Could it really not be any clearer than this?

Ed Balls MP, Denton - (Labour Leadership Campaign) - 2010Defending the clarity of his party’s position on the deficit after forgetting to mention it in his speech, Ed Miliband said

Ed Balls talked this week about our approach on the deficit. I have talked about our approach on the deficit. No one should be in any doubt about my approach on the deficit.

My approach is clear – we are going to get the deficit down, we are going to get the debt falling and we could not be clearer about that.

OK so it is not a big problem to skip the deficit in one speech because the Eds have been talking about it a lot and they have been as clear as they possibly can be. But rather than take that at face value, shall we just check what was said by the Shadow Chancellor the day before?

Ed Balls speech:

But three years of lost growth at the start of this parliament means we will have to deal with a deficit of £75 billion – not the balanced budget George Osborne promised by 2015.

I recall Labour only planned to halve the deficit in one parliament, so they can’t be too outraged if this is roughly what happens. (I’ll take on the lost growth argument another time.)

And that will make the task of governing hugely difficult.

And this goes to the heart of the political challenge we face.

Not half as difficult as a £150bn deficit was. This is why we’ve had such an understanding opposition for 4 years.

So Labour will balance the books in the next parliament.

These will be our tough fiscal rules. We will get the current budget into surplus and the national debt falling as soon as possible in the next parliament.

As soon as possible? So £75 billion of austerity in year one? I know we’re all only Keynsian during a recession, but this takes the double standard to extremes.

Tough fiscal rules that our National Policy Forum endorsed in July, demonstrating that, however difficult, our party can unite in tough times to agree a radical, credible and fully costed programme for government.

And we will legislate for these tough fiscal rules in the first year after the election and they will be independently monitored by the Office for Budget Responsibility.

So in our manifesto there will be no proposals for any new spending paid for by additional borrowing.

I think this means that the total of new taxes will be more than the total of new spending.

Given that new taxes would have to be £75bn more than new spending to close the deficit, this claim doesn’t seem very relevant. (Though some of the £75bn would of course be spending cuts.) It would make sense to say this if you expected to inherit a balanced or nearly balanced budget – it’s almost as if the deficit is considered to be dealt with by talking tough on it, and then everything else you say as a party can rely on an implicit assumption that there is no deficit. It would make more sense for a party that lives and breathes to spend more money to take this election off and concentrate on 2020.

No spending commitments without saying where the money is coming from.

Because we will not make promises we cannot keep and cannot afford.

And because we will need an iron commitment to fiscal discipline, we want the Office for Budget Responsibility to be allowed to independently audit the costing of every spending and tax measure in Labour’s manifesto – and those of the other main parties too.

A bold reform which the Tories are desperate to block. Because they are running scared from having their own manifesto subject to independent scrutiny.

And because David Cameron and George Osborne want to carry on peddling untruths and smears about Labour’s plans.

A bit precious here, when Labour didn’t even have an OBR at all. The OBR’s job is to monitor the government and not political parties, and the idea of asking civil servants to pronounce on manifestos seems completely upside-down.

Conference, the next Labour government will get the deficit down.

And Ed Miliband and all my Shadow Cabinet colleagues are clear it will mean cuts and tough decisions and we will take the lead.

So I can announce today that if we win the election, on day one of the next Labour government, the pay of every government Minister will immediately be cut by five per cent.

Ministerial pay will then be frozen each year until we have achieved our promise to balance the nation’s books

Because we are all clear that everybody in the next Labour government will be fully focused on that vital task of getting the deficit down.

£600,000

And Conference, our Zero-Based Review of public spending is examining every pound spent by government to cut out waste and make different choices.

Andy Burnham is setting out how we can save money, and improve care by pooling health and social care with a single budget and joint management.

If this means savings from the health/social care budget, Ed Miliband’s £2.5bn extra is not extra, and if the savings are reinvested in health and social care, this is not relevant to bringing down the deficit.

Also it is already under way. There’s a clue in the name “Health and Social Care Act”.

Yvette Cooper has set out how police forces will work more closely together to make savings. And we will scrap Police and Crime Commissioners so that we can do more to protect frontline policing.

£50m (I’m happy to accept corrections to any of these figures by the way)

Hilary Benn is working with the toughest and best generation of local government leaders we have ever had to make savings and free up resources for the front-line.

Unspecified further cuts to local government. One of our Labour councillors makes much the same speech every council meeting, along the lines that if Nick Clegg were human he would with a stroke of the pen reverse all these evil cuts to local government. Turns out Ed Balls is even less human?

We will look to prioritise early intervention now which can save billions of pounds in the future.

Early intervention in what?

And we will insist that all the proceeds from the sale of our stakes in Lloyds and RBS are used not for a frivolous pre-election giveaway – but instead that every penny of profit will be used to repay the national debt.

How do you prevent a pre-election giveaway after the election? Or is this a promise not to have a giveaway in 2020?

Conference, fiscal responsibility in the national interest.

And we will have to make other decisions which I know will not be popular with everyone.

At a time when the public services that pensioners rely on are under such pressure, we will stop paying the winter fuel allowance to the richest five per cent of pensioners.

£105m

Over the long-term, as life expectancy rises, we will need to continue to raise the retirement age to keep our pensions system affordable.

This could be a positive or a negative depending on how fast it rises. This is the only potential big ticket item that I have heard suggested.

We will cap structural social security spending and keep the benefits cap, but we will make sure it properly reflects local housing costs.

Not an extra saving, just keeping all or most of a saving that has already been proposed and bitterly condemned.

I want to see child benefit rising again in line with inflation in the next parliament, but we will not spend money we cannot afford. So for the first two years of the next parliament, we will cap the rise in child benefit at one per cent. It will save £400 million in the next Parliament. And all the savings will go towards reducing the deficit.

£80m a year then?

I make that £235,600,000, or approximately a third of one percent of the deficit. Add a few savings and tax rises announced elsewhere and we are still at less than £2bn. Revise these numbers upwards, a lot, and we still won’t have seen either very much clarity or very much toughness.

I put it to you Ed Balls and Ed Miliband: If you say you couldn’t be clearer, if you say you’re going to be very tough, there needs to be some illustration of this in your speeches and that means politically difficult measures that raise or save a much larger amount of money. And if you can’t find an illustration because they all look too similar to what the coalition has been doing and you have been condemning for 4 years, then you owe us an apology.

* Joe Otten was the candidate for Sheffield Heeley in June 2017, is a councillor in Sheffield and is Tuesday editor of Liberal Democrat Voice.

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34 Comments

  • Zero credibility from Balls, with quotes like “three years of lost growth at the start of this parliament”

    What “lost growth” is he talking about? The economy carried on growing all the way through, albeit slowly, despite the oil price hike, Eurozone crisis, North Sea oil and gas production plummeting, massive household indebtedness from before 2008, and the contraction of the financial services sector.

    How would he have made the economy grow any faster? Oh, I know. He would have *borrowed more*, so meaning that by now the deficit reduction would be even further behind than it is now.

    The real challenge for the Lib Dems is not to dwell on Labour’s multiple inconsistencies and inaccuracies, which unfortunately still seem to be convincing many of our 2010 voters to back them, but to set out a positive, coherent plan of our own for the next few years. Based on the pre-manifesto, I’m still not getting much of the vision thing from our leadership. Until we have that, those few of us that are left aren’t going to have much to go out and tell the voters about when we ring on their doorbells in the next few months.

  • @Joe Otten

    I am sure a lot of people are far more interested in what the Liberal Democrats are going to do?

    You are about to agree to the Autumn Statement which will cover the years over the next parliament

    You are also going to sign up to the 2015 Budget in March (2 months) before the 2015 general election.

    I take it Danny Alexanders Conference Speech is going to reflect exactly what has been agreed and signed up to with the Treasury and the Quad and your manifesto will reflect this also?

  • matt

    The “me too- ism” of Clegg and Alexander is only too obvious. it is not just on the economy.

    From the economy, to EVEL (English Votes for English Laws), to the rush to war , the absence of any sign of a distinctive Liberal Democrat position or any desire to communicate a Liberal perspective is depressing.

    To be fair to Danny Alexander he did for one day (17 September) express a different view on EVEL. But nobody noticed because nobody listens to Danny, not even Clegg.

  • David Evershed 25th Sep '14 - 3:58pm

    All political parties want to give people an election message that they will tax them less but spend more on public services. This is because parties that promise to cut spending and tax more don’t think they will get elected – and are probably right most of the time..

    Last year the Government spent £100 billion more than its income from tax and duties. This year will also see a deficit of about £100 billion. We are getting close to an unsustainable position where investors will no longer be prepared to make further loans to fund the deficit or refund maturing loans.

    The coalition has held back on cuts and tax increases during the recession to avoid a slump. However, we are back in the good times now and should repair the roof while the sun is shining. We have a brief opportunity to stop the downward spiral which can only lead to a very severe jolt when the loans stop coming, as happened in Greece.

    Given current Lib Dem support, we have nothing to lose by taking the radical position of telling people the truth about how bad government finances really are. So I suggest Lib Dems say how much they will increase taxation, cut welfare and cut government spending to close the £100bn gap – challenging other parties to do the same.

    At least people will not be able to say we are making promises on spending that can not be kept in government (as happened with tuition fees) and Labour continue to do.

  • Bill Le Breton 25th Sep '14 - 4:49pm

    Our very own Adam Corlett is THE expert on this. He has now moved to the Resolution Foundation which has recently published an important paper on this subject.

    An excellent commentary of this report along with its key diagrams can be found here. http://flipchartfairytales.wordpress.com/2014/09/22/the-2015-dilemma-revised-edition/

    The truth is that all three significant parties are up a creak without a paddle on this one. None of the figures add up .

    Like Matt above I have been wondering how the coalition can agree a five year spending and taxation plan in December in the Autumn statement, one hopes that they will agree to disagree on years 2016/2020. Let along a 2015/16 budget. We should have an election in late February so that the winners can put their budget through at the traditional budget time of late March.

    On top of this the recovery in NGDP terms is looking distinctly groggy. Present tax income looks sick, especially from self assessment as Ben Chu and others recently explored on Twitter. The NGDP figure for q2 is out next week and some hefty revisions so the picture will be clearer but there are signs enough already.

    Monetary policy appears steady but at a level consistent with steady inflation expectations at around 2% for CPI, so if NGDP growth is crawling at 3% then the OBR assumptions at Budget time 2014and which underpin the 3 parties developing manifesto positions on tax, spend and the deficit look even worse.

    If people are calling for LDs to be realistic in their position on these then they should uncouple from labour and the Tories and say that even the current budget cannot be in surplus by the end of the next Parliament. To aim to do so without much more monetary stimulus and an end to all talk of interest rate rises for the foreseeable future is dishonest or self-deluding. You simply cannot cut enough services or raise tax sufficiently to do what all three party leaders are pledging if there is no significant monetary easing.

    And interestingly Miliband’s comment that Labour can start reducing the national debt by the end of the next Parliament is not what Labour are saying. See Adam Corlett’s excellent blog to understand what a balanced budget can mean.

    Finally the UK faces an Age of Austerity unless we go for growth, which means easing the the Bank of England’s 2% inflation target and adding an employment target to it! better still setting it an NGDP target of 5%. That way we’d get even more people working, paying tax and increasing their life chances.

  • Andrew Watson 25th Sep '14 - 4:52pm

    Seems fair enough for Balls to ask for the OBR to look at the figures and such a procedure might prevent politicians from making unrealistic pledges, like the one on tuition fees. What are Messrs Otten and his chum Osborne scared of? One forecast I’ll make is that Joe Otten won’t get close to winning the marginal Sheffield Central seat, although Clegg is as safe as houses in Hallam.

  • For once I agree with Joe Otten. I hope he will apply a similar analysis to the Tory, Lib Dem, Green and UKIP party conferences.

  • Consider the 5% cut on ministerial pay after the increase in 2015 it is still a fine pay increase, if they think a plan of £2.5b on NHS will give us a warm cozy feel think again it’s not even inflation coupled with they started the using private services

  • Little Jackie Paper 25th Sep '14 - 6:47pm

    Bill le Breton – ‘You simply cannot cut enough services or raise tax sufficiently to do what all three party leaders are pledging if there is no significant monetary easing.’

    Well exactly. In the current Parliament the Coalition has engaged in a form of fiscal consolidation almost designed to duck the tough questions. The NHS and pensioners have seen ringfences to their budgets and the net effect plainly has been deeper cuts elsewhere. As you say, there’s barely anything else to cut yet the Conservative manifesto is probably going to contain a commitment to a staggeringly expensive triple lock pension. Labour it would appear are planning to throw more at the NHS. The LDP position will inevitably come clearer.

    At some point, someone is going to have to look into the camera and talk about cuts to areas presently protected. I can not see any other way this works. Whilst Balls’ removal of the fuel payment from some is welcome (and interestingly doesn’t seem to have been picked up by the media) it’s a tiny, tiny step. Short of significant increases in tax income the presently ringfenced budgets are going to have to join the new normal.

    Unless – of course – a decision is taken not to aim for an absolute surplus.

    There are, of course, some hideous politics here and post fees the LDP hardly has a fund of good will to draw on. However someone is going to have to get brave on this, possibly whilst trying to sell shares in a bank racking up fearsome losses. Not nice.

  • Of interest is http://www.ukpublicspending.co.uk/debt_brief.php which shows that in historic terms interest payments on the national debt is low in historic terms. I think that the Lib Dem position to achieve a budget except for 50% of capital spending is sensible as a) it makes sense to borrow to invest as companies and individuals do and b) we have seen the contortions of Gordon Brown and fiasco of PFI schemes if you try and keep it off the books.
    In general I would be happy to run a deficit slightly below nominal GDP growth which is say around 5% (inflation plus growth) as you are then reducing the overall cumulative debt as a percentage of GDP. In general (as we have seen!) the annual deficit can vary quite considerably and it is easy to get a little too hung up on numbers that seem high and apocalypse will approach soon.
    But we need to keep everything in context – Government interest payments per head of population (in constant prices) are around what they were under the Thatcher Government.

  • “I recall Labour only planned to halve the deficit in one parliament, so they can’t be too outraged if this is roughly what happens.”

    In four years, not one Parliament. But you’re rather missing Balls’ point, which is that if the economy had continued to grow at a healthy rate (as it had been doing in Q2 2010 when the coalition took office), rather than wheezing to a halt for three years, then any deficit reductions could have been achieved with smaller cuts.

    Clegg admitted almost two years ago that the coalition had strangled growth by cutting capital spending as soon as it came to office, and that this had made the deficit worse – exactly as Labour had predicted it would. I think you must have missed that one.

    “It would make more sense for a party that lives and breathes to spend more money to take this election off and concentrate on 2020.”

    That old chestnut – as if the Lib Dem 2001, 2005 and 2010 manifestoes were promising to spend LESS money than Labour. (Fact: they weren’t.)

  • Stephen Donnelly 25th Sep '14 - 9:15pm

    I agree with the main thrust of the debate above.

    If we are going to restore credibility to the political process we need to force politicians to tell the truth about public finances and the NHS. Starting with our own party. As I have said on other threads……what do we have to lose.

    The flipchartfairytales links are well worth a look. BTW.

  • Bill Le Breton 26th Sep '14 - 5:21am

    Stephen D, yes the flip chart fairy blog I linked to is a great primer on this. But I was hoping Adam Corlett might have stepped in to link to his two blogs with fantastic diagrams on ‘what is a surplus?’ Try putting Adam Corlett Blogg into a search engine. The three leaders do tend to get confused by the concept.

    I agree a lot with Michael. Using NGDP as a measure so that the aim is reducing debt as a percentage of NGDP is surely more feasible. But I have to say that some really good NGDP watchers think that it is now again growing at well under 5% which will make this task very hard. Still, as I have written here for five years now, if we instructed the Bank of England to targeted NGDP growth of around 5 we would get 5%. And the certainty and stability that gives firms is a lot better than all the talk of austerity that so frightened everyone, businesses and households in 2010 and which along with an incompetent monetary Policy Committee killed off the 2010 recovery, that we should not deny was taking place.

    The pursuit of the 2% inflation (forecast) target has been the bane of the British economy since about 2004, it was responsible for the debt rush 2003/08 and responsible for the crash 08/09.

    On the fiscal side, by daring to be different on the question of the deficit, by excluding all of infrastructure expenditure from our ‘fiscal Rule’ we could set out an imaginative Programme for Renewal. By contemplating a 2% deficit by the end of the next Parliament we could do some imaginative tax cutting and link some of that to firms that set a minimum wage at the ‘living wage’. This needs to be accompanied by a strong word to the Bank not to try an offsetting tightening.

    With our position in the national psyche we have nothing to loose by being bold, imaginative, determined and expansive. I recommend searching for our 1929 manifesto written by Keynes and influenced by Beveridge, ‘We Can Conquer Unemployment’. Perhaps ours should be ‘Rebuilding the United Kingdom’.

  • Based on the OBR numbers, both the IFS and the Resolution Foundation came up with a similar figure for the shortfall. To avoid any more cuts to social security or public service spending, or any additional borrowing, the next government will need an extra £37 billion a year. Unless that is raised in tax, the government will have to borrow more or cut more during the next parliament.

    So far, all three parties have been fairly quiet about tax, apart from the odd promise that won’t actually raise much money. The difference between the main parties, therefore, is not cuts or no cuts but how deep the cuts should be and over what period. It all means more austerity, it’s just that the blend is different.

    These two paragraphs come from the website referenced by Bill le Breton and Stephen Donnelly —
    http://flipchartfairytales.wordpress.com/2014/09/22/the-2015-dilemma-revised-edition/

    My only criticism of this site is that sets out a choice between tax rises and welfare cuts. I have listed before in LDV alternative areas of government expenditure which could be cut, in the 2010 election our party held up Trident as an obvious area where a massive cut could be made.

  • If you laid all the world’s economists end to end. . . . . 😉

    The rubbish being spewed out by many on both sides in the Scottish independence/devolution arguments, without seriously being dissected or questioned, is easily mirrored in the UK economic debate. Politicians get away with ‘murder’ largely because the media who should be holding them to account, want to believe the same fairy tales and largely belong to an elite who are cocooned away from having to face reality.

    In the case of the economy, the prime cause of the failure to address reality with a modicum of honesty is a state of collective Denial. Britain (in or out of Europe) faces a globe where our cheap raw materials markets and our market for inflated price exports have vanished and are still vanishing, leaving us increasingly-dependent on a financial services sector which is based in London for a mixture of historic and comfort reasons but, with the state of global computers, could move away at a disturbing speed if it so-wished. Hence, terrified governments of whatever Party prostitute themselves before The City’. In addition, we have been, for some years, the ‘beneficiary’ of the incoming flight of (a) oligarch capital and (b) cheap Eastern European labour, both of which distort our economy. The latter, which comes here for ‘safety/comfort’ has created a ‘mini-Dubai’ in parts of north and West London which should seriously-concern genuine liberals. The relative attractions of the UK for both sets of immigrants may be very different in 20 years or so.

    The ‘simple’ task of the Treasury is to enable and encourage the country to utilise ingenuity to produce more comfort for less effort – and to ensure that capital flows, interest rates and confidence are available to support this. In an economy where the wielders of ‘big’ private enterprise money do not really trust a country (and continent) in relative decline, then government sometimes has to ensure major capital investments in projects which are genuinely going to succeed and create further opportunities to succeed. Of course, if they make the wrong choices, resources are wasted and the debt builds up more!

    There was a global climate conference this week. One or two optimistic noises came out of it about slowing down the rate of acceleration of the out-of-control beast which could genuinely cost us the earth. In the forty years since the Environment came ‘on stream’ as a topic of wide concern, I have seen little at all genuine progress in this country towards a genuinely-sustainable economy which would require substantial changes in the way we all live. It is only if we get ahead on this agenda that our children and grandchildren will stand a decent chance. As we see China rollercoasting away towards US-style car use and ownership and choking itself to death in the process, it is rather sad to have to repeat something from a Liberal Party conference motion of 1972 or 1973:

    “Economic growth as conventionally defined is neither achievable nor desirable.” It is our job to produce economic growth in forms which CAN sustain a globe which gives comfort without devouring its environment’s resources, overheating and poisoning itself. Which Parties are offering that?

  • Matthew Huntbach 26th Sep '14 - 10:48am

    David Evershed

    Given current Lib Dem support, we have nothing to lose by taking the radical position of telling people the truth about how bad government finances really are. So I suggest Lib Dems say how much they will increase taxation, cut welfare and cut government spending to close the £100bn gap – challenging other parties to do the same

    Indeed. Read your average newspaper, or engage in saloon bar conversation about politics, and you will find it full of people saying it is absolutely essential for more public money to be spent on this or that, and full of complaints about how bad any increase in taxation would be. I don’t engage in political discussion anywhere outside this site now, because I am just fed up with the way that it inevitably moves to “politicians are dirty rotten people because they won’t do …” where … generally means the impossible, often spending loads more money but not raising the taxes to do it. Once people in the conversation have all agreed that politicians are dirty rotten people because they won’t do …, they sit back smug and satisfied and say “look, we’ve put the world to rights”. And if you attempt to challenge them, especially if they know you’re a supporter of a particular political party, it’s “Oh, you’re one of THEM, that’s why you’re saying that”.

    So, politicians are dirty rotten people if they won’t increase public spending, dirty rotten people if they propose increasing taxes, dirty rotten people if they won’t lay out a fixed five year plan for the future which they will obey rigidly no matter what happens, dirty rotten people if all they’ll do is obey a fixed party line, dirty rotten people if they won’t tell the truth, and dirty rotten people if they won’t “give straight answers” and instead try to use the line “it isn’t as simple as that”.

    Well it’s easy to adopt that line if you’re sitting in a saloon bar or whatever is the modern equivalent. Or a member of a pressure group engaged in some smug protest where all you think about is that one issue the pressure group is pressurising about and don’t have to think about the balancing consequences of meeting that demand. Or a journalist on any of the national newspapers. Or Jeremy Paxman and the like, aggressively interviewing politicians and thinking you are so smug and superior and they are so dirty and rotten. But if you actually really do have to put together coherent policies that work as a whole, not so easy.

    We ourselves have been hit by the tuition fees thing, because your smug types have not been able to put together the fact that if you want to fully subsidise half the 18 year olds going to university for three years, it’s going to cost a bit, so that has to be paid somehow, and we played along with that in the 2010 general election. I think we need to tell the truth – “If you want X, this is what it costs, now how do you want to raise the money to pay for it?”.

    See how Labour has been hit with its very modest proposals for a property tax on properties which would sell for hugely more than the average person could afford – it’s been denounced as a “tax on London”, a “death tax” and so on. Well fine, but if you want a decent NHS it has to be paid for somehow. If not that way, how?

    Labour is hoping to bring in the votes that used to go to us which we have lost over the tuition fees issue. So if we are dirty rotten people for that, for being unable to persuade the Tories to increase taxes to what it would cost to meet our “pledge”, what would Labour do? I think they have a duty to say. So far all they’ve come up with is a suggestion to reduce tuition fees to £6000, and only vague hand-waving gestures on how to balance the rest – in reality it would have to be done by MASSIVE cuts to universities. Bear that in mind next time someone attacks you as “dirty rotten Liberal Democrat for what you did over tuition fees”.

  • Matthew Huntbach 26th Sep '14 - 10:50am

    Tony Dawson

    it is rather sad to have to repeat something from a Liberal Party conference motion of 1972 or 1973:

    “Economic growth as conventionally defined is neither achievable nor desirable.”

    I think it was somewhat later than that. Late 1970s or early 1980s.

  • Tony Dawson and Matthew Huntbach

    I think Matthew is ight on timing. Without rummaging through piles of paper my best guess is 77.

    If I recall correctly Richard Wainwright (who was otherwise excellent) spoke against in his role as party treasury spokesperson and he used all the old conventional economic arguments as to why growth was the answer to everything. He was wrong on that point.

    Growth can be useful and we could do with some over the next five years to stop Osborne and co attacking public services with a slash and burn agenda. Sustainable growth is possible but this seems to be lost on some on the right wing of UK politics.

  • @ Stuart
    “I recall Labour only planned to halve the deficit in one parliament, so they can’t be too outraged if this is roughly what happens.” In four years, not one Parliament.
    Oh right. 4 years versus one parliament. A completely different kettle of fish clearly.

    “But you’re rather missing Balls’ point, which is that if the economy had continued to grow at a healthy rate …then any deficit reductions could have been achieved with smaller cuts.”
    Yes clearly with every economy in Europe going into reverse after the Greek sovereign default in 2010 it was only to be expected that unlike every other country in Europe, Britain would have special privileges and rocket ahead straight away. Anything else is to be seen as a failure.

    “Clegg admitted almost two years ago that the coalition had strangled growth by cutting capital spending as soon as it came to office, and that this had made the deficit worse – exactly as Labour had predicted it would. I think you must have missed that one.”
    Except look at what’s happened since. Capex is up. And in judging Ed and Ed, it’s notable what Labour DON’T say about their spending priorities. I think it’s fair to say that in order to balance the books Labour is planning to cut Capital Expenditure hugely. They’ve already said as much regarding Crossrail (though they seem to have backtracked on that recently).

    Labour’s hypocricy and dishonesty on the economy is breathtaking. They say the Government should not have cut as far and as fast, then they complain that the deficit hasn’t been reduced by double. They complain about lack of growth, ignoring the record growth and record employment here now. They claim they would be tough but denigrate the Coalition for doing the same. And worst of all they must surely realise that their numbers don’t even come close to adding up. The bankers bonus tax has been spend probably ten times over now – committed to perhaps £40-£50bn of spending. Given bank bonuses last year totalled about £1bn that’s going to be a tough call.

  • @Joe Otten
    Please stop trying to blame the coalition’s disastrous cuts in capital expenditure on Labour. The coalition cut capital expenditure more than Labour planned to. Even Nick Clegg admitted the government got that wrong.

    http://blogs.channel4.com/factcheck/chancellor-runs-out-of-road-factcheck/12616

    “What they will struggle with is a position that everything was fine in 2010, and is terrible in 2015,”

    Fortunate then that they aren’t taking that position. See some of the bits you snipped from Balls’ speech.

    @Julian Tisi
    They complain about lack of growth, ignoring the record growth and record employment here now.”

    Record growth, here, now? Which country are you writing from? It can’t be Britain.

  • Matthew Huntbach

    “See how Labour has been hit with its very modest proposals for a property tax on properties which would sell for hugely more than the average person could afford – it’s been denounced as a “tax on London”, a “death tax” and so on. Well fine, but if you want a decent NHS it has to be paid for somehow. If not that way, how?”

    The problem is that it won’t raise the money that is claimed, it will create perverse incentives and become an impossible mess, which any government implementing will be too proud to drop and involve bureaucracy and much wasted effort..

    Just implement a LVT (appropriately structured, and will take time) any thing like the “mansion tax” will be a disaster. We will have perverse behavior all over the place in response to it.

  • Peter Andrews 27th Sep '14 - 10:22am

    I think we have cut alot of what it is possible to cut without totally decimating services.. I think its about time Parties started talking serious about how they are going to raise taxes. I think the simple fact is the basic rate of income tax is going to have to rise and we would do well to be honest with the electorate and say so.

    If we raised the basic rate of income tax to 22%, made the higher rate 43% and raised the current 45% rte to 50% then we would be talking some serious extra tax revenues. We might even be able to afford to raise the NI threshold and/or the personal allowance whilst still eliminating the structural deficit.

  • @Peter Andrews

    and cue post from jedi lol

  • @Jedi

    I thought you were against Tax Increases, My mistake obviously, I apologize for that

    Personally I would like to see the
    basic rate band rise to 21%
    High Rate Band stay as it is 40%
    Additional rate to return to 50%

    I also think the tax relief on pensions should reduce further to the median wage of £25’500,
    I do not understand why people should be able to pay into exceptionally large large pension pots and get more in tax relief on that years allowance than the majority of the rest of the country earns in a single years salary. It’s absurd

  • @Joe Otten

    Now the Tory chancellor has delivered his speech to conference can we look forward to your analysis on this?

  • Matthew Huntbach 29th Sep '14 - 11:49pm

    jedibeeftrix

    likewise we have intelligent people on the tory side arguing that £12b of welfare support must be axed to enable their vision of individual empowerment (negative liberty)

    So how is this to be achieved? We already have people on the verge of starvation, we have these food banks set up to feed them. Do you want people actually to die? Would that be your “empowerment”? The Tories are talking about forcing people out of their homes through an enhanced form of “bedroom tax”. How is that “empowerment”? We would not be paying so much in “welfare” had it not been for the Tories selling off much of the cost-price housing that used to exist to be let out to those who could not afford to buy. Now, those people are housed in private rented accommodation, at three or so times what the few remaining council houses of the same size are still rented out at, and the extra is paid for by housing benefit. From the taxpayer to the private landlord, thanks to Mrs Thatcher. So please stop pretending it goes into the hands of some sort of “undeserving poor”.

    If we cut the NHS in the way you want, then the health care it currently provides will have to be paid for privately. Or, if you can’t afford it, you get sick and die or live a miserable life. How is this “empowerment”? I have paid hundreds of pounds this year on glasses I need to see and on dental treatment I need to keep me pain free, as these things are not available free of cost on the NHS. Well, I very much do NOT feel “empowered” by having to pay this, if I paid the same in taxation so it could be provided through the NHS how would I supposedly be less “empowered”?

  • Matthew Huntbach 29th Sep '14 - 11:52pm

    jedibeeftrix

    i freely admit that my sympathy lies with the latter, thus my delight that tax (and spend) as a proportion of GDP will sink to 38% of GDP by the end of the decade (provided labour don’t win – fingers crossed)

    So, the rich will grow richer because they will pay less tax. That will give them the power to buy more luxuries.

    The poor will grow sicker because they no longer get health care and can’t afford to pay it, they will be thrown onto the streets and have nowhere to live because of caps on rent subsidy. And you say this is “empowerment”?

  • Matthew Huntbach 29th Sep '14 - 11:59pm

    Psi

    Just implement a LVT (appropriately structured, and will take time) any thing like the “mansion tax” will be a disaster. We will have perverse behavior all over the place in response to it.

    The “mansion tax” is a teeny-weeny property tax, just levied on properties which are valued way above what an ordinary person needs to live comfortably – even in London. But see the howls against it.

    So how do you think a hugely greater property tax like LVT could be implemented? The arguments that are used against the “MansionTax” would apply hugely greater to LVT, the sob stories about little old ladies forced out of their homes because they have no income to pay the LVT would apply to hundreds of thousand of little old ladies.

    I myself think the underlying arguments for LVT are good, and the little old lady sob stories can be dispensed with by, er well, the Tories and the right-wing press call it a “death tax”, so maybe not so easy to persuade the people to buy it.

    In short, yes, I agree with you on LVT, but “just” is a funny word to use when talking about implementing it.

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