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So where does each Labour leadership candidate stand on austerity?

Labour LeadershipCandidatesLabour LeadershipCandidates1It really is distinctly premature to hold the first leadership hustings, with the usual banalities of a beauty competition, just 8 days after the heavy defeat when there has been next to no analysis of what went wrong, how it should be put right, what direction the country should now be taken, and why. Since fundamentally Labour did not have a credible economic policy of their own, but rather a highly meretricious one gleefully wished on them by the Tories, each of the contestants should be asked their views on austerity and the Tories’ deepening programme of cuts:

  • Do they agree the Tories’ yarn about ‘Labour’s Great Recession’ as though the banks and the international downturn had nothing to do with it?
  • Do they think the Tories’ austerity policies are working?
  • Do they think Labour’s commitment to cut the deficit every year and impose a budget responsibility lock is (a) credible, (b) merely a pale imitation of Tory policy, (c) likely to cut the deficit currently standing at £92bn by any significant amount within 5 years, and (d) sellable to a large majority of Labour’s supporters?
  • If not, what alternative do they offer?

The attitude to austerity should be the key to this leadership contest.

It crippled Osborne’s hopes for growth: for nearly 3 years after his 2010 deficit-cutting budget, the British economy stagnated. He forecast growth of 2.7% between 2011-13, but it turned out at 1.3%. The OBR estimated that austerity was what caused GDP growth to reduce by 1% in 2010-11, and then by a further 1% in in 2011-12, that is a permanent loss of £30bn to the British economy in 2 years. Extrapolating those OBR figures puts the cumulative cost of austerity since 2010 at 5% of GDP – a colossal £75bn, almost equal to the current deficit. The main reason that Osborne secured his mini-surge in the 18 months from the start of 2013 was because he quietly slowed down the pace of his cuts, and that is equally why he is now demanding cuts of a further £35bn which had to be postponed to this Parliament.

The question is: which leadership candidates agree with this strategy?

Since mid-2014 growth has again collapsed from 0.9% in the 3rd quarter of last year to just 0.3% in the first quarter of this year – hardly a platform for a further £35bn cuts which will cripple growth again. That is despite the fact that the Bank of England injected a further £175bn into the economy via quantitative easing between October 2011 and July 2012 whilst at the same time Osborne engineered a house price bubble via Help to Buy.

Labour needs desperately to recapture the narrative about Osborne’s disastrous economic policy. Do any of the candidates agree with continued austerity? If not, what precise alternative are they offering to getting the deficit reduced?

15 Comments

  1. AS far as I can see there are no official hustings, as a timetable has not been set and the deadline for applications is June 9th unless something has happened in the last two days.

    Any group can hold any meetings it wants to. If this refers to Progress conference on Saturday, please could we hear from anyone who went. Or saw in on SKYPE as this happened I understand

    trevor fisher

  2. J.P. Craig-Weston says:

    Looking at the gallery of miscreants at the top of article it’s not so much a beauty contest as a parade of grotesques.

    Labor, (post-Blair,) who have callously and cynically turned their backs on the most desperate and vulnerable elements of their natural constituency, (“people who expect something for nothing,” was particularly piquant coming from a piece of thieving low life like Ed Balls,) and have behaved exactly like a bunch of Tories.

    So most people are now asking themselves what the point of them actually now is?

    Politics isn’t just about the economy, (trying to fight the election only in terms of abstract, unconvincing and frequently improbable economic doctrine was a disastrous mistake,) it’s about real people living real lives, a million miles away, (emotionally, psychologically and financially,) from the lives of most our MP’s and that whole post Blair, “set,” variously of spivs and crooks, (petty and Major,) and other, “partners.”

    Faced with prospect of electing a multi millionaire property speculator; living in a 2 kitchen; £2.6 million London Mansion, (equipped also with all the usual nannies and other “staff,”) someone who’s seemingly never done a days work in his entire, life as PM, (or letting the Tories in by default as Blair put it,) most people’s gut reaction to the idea of Ed as PM was probably something along the lines of, “is this supposed to be some kind of joke?”

    It isn’t about the deficit and it never was.

    1. J.P. Craig-Weston says:

      I’m also taking the liberty of coping this post from Micheal Meacher’s own blog; partly in response to the individual who complained recently about my whining and negativity:

      Mervyn Hyde
      May 17, 2015 at 11:50 pm

      In answer to Michael’s question, if any of them had any ideas of their own, they would be bursting to get them over to party members.

      The truth is these are all career politicians play to one section of the gallery, repeating like parrots what they think business wants to hear and hoping to impress enough in order to move on to the boards of private companies as directors.

      I have never known a selection of such weak, shallow, self serving cretins in all my memory in the labour party, and sadly there is not one real member of labour amongst them.

      1. J.P. Craig-Weston says:

        Or this:

        Prue Plumridge
        May 16, 2015 at 11:52 pm

        Andy Burnham had no plans to renationalise the NHS, is a Blairite New Labour, cannot be described in any way as being on the left and therefore will not be getting my vote.

        1. Will Wallace says:

          Burnham has been one of the strong advocates for pushing back market forces that have infiltrated the NHS.

          Sadly there are no real democratic socialists running in this race, but his heart is in the right place. The left should rally around him, so we can influence the future positions he’ll take.

  3. David Ellis says:

    When history calls time on something it calls time. There are obvious ways to revitalise the Labour Party including electing an anti-austerity leader prepared to work with the SNP, Plaid to the point of offering places in the shadow cabinet so we can have parliamentary representation for a movement that stretches across the whole of Britain but more than that a proper opposition to this vicious Tory government. Unfortunately Labour is intent on offering no such opposition and will sit behind yet another New Labour clone trying to outmanouevre Cameron from the right whilst the party disappears down the toilet. But why are the lemmings so intent on hurling themselves off the cliff? It is no mystery. Labour is a party of empire built on redistributing the crumbs of that enterprise to a labour aristocracy to buy social peace. Since 2008, longer in Scotland, there have been no crumbs to redistribute. In fact there isn’t even a loaf anymore. The objective basis for Labourism has disappeared and it was only Labour that was keeping the last of the empire together: i.e. the Westminster Union.

    The question for left Labour MPs is are they prepared to just sit there complaining but doing nothing whilst Labour is pasoked and the working people of Britain are screwed? Surely, if they cannot get a candidate on to the leadership ballot they must form a seperate bloc that allies with the SNP to fight Tory austerity and New Labour complicity?

    1. James Martin says:

      You really love those Tartan Tories don’t you David – has Brian Souter given you a free bus pass or something?

      1. David Ellis says:

        I love the way they have stood up for their country and done so by mobilising the working class and youth on a progressive anti-austerity programme.

        1. Robert says:

          I totally agree, pity labour did not try a bit of it.

          1. Rod says:

            Indeed.

            Now Labour’s leadership candidates are attempting to outdo each other in a race to become the most business-friendly candidate.

            One can’t help but wonder: do Labour’s elite have any experience of life outside Westminster?

  4. Sandra Crawford says:

    I would be prepared to give some of them the benefit of the doubt if their main problem is ignorance. Some of them have been indoctrinated with neoliberalism, but no nothing about how government finances work, or how money works.

    What is unforgiveable in any new leader is the refusal to see that austerity is not working, and that reducing the deficit when the economy desperately needs a stimulus is downright irresponsible.
    The deficit is a misnomer. It is just government using its right to spend more sovereign currency into the economy than it is taxing. Government is a sovereign issuer of currency, not a borrower.
    Government money is the source of real wealth in the economy. Without it we are just juggling bank debt around – banks create 97% of the money supply as a debt.
    To clear debt and rebuild our productivity, jobs and NHS, we need more government money, not less.
    Listen to Randall Wray:
    https://www.youtube.com/watch?v=i35uBVeNp6c
    The “Think Left” website is on to the Post Keynesian arguments here.
    http://think-left.org/tag/bill-mitchell/
    Listen to Randall Wray:

  5. SANDRA CRAWFORD says:

    Listen to Randell Wray again here, and also Warren Moslers lecture.
    It explains that both the Tories and Labour got deficits wrong in the present context of unemployment and poverty.
    This must be at the least, a part economic education for the left.
    http://www.bing.com/videos/search?q=youtube+randall+wray&qpvt=youtube+randall+wray&FORM=VDRE#view=detail&mid=497ABDE72EC383A1159A497ABDE72EC383A1159A

  6. SANDRA CRAWFORD says:

    Randall Wray here also giving a warning that deficit cutting will lead to another downturn/crisis.
    http://www.bing.com/videos/search?q=youtube+randall+wray&qpvt=youtube+randall+wray&FORM=VDRE#view=detail&mid=F2B21341E9A35165BE7EF2B21341E9A35165BE7E

  7. John P Reid says:

    With all this support for anti Austerity, surprising SNP didn’t get 100% of the vote and TUSc not getting millions of votes

  8. Robbo says:

    The party left me and my values under Blair/Brown. I hung on hoping for them to come back. It sort of did, at times, after 2010, but now we seem hell bent on a return to the Blair/Brown days.

    Millions of voters now have no political home. 5 million Labour voters lost between 1997 and 2010. Scotland now lost to Labour. The North East next ?

    As a Labour councillor in a southern Tory outpost who has built his Labour vote to two-thirds of those voting, I watched my ward ballot box on 7 May full of Ukip and Green votes.

    This leadership choice is frankly entirely demoralising. We need to win back those who now vote for other parties.

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