Yesterday the Tories trotted out the same message: Labour can’t be trusted with the economy. In response, Labour outlined the savings they would make and Miliband reiterated that none of Labour’s proposals are funded by additional borrowing in his speech yesterday.
However, Peter Hain, former minister, has criticised these moves. He has written an article in the Guardian condemning the economic argument that dominates mainstream politics and sees everything “sacrificed before the deficit altar.”
Instead of embarking on savage cuts, Hain is urging the Labour Party to adopt a different approach to stimulate the economy. He argued:
“We urgently need (as some economists argue) £30bn a year for two years of extra capital investment in infrastructure, housebuilding, education, skills and low-carbon industries. This would rapidly expand the economy and cut the budget deficit by boosting tax revenues as people earn and spend more, working hours rise, and fewer families need to look to the state for support.”
“it’s the only way to begin creating a fairer, more sustainable economy – and thereby sensibly rebalancing the public finances.”
Hain lays out an argument for extra borrowing, by outlining how “Higher public spending and borrowing on capital investment today means lower borrowing tomorrow with the economy growing and tax revenues rising.”
Lambasting the current political terrain, he ends his piece with a clear message: “Democratic socialism, not neoliberalism, should remain the calling for our age. But amid the soundbites and media spin, is anybody listening?”