It’s autumn statement day. George Osborne will stand at the despatch box of the House of Commons this afternoon and present his pre-budget report. The Guardian’s Martin Kettle sums up what it’s all about:
For the Conservatives, today is about redefining themselves – in the face of a run of seriously disappointing polls – as the party that feels the voters’ pain over energy prices, house price inflation, wind farms or payday loans – while still, boosted by yesterday’s strong economic surveys and the possible return of the UK’s AAA rating, managing a recovering economy more soundly than Labour. For the Liberal Democrats, it is about using the run-up to the statement to articulate different priorities – Ed Davey on green energy or Danny Alexander yesterday on infrastructure spending. Few of the announcements are new or economically significant. Today’s autumn statement is 1% about the economy and 99% about election politics. As long as we all understand that, we won’t go far wrong.
I find much of the economic debate pretty unreal.
Conservatives claim that George Osborne’s ‘Plan A’ has been vindicated. The Times’s Tim Montgomerie taunts, ‘Plan A has worked, Mr Miliband, and how, by the way, is your comrade Monsieur Hollande doing?’ The Telegraph’s Peter Oborne hails the ‘electoral consequences of this outright victory for Conservative Party economics’.
The reality is somewhat different. The Coalition long since abandoned ‘Plan A’. It gave up on it in 2011 when a flat-lining economy forced the Government to admit eliminating the deficit in one parliament was impossible. As economist Jonathan Portes – one of the leading critics of the Coalition’s economic policies – recently acknowledged in the New Statesman: “we should give the government credit for not digging us further into a hole by trying to stick to its original plans”.
Labour could be making hay with all this at the Coalition’s expense. But they can’t for two reasons.
First, the part of ‘Plan A’ the Coalition abandoned – hacking back capital investment in public infrastructure like schools and hospitals – was Labour’s plan, too, in the days when Alistair Darling was calling for “cuts deeper than Thatcher’s”.
And secondly, because Eds Miliband and Balls persisted with attacking ‘Plan A’ even once the Coalition had diluted it. Ed Balls earned a lot of credit, deservedly, for his August 2010 Bloomberg address arguing against the Coalition’s deficit reduction. Sadly for him, he then wasted a lot of it by claiming the Coalition had stuck rigidly to it, instead of recognising how far George Osborne and Danny Alexander were moving away from their original ‘Plan A’. As a result, it’s the Chancellor who is now able to claim vindication for supposedly sticking with his economic strategy – as, ahem, I predicted he would 18 months ago – and who is trusted by more voters than trust Mr Balls.
The Coalition is winning the ‘narrative’ of the economic debate by pretending they stuck to ‘Plan A’; while Labour is losing it because they, too, pretended the Coalition had stuck to ‘Plan A’. Like I say, the economic debate is pretty unreal.
* Stephen was Editor (and Co-Editor) of Liberal Democrat Voice from 2007 to 2015, and writes at The Collected Stephen Tall.