Miliband: Labour won’t reverse Osborne’s cuts
ED Miliband yesterday accepted Coalition spending cuts while simultaneously holding out the promise of radical change along the lines of the 1945 Attlee government if Labour is re-elected.
The apparently contradictory message emerged in an interview in which the Labour leader harked back to the post-war reforms of the British state, and a speech in which he said the party must face “hard reality” and endure Coalition austerity in order to be “credible” with voters.
This Wednesday, George Osborne will set out a further £11.5 billion of austerity cuts when he announces the 2015-16 spending round.
The Chancellor’s first spending review since October 2010 will detail £740bn of spending across 17 Government departments.
With education, health and overseas aid – some 60% of department spending – ringfenced against cuts, the burden falls on other areas, such as welfare.
Instead of a 2.8% cut all round, unprotected departments must cut an average of 8% instead.
Osborne’s last review, which cut overall spending by 19%, was supposed to fix the UK’s troubled finances within a single parliament.
But lack of growth in the economy has forced him to extend the cuts another year, past the General Election due in May 2015.
In a speech to Labour’s National Policy Forum in Birmingham, Miliband said Labour would not borrow to reverse the cuts if it won in 2015.
“Nobody here should be under any illusions: the next Labour government will have to plan in 2015 for falling departmental spending.
“Our starting point for 2015-16 is that we won’t be able to reverse the cuts in day-to-day current spending unless it is fully funded from savings elsewhere or extra revenue, not from more borrowing.
“So when George Osborne stands up next week and announces his cuts in day-to-day spending, we won’t be able to promise now to reverse them because we’ve got to be absolutely crystal clear about where the money is coming from.
“We will show the discipline the challenge of our times demand. It is the only way we can credibly change our country. It’s a hard reality.
“I am clear about it. [Shadow chancellor] Ed Balls is clear about it. And everyone in the Labour Party should be clear about it too.”
Labour has already said it would end the winter-fuel allowance to better-off pensioners, and not reverse child-benefit cuts for households with someone earning over £50,000 a year.
In an interview published just before the speech, Miliband said high spending was not the only route to social justice, and that Clement Attlee’s government had created the welfare state on a balanced budget.
Pledging to devolve more power to councils and stop developers hoarding land, he said: “If you go into the roots of the Labour party and think about our most dramatic, society-changing government, the 1945 government, we all remember the NHS, building homes, and the family allowance. Believe it or not, they were running a budget surplus. It shows a government can be remembered in difficult times for doing great things.”
Conservative Party chairman Grant Shapps said: “Ed Miliband’s refusal to admit that Labour spent and borrowed too much in government, and his call for more spending and borrowing now, shows he’s too weak to stick to his promise not to spend and borrow more.
“He only offers more spending, more borrowing and more debt – the same old Labour approach that got us into this mess in the first place.”
Stewart Hosie, the SNP Treasury spokesman, said it was “depressing” that Labour had signed up to Osborne’s “chosen road of cuts, cuts and more cuts with a lost decade of austerity facing us all”.
SNP debate on Common Weal vision of Scotland after independence
Bill Kidd, the SNP chief whip at Holyrood, also called last night for the Common Weal to be debated formally by the full conference.
He said he would be tabling a motion through his Glasgow Anniesland branch to that effect, and with other SNP branches doing likewise, he said it would be near impossible for the party to avoid a main hall debate in October.
MSP Christina McKelvie, convener of the SNP Parliamentary Trade Union Group, also said she wanted Common Weal debated, provided the underlying motion was sound.
The Reid Foundation last week launched the scottishcommonweal.org website with a call for ideas from academics and the public which could be applied to a post-Yes Scotland, based on policies working in Germany and Scandinavia.
Its vision includes a bigger welfare state with lifelong universal services; a diverse economy with high-skill, high-wage jobs and firms fostered by state lending; and greater local democracy and gender equality.
The Church of Scotland has set up an in-house Common Weal group to analyse the idea.
Last week, Kidd tabled a Holyrood motion backing the Common Weal as “aspirational” – it was signed overnight by one-fifth of SNP MSPs.
It is understood Deputy First Minister Nicola Sturgeon is broadly supportive of Common Weal, though wary of its tax implications.
The First Minister is thought to be cooler about the idea, and is waiting to see how party activists react to it before taking a stance.
A Common Weal debate is potentially awkward for Salmond, as it could expose a left-right split, and link independence with high taxes.
The Nordic model is also a direct challenge to Salmond’s plan to attract big business to an independent Scotland, with the gimmick of slashing 3p off corporation tax.
Kidd said the Common Weal idea was already down for debate at the biggest fringe venue in Perth, the 300-seat Salutation Hotel, but he also wanted a main hall discussion.
He said: “I believe this is a good way forward. It’s the kind of thing we should be looking at as a political party to try to encourage people to vote yes in the referendum.”
McKelvie added: “The Common Weal is about creating a society where everybody is valued.
“We need to be working towards a manifesto for 2016. We need to have something in that manifesto that gives people a tangible difference from what they’ve got right now.
“I think the way to do it is to give people the rights they need to be protected and supported and nurtured through their lifetime.”
Tory MSP Murdo Fraser said the SNP had to choose whether it was a party of Scandinavian high taxes or low taxes aimed at business.
He said: “Both these future visions can’t be right and the SNP will have to choose one or the other.”
An SNP spokesman said the party had a “proud tradition of open debate at conference” and that all elected branches were invited to select resolutions for debate.
Why the Kirk is looking at Common Weal’s plans
With the referendum dominating the political landscape in Scotland, now is the time where we can all stop to think: “What kind of Scotland do we want to imagine could be possible in the future, regardless of the outcome?”
The day after the referendum poll, many people will be bitterly disappointed. How can we plan now to overcome that disappointment with a shared purpose so that, regardless of the constitutional arrangement we end up with, we can work together for the common good?
Tax and spending by governments, on society’s behalf, has always been an issue which divides political opinion. In recent years we have seen questions on the one hand about tax avoidance and evasion and, on the other, blatant inaccuracies are being used about people in poverty to justify reforms and cuts to social security.
If you’ve ever played the computer game SimCity you’ll know that, as mayor of your community, you have a responsibility to keep your citizens happy – you have to provide infrastructure (such as transport, utilities, parks, education, culture, emergency services). You also have the power to set your tax rate; clicking to lower the rate produces cheers from your people, raising the rate will generate boos. A low tax rate might attract inward movement, but when you can’t pay for police or quality schools or road maintenance, people then get angry and will move elsewhere.
In real life, we all want Scandinavian quality of services at American levels of taxation. Realistically, we know this cannot happen, so which do we want? Perhaps unsurprisingly, the Church of Scotland would tend towards a society where sharing wealth, providing decent safety nets for those on the margins and helping every person to live life to their full potential would be a priority.
I know that giving a precious gift to a friend can be a joyful, exciting experience. Yet generosity when paying taxes is hard to find. Why do people often resent giving money to society in this way, yet personal gifts (granny giving a grandchild a tenner), or fundraising for charity is commonplace?
There have been many stories of tax avoidance recently, with big multinational companies taking every opportunity they can to avoid paying tax. Yet the stories of poverty in Scotland abound. Food banks are multiplying by the day and demand is growing, while welfare reforms continue apace. Can this be right? It is time for a rethink of how we share wealth, through tax and giving.
After the banking crisis we have to be vigilant and keep on asking the question, “What is the economy for?”. We can change things so that we don’t just go back to business as usual.
A fortnight ago, the Church of Scotland’s Church and Society Council, of which I am a member, agreed to form a working group focusing on issues surrounding the “Common Weal”. We will report our findings to the 2015 General Assembly.
We are at the start of a process to develop thinking in this area, and are embarking on a process and are keen that there is a bigger public debate which builds on our existing work.
Labouring with a lack of vision
EVEN in these hard times, is it too much to expect an opposition to oppose now and again?
Yesterday’s speech by Ed Miliband, on the eve of yet another round of austerity measures from Chancellor George Osborne, was a dispiriting affair.
Afraid of being branded profligate or a threat to the economy, the Labour leader told his party they must accept Osborne’s cuts for 2015-16 as part of a “hard reality”. Otherwise voters would not regard Labour as “credible” at the General Election otherwise, he warned.
But credibility requires consistency. Miliband and his shadow chancellor, Ed Balls, previously argued the Coalition cuts were driven by Tory ideology and a desire to shrink the state as much as possible by economic necessity.
But in choosing to accept rather than reverse those same cuts, Labour inevitably perpetuates that same ideology.
Even as economists and the International Monetary Fund warn that the UK economy is at risk of overdosing on austerity, Labour refuse to offer an alternative way.
Miliband may argue that Labour’s policies are very different, but accepting the cuts means living with their policy implications and limitations as well.
Under Tony Blair, sharp suits and bright ties were the uniform of New Labour. Miliband’s One Nation Labour seem to think only those in hairshirts are electable.
But this is not the case. Indeed, the smaller the differences between Labour and the Conservatives, the fewer reasons voters have to trade one for the other.
In marked contrast, this weekend also sees more developments in the Common Weal project, the left-wing vision of a fairer, more equal and economically healthier Scotland, founded on the best policies of Scandinavia and Germany.
As we report today, the Church of Scotland is looking seriously at the concept, and SNP activists will have a chance to debate it as they gather for their October conference. The Kirk’s engagement reinforces the point that Common Weal originated in civic society, not party politics.
It starts from a simple proposition: What do we want for Scotland and how do we get there? It is an optimistic approach – and realistic about the consequences for tax.
When set next to Labour’s narrow, pinched vision of the future – “What have we got and how do we manage with less?” – it is easy to see which idea might excite the public more.
The first year of the referendum has not, as Alex Salmond puts it, been a “phoney war”, but it has been one fought by the relatively small battalions of the political class.
Let us hope ideas like Common Weal and high-profile party debates can change that