Ken Clarke, Gordon Brown – and why Balls and Miliband are wrong to back Tory spending plans

June 26, 2013 7:10 am

Shortly after Labour’s landslide victory in 1997, for some perverse reason I invited Ken Clarke to attend one of our monthly Tribune dinners in the Gay Hussar restaurant, that old canteen of the Labour Left, in London’s Soho.

Clarke professed himself baffled by the assembled journos, cartoonists, MPs and trades unionists asking if we spent all of our time arguing with one another – or rather not listening to him. He then said something that did make us all prick up our ears and listen. He said of the new Chancellor Gordon Brown, “We all knew why he promised to stick to our spending limits to win the election, it’s just that we didn’t expect him to actually stick to them in power”.

I later related this tale to Gordon Brown, whose brow furrowed as he explained just how difficult it was to have to justify what he saw as necessary pain, in order for Labour to prove to the markets its fiscal responsibility. Labour’s first period in office was dominated by Gordon Brown’s decision to stick to his predecessors spending plans, and his decision to grant the Bank of England independence. I didn’t agree with the former and I could never get that excited about the latter. That said, Gordon did go on to develop his five tests for Britain joining the Single Currency – a shrewd move on his part because fortunately for us he knew damn well that Britain was unlikely ever to meet them.

The point about Gordon Brown’s controversial – and unpopular decision on the Left – to stick to Tory spending plans, is that the pledge was made at a time of relative economic growth. And Brown also had a plan for a range of labour market and positive benefit reforms, alongside the promise of the minimum wage, to sugar the pill.

Scroll forward to now, and Ed Balls has made a similar promise to keep to Tory spending plans by not reversing the cuts. He is doing so, like Brown, well in advance of the General Election. At the same time, both he and the Labour leader, Ed Miliband are calling for investment in major infrastructure projects, particularly in construction. The trouble is that Labour’s Shadow Chancellor had made his promises about sticking to Tory spending limits after six years and counting of deep austerity, falling standards of living and a quite brutal assault on the welfare state. The powerful Keynesian arguments and critique that Ed Balls advanced at the Bloomberg lecture could not be demolished, even by Britain’s notoriously parochial conservative media, but the prescription now on offer does not offer an alternative to austerity.

Austerity is slowly throttling Britain’s economy. Even the IMF says it is failing. If the Tories are re-elected the Institute of Fiscal Studies says that there will be further cuts of £23 billion for 2017-2018. Falling living standards, reduced services and even greater inequality is what is on offer to an increasingly jaded electorate nationally. The real risk is that very many voters will reach the conclusion that if continuing austerity is all that is on offer, and from Labour too, what will be the point in voting?

There is another deep concern also with George Osborne now promising to spend money saved from public services to invest in the infrastructure projects that the IMF told him there needed to be. So to the average voter who doesn’t follow the nuanced World of Westminster politics, both main parties appear committed to austerity, not borrowing and spending re-allocated money on infrastructure projects.

This may seem deeply unfair to Ed Balls, whose instincts are usually good, is at heart a Keynesian and who stands head and shoulders above George Osborne. Committed Labour supporters won’t be swayed by the argument that ‘they are all the same’, because we know that isn’t true.

But Labour does need to be offering real hope and putting some serious flesh on the arguments rehearsed by Ed Miliband at the weekend. By invoking Clement Atlee’s Labour Govenrnent, elected as it was in deeply austere times, the Labour leader needed to tell us how, if ‘socialism is the language of priorities’, he intends choosing his priorities and what they would be. In this he needs to shrug off the incessant carping of the Tory media, go over the head of the Tory and Blairite political establishment, and say for instance that renewing Trident is not a priority, but that it is a priority to increase direct taxation on the super rich. He could say that it is not a priority for British tax payers to continue to pay massive indirect subsidies to corporate giants who in turn then do not pay their taxes, but that it is a priority to restore the railways to public ownership with their profits being reinvested in our crumbling transport infrastructure.

Over the next two years we need Labour’s leadership to look and sound confident, and not be blown of course by the media. We need to hear them provide a stronger moral lead against the seeping corruption that has entered the police force and has elements of the security services now out of control. We have to hear them telling us how they intend to restore good, honest and accountable government, and how they intend to make Britain a more equal, tolerant society in which to live.

Clement Atlee’s Labour Government did indeed transform Britain for the better and from the ashes and ruins of the Second World War came the National Health Service and full employment. It did so at a time of austerity, and because it had a plan. This is what we need now.

And not forgetting, Labour needs to abolish the bedroom tax and the whole raft of Tory punishments, dressed up as ‘welfare reforms’ currently being meted out to the poor. This is surely priority number one.

  • JohnPReid

    I’m sure you say half this stuff for comedy affect, I know the tory press have a field day when they read it, but you can’t seriously mean this can you?

  • http://twitter.com/waterwards dave stone

    “very many voters will reach the conclusion that if continuing austerity is all that is on offer, and from Labour too, what will be the point in voting?”

    This is where I am, and I follow politics quite closely yet find it difficult to spot the difference between the main parties, and don’t trust them anyway.

    I’ll only be voting in 2015 if there’s a party that is presenting an alternative to the current ongoing disaster. Abstaining isn’t going to achieve much but at least it’ll feel better than giving my vote to a party that can’t be bothered to present an alternative.

  • Pingback: Ken Clarke, Gordon Brown – and why the Eds shouldn’t back Tory spending plans | Left Futures()

  • Robin Thorpe

    As I understand it Ed Balls has only promised to follow the spending plans for the first year. After that he has made no promise and would, I am sure, plan to re-evaluate spending priorities within that year. This is an entirely sensible attitude; it may not ally with the ideals of the Labour left but Ed is trying to be pragmatic and work within the constraints of real life.
    Businesses depend on forward planning to effectively budget; sharp changes in spending plans make life difficult for businesses to meet their budgets (remember approx 45% of economic activity in UK is by government). Like it or not most people in the UK are employed by businesses of varying sizes and depend on these businesses for their livelihood. Overnight changes like the changes in tariffs for solar energy and removing the National Curriculum caused havoc in the energy sector and schools respectively.

  • MrSauce

    There was a bubble based on unsustainable public and private debt, it burst, deal with it.

  • Pingback: Socialist Unity | Debate & analysis for activists & trade unionists()

Latest

  • Comment My bill to make work pay in Low Wage Britain

    My bill to make work pay in Low Wage Britain

    Today I will be speaking in Parliament on behalf of a woman called Catherine. She lives nearly 200 miles away, far from the Westminster bubble, and she doesn’t have time to take notice of polls or political pundits. But what happens in our politics and the type of government we choose in six months’ time will shape her life more than most. When my name was drawn out of a hat earlier this year, giving me the chance to introduce a […]

    Read more →
  • Featured Scotland Poor result in Rochester and Strood leaves LabourList readers unhappy

    Poor result in Rochester and Strood leaves LabourList readers unhappy

    Well over 1,000 LabourList readers voted in this week’s survey – but that doesn’t make the results any better for Labour. Despite the vast majority of readers correctly predicted a third-place finish in the Rochester and Strood by-election a fortnight ago, a similarly large proportion were disappointed with last week’s result. 52% of people felt that Labour’s performance in the by-election was quite bad, with a further 21% saying they felt it had gone very badly. 20% thought that we […]

    Read more →
  • Comment Labour should be proud of Tony Blair’s record in Africa – and we should say so

    Labour should be proud of Tony Blair’s record in Africa – and we should say so

    This weeks attacks on Tony Blair have been the most outrageous yet. Those who disagree with Mr Blair’s decision to go to war in 2003, now use every opportunity or headline to attack his foreign affairs record and discredit his Government. But on this, they’re wrong – and we should say so. Those who have signed the petition against Blair’s acceptance of the Save the Children award simply cannot do so based on his record for international development, which the […]

    Read more →
  • Comment Will Lib Dem MPs vote for a policy that will help to close the gender pay gap?

    Will Lib Dem MPs vote for a policy that will help to close the gender pay gap?

    Today I asked Equalities Minister Jo Swinson in House of Commons whether she would vote with Labour on the 16th December on our proposal to require big companies to publish their gender pay gap. She refused to do so. Given that one of the first things the Lib Dems and Tories did after 2010 was ditch Section 78 of Labour’s Equality Act, which provided the power to require big companies to do this, this may not surprise you. But the […]

    Read more →
  • Comment East Coast – a case of too much ideology, not enough evidence from both government and unions

    East Coast – a case of too much ideology, not enough evidence from both government and unions

    So, with some surprise, the East Coast franchise has not been won by a foreign public sector operator but by a private sector operator: a Virgin/Stagecoach joint venture. Mick Cash of the RMT has called it “an act of utter betrayal”. It’s certainly true that the government wants this franchise bid done and dusted before the general election and that the Tories have an ideological commitment to private sector operation. However, that commitment is identical to the ideological dogma coming […]

    Read more →