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The boos won’t help, but Ed is wrong, wrong, wrong on austerity

Standing twenty metres from Ed Miliband during his speech in Hyde Park on Saturday, the crowd around me clapped and cheered loudly, as I did, when he referred to “a Chancellor of the Exchequer who tries to travel first class on a standard class ticket“.

Again, louder still when he attacked the “incompetent, hopeless, u-turning, pledge-breaking, make it up as you go along, back of the envelope, miserable shower” of a government. But when he started talking about hard choices, the atmosphere changed.

Some people started booing or shouting. Around me, it was almost entirely people from the Socialist Party and SWP, whose placards calling for a general strike I had earlier seen still piled high behind the end of the march. Most people, however, were silent…. and disappointed. And though we clapped again when Ed promised to “end the privatisation experiment in the NHS., and repeal the Tories’ NHS bill,” disappointed with Ed’s speech we remained:

Whoever was in government now, there would be some cuts…. but this government has shown that cutting too far, too fast, self-defeating austerity, is not the answer,” said Ed Miliband.

But this is simply wrong too.  Austerity with “different but fairer choices” is not the answer either. And to understand why, it is only necessary to revisit Ed Balls’s Bloomberg speech:

Of course we need to deal with the deficit and there is no doubt that we must cut waste where it is found. There is no dispute about that. We do need a credible and medium-term plan to reduce the deficit and to reduce our level of national debt – a pre-announced plan for reducing the deficit based on a careful balance between employment, spending and taxation – but only once growth is fully secured and over a markedly longer period than the government is currently planning.” (our emphasis)

After listing all the occasions in the twentieth century when the Labour Party Leadership had lined up with the Tories and the media on the wrong side advocating restrictive policies which further damaged the British economy, Ed Balls reiterated that:

Tory cuts are not just unfair, but both unnecessary and economically-unsafe.

Ed Miliband did well with his One Nation theme on Saturday — it has the same meaning in his narrative as the 99% in last years’ Uncut demonstrations across the world. But he needs to make it do even better. At party conference, in launching the theme he made the connection with the Second World War and its aftermath:

We won the war because we were One Nation. We built the peace because Labour government’s and Conservative, governments understood we needed to be One Nation. Every time Britain has faced its gravest challenge, we have only come through the storm because we were One Nation.

Ed Balls made the same connection in his Bloomberg speech, but he made th right points then (even if he too seems to have forgotten them:

We have just experienced the biggest global financial crisis in a century, an event as momentous in historical and financial terms as war, famine or a natural disaster. Our economies were saved from catastrophe only by government intervention to nationalise banks and to absorb huge financial liabilities from the private financial sector.

To attempt to repair the damage of such an event and return the national debt to its previous level in just a few years is not only dangerously incredible in the eyes of financial markets but places an intolerable burden on current users of public services.

Just think if Clement Attlee’s government at the end of the Second World War had decided that the first priority was to reduce the debts built up during the war – there would have been no money to fund the creation of the NHS, no money to rebuild the railways and housing destroyed in the Blitz, no money to fund the expansion of the welfare state.

All the things the Labour movement is proudest of about that post-war government would have been jettisoned.

And why weren’t they?

Because they recognised that when a country has been through an once-in-a-generation event – like the Second World War – where the costs involved are a second thought next to equipping the armed forces and saving people’s lives, homes and freedom – then the government needs a once-in-a-generation approach to the resulting debt: a slower, steadier pace of reduction which meant they could also fund the improvements in health, education and welfare that the post-war generation demanded and deserved.


  1. Syzygy says:

    Totally agree Jon but it was also out of step with ”The Chicago Plan Revisited“, an IMF study, by Jaromir Benes and Michael Kumhof, first published in August and which is beginning to be taken so seriously that Ambrose Evans-Pritchard wrote an article about it in yesterday’s Telegraph.

    ‘One could slash private debt by 100pc of GDP, boost growth, stabilize prices, and dethrone bankers all at the same time. It could be done cleanly and painlessly, by legislative command, far more quickly than anybody imagined.’

    Of course its not new. It revives the scheme first put forward by professors Henry Simons and Irving Fisher in 1936 during the ferment of creative thinking in the late Depression. And Steve Keen and the left have been talking about debt jubilees for more than the last 4y. Why aren’t the Eds?

  2. johnproblem says:

    What is he doing? Doesn’t he understand? He gets cheered when attacking on particular points. And the audience nod off when he starts philosophising. If I were Ed I’d fire my advisors and get new blood with a bit of blood in their veins.
    He needs to be Ed the Impaler, not bloody Marcus Aurelius……

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