In politics, timing is everything. 1992 turned out to be a good election to lose. 2010 may turn out to be similarly cursed. History would have been very different if Heath had triumphed in 1974, Churchill in 1945 or Callaghan in 1979.
Apart from the headline events, though, the timing of smaller occurrences can have a dramatic impact on the political culture. Anyone who has looked into the last recession knows that it had very little to do with run of the mill public spending. As the banks collapsed, Government receipts went with them. Add to this the cost of keeping the banks afloat, and it is soon obvious why the gap between Government income and expenditure grew so quickly. Explaining this now, however, is utterly pointless. The notion that Labour overspent and were financially imprudent is so firmly entrenched in people's minds that it is now almost impossible to shift. Every time a Tory spokesman is featured in a news report, they allude back to this allegation, particularly the ubiquitous Frances Maude, who seems unable to answer a question without referring to 'The Deficit'. It will take a long time and a lot of political skill to move the debate on.
How did this happen? Well, during a key moment last summer, just as 'Dave & Nick' were chumming up to each other, Labour looked inwards. Just at the time when the coalition were putting their proposals and arguments forward, Labour held a leadership contest full of nice people and nice sentiments. At the very time that Ed Balls could have taken George Osborne to pieces, he was more concerned with trying to find differences between himself and Andy Burnham. Just when David Milliband could have turned the attack on Nick Clegg, he was congratulating himself on nominating Diane Abbot. Of course Labour needed to elect a new leader. Just not then.
So where do we go from here? Well, I sense that there is another, far more vague idea that goes hand-in-hand with blaming Labour for the deficit. Around a third of people seem to like the idea of slashing public spending. Another 15 to 20% of people seem prepared to go along with it for now. However, what people do not seem to be registering is that these measures are not temporary.
There is a gap between income and spending. No-one would deny that. By bringing expenditure down, the Tories may very well close that gap. What happens then? Precisely nothing. There seems to be a feeling that the deficit is like an overdraft, that as soon as it is paid off, we can start spending again. A better way of looking at it would be to study the analogy of the household budget. At the moment, we are spending more than our income. We therefore have a choice. The Tories are happy with a low income and will cut spending accordingly. Labour should be arguing that, rather than slashing outgoings, we should be taking our income back up the levels we previously enjoyed, allowing us to afford the essentials - as well as 'luxuries' like police, libraries and SureStart.
This, of course, requires economic growth, something which the Tories are not renowned for achieving. After the last recession, Norman Lamont became a laughing stock for his continual reference to 'green shoots of recovery' despite the economy doing a fair impression of the Sahara. By not stimulating demand, keeping unemployment high and steadfastly refusing to invest, the coalition are making rods for their own backs, ensuring that growth will be either very slow or non-existent. The economy has flatlined in the last twelve months, a contrast to the modest but palpable growth occurring when Labour left office. Under the fiscal regime currently being imposed by George Osborne and Danny Alexander, unemployment will remain high, welfare bills will eat a large part of the available cash and businesses will go to the wall for want of trained staff.
Giving local communities the ability to vary business rates, introducing a National Training Credit and giving new businesses a tax holiday would all go towards kick-starting the economy, not to mention the feel-good factor. Unfortunately, all the Tories can offer is a mixture of cuts, unemployment and the prospect of interest rate rises.
The Tories have already patented the hymn sheet. Labour needs to start singing from a new one if it is to sound any different from the Conservative Cutting Choir.
Apart from the headline events, though, the timing of smaller occurrences can have a dramatic impact on the political culture. Anyone who has looked into the last recession knows that it had very little to do with run of the mill public spending. As the banks collapsed, Government receipts went with them. Add to this the cost of keeping the banks afloat, and it is soon obvious why the gap between Government income and expenditure grew so quickly. Explaining this now, however, is utterly pointless. The notion that Labour overspent and were financially imprudent is so firmly entrenched in people's minds that it is now almost impossible to shift. Every time a Tory spokesman is featured in a news report, they allude back to this allegation, particularly the ubiquitous Frances Maude, who seems unable to answer a question without referring to 'The Deficit'. It will take a long time and a lot of political skill to move the debate on.
How did this happen? Well, during a key moment last summer, just as 'Dave & Nick' were chumming up to each other, Labour looked inwards. Just at the time when the coalition were putting their proposals and arguments forward, Labour held a leadership contest full of nice people and nice sentiments. At the very time that Ed Balls could have taken George Osborne to pieces, he was more concerned with trying to find differences between himself and Andy Burnham. Just when David Milliband could have turned the attack on Nick Clegg, he was congratulating himself on nominating Diane Abbot. Of course Labour needed to elect a new leader. Just not then.
So where do we go from here? Well, I sense that there is another, far more vague idea that goes hand-in-hand with blaming Labour for the deficit. Around a third of people seem to like the idea of slashing public spending. Another 15 to 20% of people seem prepared to go along with it for now. However, what people do not seem to be registering is that these measures are not temporary.
There is a gap between income and spending. No-one would deny that. By bringing expenditure down, the Tories may very well close that gap. What happens then? Precisely nothing. There seems to be a feeling that the deficit is like an overdraft, that as soon as it is paid off, we can start spending again. A better way of looking at it would be to study the analogy of the household budget. At the moment, we are spending more than our income. We therefore have a choice. The Tories are happy with a low income and will cut spending accordingly. Labour should be arguing that, rather than slashing outgoings, we should be taking our income back up the levels we previously enjoyed, allowing us to afford the essentials - as well as 'luxuries' like police, libraries and SureStart.
This, of course, requires economic growth, something which the Tories are not renowned for achieving. After the last recession, Norman Lamont became a laughing stock for his continual reference to 'green shoots of recovery' despite the economy doing a fair impression of the Sahara. By not stimulating demand, keeping unemployment high and steadfastly refusing to invest, the coalition are making rods for their own backs, ensuring that growth will be either very slow or non-existent. The economy has flatlined in the last twelve months, a contrast to the modest but palpable growth occurring when Labour left office. Under the fiscal regime currently being imposed by George Osborne and Danny Alexander, unemployment will remain high, welfare bills will eat a large part of the available cash and businesses will go to the wall for want of trained staff.
Giving local communities the ability to vary business rates, introducing a National Training Credit and giving new businesses a tax holiday would all go towards kick-starting the economy, not to mention the feel-good factor. Unfortunately, all the Tories can offer is a mixture of cuts, unemployment and the prospect of interest rate rises.
The Tories have already patented the hymn sheet. Labour needs to start singing from a new one if it is to sound any different from the Conservative Cutting Choir.
Good post - totally agree that "The notion that Labour overspent and were financially imprudent is so firmly entrenched in people's minds that it is now almost impossible to shift" - however it is likewise that the 'Cuts' are only to 2007 spending levels (check me on this) - so the coalition is being accussed of 'over-cutting' in the same vein as Labour was accussed of 'over-spending'.
ReplyDeleteI think your revenue raising points are valid and I take huge issue that more tax raising policies are not being sought.
In addition, the graduate tax is currently getting conflated into the deficit issue - when it obviously is an ideological policy.
Now we could pick holes in both side (or 3 - if you consider the LAB/Con/Lib) - but it is preferable that the deficit is tackled quickly just to keep interest rates low.
As Clinton said..."It's the economic stupid" - and that's where the actual power lies - the money markets. Afterall, inflation can just go eat my debt away - cheers!!!