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A dreadful spending review but Labour still has key lessons to learn

Gideons New Clothes copyToryism was out in its most naked colours yesterday. Osborne wants an additional £11.5bn spending cuts by 2015-6, and intends to get them by £5bn so-called efficiency savings (a hypocritical blanket cover for straightforward cuts), £2.6bn cuts to local authority budgets (already cut by 30-40% since 2010 for many Councils in the North), and £500m cut fron education (the country’s future).

Why are £11.5bn cuts needed at all? Because Osborne’s deficit-cutting programme has been knocked massively off course by the impact of austerity on government tax receipts, i.e. self-inflicted.

Who is going to pay for this? The further 144,000 public sector workers who will now lose their jobs, the millions of other public sector workers who will now be forced to take a real terms pay cut, and the unemployed who will have to wait a week to claim any benefit.

Who will gain? MI5, MI6 and GCHQ, who have just been found out engaged on the biggest spying operation against British citizens ever known, have been rewarded with an increased budget of £2bn. And to cap it all, the budget for the deeply controversial HS2 rail line – Britain’s most expensive capital project – is now being increased by no less than £8bn, from £34.5bn to £42.6bn.

Taking his cue from the Mad Hatter in Alice in Wonderland who told us ‘words mean whatever I want them to mean’, Osborne announced that the themes of his spending review were ‘growth and fairness’. They were the exact opposite, fished out of the disintegrating debris of his comprehensively failed deficit-cutting strategy to stick words on it that bear no relation to reality.

There is less than 2 years to the next election which will hinge on the public’s reaction to this whole public expenditure saga. Labour still trails on two absolutely crucial points.

One is that people still believe that we’re mired in this austerity because of Labour over-spending. It’s nonsense because the UK debt to GDP ratio was only 3% (below the OECD average) in mid-2007 before the crash, and only rose to 11.6% in 2010 because of the bank bail-out. But as long as people go on believing that the mess we’re in is all Labour’s fault, that is a big disincentive to voting Labour again. Labour should be using every opportunity at its disposal to dispel this canard.

Second, Labour still has not spelt out a convincing alternative to prolonged austerity. Cutting less far less fast has been a disatrous distraction and has convinced no-one. We have never adequately explained that there are two ways of dealing with a big deficit – either massive painful cuts like the Tories are only too happly to dole out, or kickstarting the economy by capital investment which reduces the dole queues and gets the jobless back into work paying taxes and no longer claiming benefits.

Take your pick. Why aren’t we saying this loud and clear, over and over again?

12 Comments

  1. Alex says:

    I was under the impression that Labour had said they would kickstart the economy by capital investment, but then maybe some were not listening. There are back to back articles criticising Labour yet when there are positive statements made by the leadership there is silence. Surely, it is time to lay the criticism for the lack of support from the many who remain silent on the opposition benches who are clearly underperforming and who with any luck will be replaced in the upcoming reshuffle.

  2. Johnreid says:

    Well opposing Tory spending cuts in 1981′ worked ,didn’t it

  3. Lynne Hanratty says:

    I really think hat Labour is making a grave mistake in their approach to all of this. If the Labour Party are just going to go along with all the nasty nasty welfare policies then what is the point in anyone voting for them? There are plenty of angry people out there and many of them are asking that question. I understand all the political games but I think that the public would respond to anyone who showed belief and passion and made a decent argument. To make people wait 7 days every time they lose a job(which, at the moment, for people at the bottom, is often) before they can claim benefits is nothing short of disgusting. These people have no money to fall back on. Most of them already owe money because ther wages are so pitiful and impossible to live on. I just cannot believe that the Labour Party is not shouting from the rooftops. I hate this Coalition and the untold damage it is inflicting on the UK but where do I turn to? Labour is not speaking to me. And many many people like me. You might gain some middle ground voters this way but you will lose all the people who want to vote Labour but can’t whilst it refuses to really oppose the Coalition on its downright nasty policies.

  4. Rod says:

    @Johnreid

    Well, Alistair Darling’s promise of spending cuts “deeper and tougher” than Margaret Thatcher’s worked in 2010, didn’t it… ?

  5. I think people are right to consider the lessons of history.Another example is the state of the country the Attlee government faced in 1945.

    It faced debt problems that at that time were by far worse comparitively than that facing an incoming government in 2015.Against this background Attlee was able to to carry through a radical agenda that provided important changes to our way of life.

    Those of us who wish to see justice and fairness for all are looking forward to the incoming government in 2015 once again taking up the vision and hope that Attlee provided.

  6. Patrick Coates says:

    We could start with the Railway being owned by the Nation.

  7. Johnreid says:

    Rod ,yes it did labour went from being only 22% in the polls, in 2009′ to 29% a year later,

    And that 29% we got was better than the 83 result!

  8. Rod says:

    @Johnreid

    You got me there, John. Didn’t realise Labour really stuck it to the opposition. No matter that Labour didn’t win the election, eh?

    Not doubt you’re looking forward to an identical result in 2015.

  9. Johnreid says:

    Not really looking forward to the Tories not winning again in2015 but being the bigges party in parliament ,but think its inevitable,

    As for the alternative at least the next election looking more like a hung parliament again,it’s still a lot better than the way we behaved in the 80’s, and the results that the public gave us when we behaved so badly

  10. Robert says:

    John your suppose to be a Labour Secretary, what happened obviously your to the middle right of the party.

    The fact is the Poll are meaningless, Labour lost the election they were hammered truly destroyed . it makes not a jot of difference what the Polls said the following year.

    I doubt it makes much difference to the public and most around me would say the same whether the Tories win the next election of Labour, it seems we have a bunch of very second rate politicians at the moment, making us and our supposed democracy of career politicians look pretty poor.

    I think we will have another coalition at the next election, I do thinking it will be Labour Tory or Tory Labour, I think both are so desperate for power coming together in a coalition may be to much for them both to refuse.

  11. Johnreid says:

    After 13 years in power, we were nearly out of ideas, or whipped out implementing them, the public were going to oust us,it’s not like when we’ve last against a Tory party that s come in, introduced cuts and the public had a reason to vote for us, and didnt!

  12. Robert says:

    Not good is it, and now we have Tory Lite Labour party, I know it’s insulting to call it Labour.

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