Defending 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.