Another statement, another set of figures revised in the wrong direction

5th December, 2012 6:45 pm

One stood out for me above the rest. The Office for Budget Responsibility now says that growth this year will be -0.1%. That’s down from their forecasts of 2.8% in June 2010 and 0.8% in March this year. I’ve heard of margins of error, but really now, this is getting silly.

And what was announced today to address this? Not a lot that I could see. Lord Heseltine’s ‘No Stone Unturned’ report on growth contained 89 recommendations for Government. Heseltine’s review – which the Chancellor himself commissioned – got a cursory mention, warm words on some of the least consequential proposals and a pledge to respond formally in the Spring. This sounds suspiciously like a good hard kick into the long grass.

Ed Balls’ response focused heavily on the fact that projections on borrowing, debt and deficit are all going up, not down, and that the Chancellor will miss his target to have debt falling as a share of GDP by the end of this Parliament. Of course it’s right to highlight this failure. But there are two sides to this: it is a failure not just to reduce borrowing, but also to grow GDP.

To be fair Balls did mention this and reiterated a number of Labour proposals to boost growth: using the sale of the 4G spectrum to build more houses; a national insurance holiday for small businesses; and a repeat of the bank bonus tax to invest in jobs for young people.

But a focus on growth must be front and centre of all Labour comment on the economy. It is right and proper to point out that the Government is missing its target of eliminating the deficit in this Parliament. But the fact is, we wouldn’t have eliminated it in this Parliament either, and never promised otherwise. The message on growth is where the real difference and the real opportunity lies for Labour.

There were other aspects of the Statement which didn’t add up. Boasting of a string of tough new measures on tax avoidance, shortly before justifying a cut in the top rate of tax on the basis that people were avoiding it, was a prime example of this. Surely, George, it would make more sense to clamp down on tax avoidance then see how much the 50p rate raised, no?

There’s no doubt that some of this Statement will go down well in much of the media. The Mail will love the Welfare Uprating Bill, enshrining below inflation rises in benefit payments. The Sun will claim victory on the fuel duty cut. And many will cheer the resolute message that there will be no change in course on deficit reduction.

However, there seemed little in here to change the terms of the debate. Little that will restore Osborne’s reputation as a master strategist following his disastrous Budget in March. Little to ease the burden of those suffering most from cuts to public services and a squeeze in living standards. And precious little that leads me to believe that this set of growth forecasts will be any more accurate than the last.

We now know for sure that the deficit will be a fact of life well into the next Parliament. Therefore it will be the key battleground on which the next election is fought.

Labour will never win that election on a bidding war on who can cut the most.

Instead the two Eds must fight on a platform of growth, growth, growth.

Simon Fitzpatrick works on financial policy at Cicero Consulting.

To report anything from the comment section, please e-mail [email protected]

Latest

  • Featured News Polling Corbyn still in commanding position with members despite drop in popularity

    Corbyn still in commanding position with members despite drop in popularity

    Jeremy Corbyn has seen his popularity among Labour members fall dramatically in the last month – although he still has the support of a majority of the party’s grassroots. The poll of party members, carried out by YouGov for The Times this week, shows that if there were to be a leadership contest with Corbyn and a single challenger, the current Labour leader would narrowly win by 50 per cent to 47 per cent. When potential challengers are named, however, […]

    Read more →
  • News Scotland Time for Corbyn to consider his position, say Labour MSPs

    Time for Corbyn to consider his position, say Labour MSPs

    More than half of Labour’s Members of the Scottish Parliament have signed a statement calling on Jeremy Corbyn to consider his position as party leader. This comes several days after Scottish Labour leader Kezia Dugdale made similar comments about Corbyn’s position. In the public statement, signed by 13 of Scottish Labour’s 24 MSPs, the parliamentarians say that Corbyn should “reflect seriously” on Tuesday’s overwhelming vote of no confidence in Corbyn by Westminster MPs. They say they “believe that the Leader […]

    Read more →
  • Comment Featured John Mann: Chakrabarti’s anti-Semitism report gives a route out of this mess

    John Mann: Chakrabarti’s anti-Semitism report gives a route out of this mess

    There’s nothing quite like snatching defeat from the jaws of victory. On a day in which at least one major milestone in the fight against anti-Semitism in the Labour party was achieved the news instead, has focussed on the mishandling and outrageous racism at the launch event. Many outlets reported Jeremy Corbyn’s apparent equation of Israel and ISIS. Any correlation between the two would be wrong and offensive. His office claim he was misquoted and to me, his language was […]

    Read more →
  • News Whatever happened to the Angela Eagle leadership launch?

    Whatever happened to the Angela Eagle leadership launch?

    There is now unlikely to be a challenge to Jeremy Corbyn until next week, following the postponement of Angela Eagle’s leadership launch today. Eagle’s campaign was scheduled to kick off this afternoon, but was put on ice following a series of events this morning. Sources close to her campaign say that this is a delay rather than a cancellation, and that she still intends to go ahead with a challenge to Corbyn. They claim the delay is caused by several […]

    Read more →
  • Featured News Uncategorized Corbyn critics aim to recruit “army of moderates” to win new leadership contest

    Corbyn critics aim to recruit “army of moderates” to win new leadership contest

      Labour MPs opposed to Jeremy Corbyn hope to replicate the success of last summer’s left-wing recruitment drive and sign up thousands of new members who will back a centrist candidate in a fresh leadership election. A series of high-profile politicians and activists, ranging from Jamie Reed to ex-spin doctor Alastair Campbell and novelist Robert Harris, have indicated support for Saving Labour, an online initiative which says the party requires “new, strong leadership”. The project, whose origins are uncertain, appears designed […]

    Read more →
x

LabourList Daily Email

Everything Labour. Every weekday morning

Share with your friends










Submit