of its own briefing note which it just blasted out to the media rather pithily sums up the current state of the debate, “Business leaders have responded to the choice put to them: would you rather cut Government waste or have a tax increase? Their answer is no surprise.”

The potential reward for them is that if they can win this exchange then they will have pulled apart what is rapidly becoming the centerpiece of the Tories’ economic plan. But judging by how things have gone today, that seems unlikely.