Did he get cold feet? Or was his new spin-team overenthusiastic in their pre-briefing?
We were told we’d get an apology from Ed Miliband in today’s speech, but instead he entrenched himself in his position that Labour did nothing wrong on the deficit. I’m surprised at this decision.
Surely Ed Miliband understands, as his Shadow Chancellor understands, the central importance to an opposition party of economic credibility.
That credibility will not return while Miliband bases his economic argument on a denial of the facts.
First, and critically, he argues that Britain’s deficit was not a problem going into the crisis. Not only is this disputed by an impressive array of domestic and international experts, from Tony Blair to the European Commission and Mervyn King. Even before the crisis Labour’s deficit was breaking the very fiscal rules that Gordon Brown, and his then-adviser Ed Miliband, themselves introduced. Remember them, the Golden Rule and the Sustainable Investment Rule? Remember how Gordon Brown had to keep moving the goalposts because his borrowing was too high? Ed Miliband cannot base his economic credentials on trying to persuade the world that black is white.
Second, he argues that the crisis alone destroyed the nation’s finances. Of course, bailing out the banks was expensive. But rather than causing the hole, the crisis revealed that the long term sustainable growth of the British economy had not risen in the past decade; but instead that there had been an unusually long boom, which was mistaken for permanently higher growth. This distinction matters, for Miliband’s strategy says we can safely assume permanently higher growth in the future. The credible option is not to bet on it.
Finally, Miliband continues to say that we should drop the plan to get the nation’s finances in order. Never mind that this would actually mean more cuts, as we’d be paying more in interest. Worse still, a credible plan is one that you could credibly put in place as Government policy. But imagine the turmoil if Miliband’s plan was announced by the Government. The markets would take fright. Britain’s name would once again be added to that of Ireland, Portugal and Greece on the international watch list. Confidence would be shattered and the recovery would be hit.
Talking to Labour MPs last week, in private they no longer say with any conviction that the Coalition’s economic policy is a gamble. They know that had they been in power they would be cutting deeply. They know in their hearts the current path cannot be abandoned.
Despite its flaws, I hear the speech “went down well in the hall”. That a speech denying that public spending was ever too high should please arch Fabians is not a surprise. But I’m surprised Miliband doesn’t want to reach a wider audience. For Miliband’s speech today lacks credibility about the past, present and future. Until he acknowledges the truth about the failures of his past, he will lack credibility with the public.
Matthew Hancock is the Conservative MP for West Suffolk
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