It’s not just the message, Gordon.


8:30 am - June 18th 2009

by Carl Packman    


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Michael Ellam, the current spokesman to Gordon Brown, declared the news on Tuesday that he is being replaced by Simon Lewis – the former spokesperson to the Queen. Good communications with the public is the sine qua non for an incumbent whose party’s latest ICM polls show that they are 15% behind the main opposition on the question of cleaning up the political system.

But communications is not the sum total of Brown’s problems.

On Sunday morning I thought everything would be OK. I had started to read the Observer and on the inlay page saw that Nobel Prize winner Paul Krugman had told Will Hutton in an interview that the UK economy was the best in Europe, and that not only are we seeing off the last dregs of the financial crisis, but Brown and Darling may well have beaten the city analysts predictions of long turmoil.

Well, I thought, aren’t we glad that the rebels bailed out last minute, that Blears apologised for leaving the way she did, that Miliband had a change of heart 9 days previous, and that despite all its talk, Compass effectively did nothing to start a ruckus with the right wing of the Labour Party.

For that moment I thought we on the left were wrong, and for that moment it was a good thing we accepted GB in our lives. That is until the next day began.

Aside from the private Iraq enquiry – which fell in the laps of Tory critics – the question of “in-fighting” is the most important problem that must be rectified.

John Prescott spoke out about it on his blog over the weekend. I interpreted his remarks as this; currently there exists childish banter between frontbenchers that is only earning them media coverage – say for example, Miliband’s pointless revelation on Sunday – and it is obfuscating any real discussion on party direction, something that all in the party can agree is creating a massive void for the Tories to fill, at a time when their in-fighting is just as striking as Labours.

No fewer than 72 hours after Prezza’s message was forgotten about completely, Alistair Darling, one half of the duo that quashed city analysts’ predictions on the longevity of financial recession, failed to back Ed Balls’ plans over spending in the health and education departments.

On CiF, and during an interview with Radio 4’s World at One, Balls spelt out his reasons for wanting to go ahead with spending, along with why fighting within the Labour ranks is hurting the party, and giving the Tories a free ticket to political high ground.

But Balls in the interview was clearly more cautious than some have now made out – like Liam Byrne, Chief Secretary to the Treasury, for example, who said

“We are going to decide how the growth in public spending is divided up much closer to the time. Looking into a crystal ball and understanding what the economy looks like in the year of the Olympics, I just don’t think is possible right now.”

Balls boldly stated that the moves on spending, to outdo Tory plans on 10% spending cuts

“will depend upon what happens to the economy and to unemployment and debt interest. But I think that with tough choices we can see real rises in the schools budget and the NHS budget in future years.”

These careful claims are justified, but why has Byrne not understood them? Has he let anything out the bag? And more importantly, why is the Chancellor’s department not backing the plans?

Does Darling not believe his own part in the claim – now with Paul Krugman agreeing that Labour are the right party to fix the economy, and Jose Manuel Barroso limiting his focus on America, which by his predictions has not seen the worst of the recession yet – that the UK has the best chance of a quick economic recovery in Europe?

Or is it something a little deeper; does it have anything to do with the fact that, as shadow schools secretary Michael Gove questioned, Balls is the man Gordon Brown wanted to make chancellor, [and] Alistair Darling [is] the man he was too weak to move?”

Certainly with TUC’s predictions recently that job losses will continue, now in the public sector – previously resisting the pressure by economic downturn – public spending should be bracketed as important as debt relief – since that debt has been largely due to public sector relief, its time to focus on how to avoid public sector collapse and more economic misery for working families.

Cuts in the public sector is where the Tories are at their most vulnerable; George Osborne and Kenneth Clarke have both said that cuts are inevitable, and Andrew Lansley, the shadow health secretary, has said that to commit to Balls’ needs would mean cutting other departments’ budgets by 10 per cent (earning him the pseudonym Mr. 10%, by Liam Byrne).

Labour must stay focused, cut out the deadweight and the weak, work out how to marry financial repair and public spending to curb job losses and economic misery for working families, and show the Tories that cuts will not cut it with the country’s economy.

Overall, the Labour Party with a bit more punch, a bit more direction, and a lot less media curtsying could prove a real challenge to a presently vulnerable Tory party. And it shouldn’t wait another second to attempt it.

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About the author
Carl is a regular contributor. He is a policy and research analyst and he blogs at Though Cowards Flinch.
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Reader comments


Earth to Carl Packman.

The UK may “recover” – ie stop shrinking – sooner than Europe, thanks to the fact (as Krugman pointed out) that the UK has full interest rate and exchange rate flexibility, but to stop unemployment rising demand must grow north of 2.5%, that is a different matter.

Cuts in the public sector is where the Tories are at their most vulnerable

No – it’s Labour’s lies about where spending is headed which are helping them.

*No-one* believes that public spending (ex interest and benefits) will do (can do) anything but fall. The only question is – where exactly?

Every economist, commentator and just about every voter understands that.

Brown’s and Balls’s lies are hurting not helping you.

Now you might just be able to make a case that Labour is the better party to manage that process.
But to pretend that Tories = cuts and Labour = growth will only hurt not help you.

Labour should not be attacking the Tories on cutting public spending per se. Rather, they should be going after the Tories for the timing of their proposed cuts and the fact that, at the same time, they want to cut inheritance tax for the very wealthy – including Messrs Cameron and Osborne. This massive tax cut for the well-off hardly inspires confidence that the Conservative party are doing as much as possible to minimise the public service cuts which inevitably have to come. Under the Tories, the wealthy will have their taxes cut while the rest of us will have our public services cut.

http://petespolitics.wordpress.com

Carl. Just read Cable’s article in yesterdays Ind -“” the structural budget ” deficit which will no correct itself as the economy recovers”. Labour has once again lost control of it’s tax and spend policy to the detriment of this country’s finances.

Meanwhile, in the real world:

The number of people in public sector employment was 6.02 million in March 2009, up 15,000 from December 2008. The number of people in private sector employment was 23.09 million, down 286,000 from December 2008 (ONS, Labour Market Statistics, first release June 2009).

In the three months to April average earnings, including bonuses grew by 0.3% in the private sector, compared to a rise of 3.6% in the public sector (ONS, Labour Market Statistics, first release June 2009).

And so the public sector pension timebomb grows even larger, never mind the structural deficit (@3) which everyone – except Brown and Balls of course – knows must be tackled.

Indeed Vince Cable points out in the Ind yesterday that “The public sector was allowed to expand on a revenue base … which was illusory.” How to correct this void, he asks, without collapsing confidence? “This requires a willingness to identify and cut substantial areas of long term government spending.”

And back we come to a cautious Ed Balls, who stated that Health and education spending “will depend upon what happens to the economy and to unemployment and debt interest. But I think that with tough choices we can see real rises in the schools budget and the NHS budget in future years.”

Those “tough choices”, what of they? Well I can think of two off the top of my head; Trident, ID cards. Lets say that we couldn’t afford those two things and the saving of jobs, it seems rather clear which option we should like to keep.

My main thesis in the article above is to ask whether Darling and Byrne are selling us the real ticket, and, further, why is Darling removed from Balls’ sentiments.

6. Matt Munro

A 1st year GCSE economics student could tell you that whoever is in power there will have to be cuts in public spending and probably tax rises too. You cannot bail out the financial system to the tune of £XXX billion and just carry on as normal (unless you want to bankrupt the country).

Whether or not cuts will affect “front line services” is a moot point, but it’s hard to see how sustained cuts of 10%+ can be implemented without affecting some services, although Iit might just trim some of the fat that nu labout have put on the public sector in the last 10 years.

Most quangos could be scrapped and no one would notice, the Government is currently the country’s biggest spender on advertising, the CSA costs £8 for every £1 it collects, the Tax credit system is woefully inefficinet. These are the places that the tories will hopefully start wielding the axe.

The problem nulabour have is that it simply isn’t in their DNA to reduce the size or scope of government. They have expanded the state to the point where it is central to practically all aspects of life in the UK, there is no problem which cannot be solved by legislation, regulation, targets, leaflets and all the apparatus of a stalinist bureacracy. This is why a change of govt is essential if the country is ever to recover a healthy economy.

You cannot bail out the financial system to the tune of £XXX billion and just carry on as normal (unless you want to bankrupt the country).

No, that’s the opposite of the situation.

The “asset-backed debt of state-owned banks” component of the national debt should be ignored when we’re looking at how much we’ll have to raise taxes in future, because it’ll come off the public balance sheet when the banks are privatised and lose their state guarantee. It’s relevant if you’re doing technical things with government bonds, but only then.

The actual problem is, state spending plans assumed 3% GDP growth forever, whereaas it actually fell below trend rates in 2008 and to strongly negative levels in 2009. Because slashing state spending in the heights of a depression would be a gibberingly insane thing to do, the government has stuck to those plans and indeed has brought some capital projects forward.

It’s *that* debt – state spending that was intended to be funded by taxes that were never actually incurred – which is driving the current deficit, and which we’ll have to pay down over the next 5-10 years. The financial crisis caused the recession in the first place of course, but it doesn’t have a significant impact on government debt.

“Because slashing state spending in the heights of a depression would be a gibberingly insane thing to do, the government has stuck to those plans and indeed has brought some capital projects forward.”

Well, at least we get to have that theory tested, I suppose, and we’ll find out which view of economic history was really correct: http://www.telegraph.co.uk/comment/personal-view/3623669/How-364-economists-got-it-totally-wrong.html

Ed Balls and the truth — its the best example of oxymoron which should be put in text books.

Have you read the redbook Carl — look at the treaury estimates please.

Also do you have any idea how much money we are borrowing every day?

What are you – Balls’s campaign manager?
Still – the higher profile he gets the better as far as I’m concerned!!!

So with “tough choices” elsewhere – ie cuts – we can protect health and education.

Hello?

Isn’t that what the Tories are saying – only they are saying it more honestly?

And on the growth forecasts – yes, the Treasury (it isn’t Darling’s or Brown’s personal forecast you know) has done a reasonable job on growth forecasting.
But they are not “in charge” of the economy.
They are in charge of the public finances – and they have consistently over-forecast tax receipts, which is the number that matters!

11. Matt Munro

“The “asset-backed debt of state-owned banks” component of the national debt should be ignored when we’re looking at how much we’ll have to raise taxes in future, because it’ll come off the public balance sheet when the banks are privatised and lose their state guarantee. It’s relevant if you’re doing technical things with government bonds, but only then.”

IF the banks are privatised and IF the assets that are backing them are actually worth anything – both of which are unknowns. Back on planet earth, whether it’s on the balance sheet is pretty much irrelevant, an accounting technicality (See PFI financing), the cash still has to flow to service that debt and has to come from somewhere.

12. Matt Munro

“Because slashing state spending in the heights of a depression would be a gibberingly insane thing to do, the government has stuck to those plans and indeed has brought some capital projects forward”

Thatcher did it and it seemed to work ?

All that’s happened now is the pain is spread out over a longer period. Rather than a deep, cleansing recession we’ve had a nu labout “recession lite” which will of course be followed by 2-3 decades of stagnation.

My examples were scraps, not cuts. My concern, cjcjc, is expenditure on services that serve the public, not outmoded excess. I found two examples of the latter in Trident and ID cards.

The Tories desire tax and spending cuts, so no I don’t think I am saying what they are. Not all in fact, since I share Balls’ direction – cautious conditions for avoiding 10% cuts. And I do believe he is being honest about it.

I have my own reservations about George Osbourne’s appeal to ‘truth’ about cuts. I rather think it is as basic as tax cuts for the rich.

So he will deliver 7% cuts (according to the Red Book / IFS) and is a long way from telling the truth.

Thing is – people know he’s lying

7% is the figure that the Tories will try to get Labour to admit to, but Cameron hasn’t thrown it out there yet. Why?

The Tories have all but set in stone their comitment to 10%, whereas Balls, I repeat, stated that the moves on spending, to outdo Tory plans on 10% spending cuts “will depend upon what happens to the economy and to unemployment and debt interest.”

Even Nigel Hawkes in The Times yesterday called it “a lie shouted loud enough will drown out the truth.” But there is nothing fictitous about what Balls is saying. In fact the “lie shouted loud” is the one that is saying Balls’ has not been cautious in his comitment to spending.

Try to get Lab to admit to?

It’s in the effing budget.

Anyway no-one believes a word Balls says – do they??

There is nothing fictitious about what Balls is saying, the likes of Nigel Hawkes are pretending not to hear the caution, vital to the understanding of what Balls has said. He is committed to “rises in the schools budget and the NHS budget in future years” as he has said. What’s not to believe?

“Well, at least we get to have that theory tested, I suppose, and we’ll find out which view of economic history was really correct: http://www.telegraph.co.uk/comment/personal-view/3623669/How-364-economists-got-it-totally-wrong.html

Certainly not that one. Anyone who believes that is economically iliterate.

Here’s a good place to start:

http://www.bankofengland.co.uk/publications/speeches/2006/speech269.pdf

Also, quoting the Telegraph article:

“The 364 were wrong because they believed the Keynesian consensus of the time. Indeed, they taught it to nearly every undergraduate in the country. The textbooks used by nearly all British undergraduates did not pay any attention whatsoever to alternatives. It was as if economic theory began and ended with the naïve Keynesianism of Keynes’s immediate followers.”

The same Keynesian consensus which exists to this day. Calling Keynesianism “naive” is like calling General Relativity “naive”. Criticizing undergraduate textbooks for not talking about alternatives would be like criticizing biology textbooks for not mentioning Genesis. Fuck “teach the controversy”. There is no controversy, except in the minds of conservative journalists and politicians.

“Thatcher did it and it seemed to work ?”

No it didn’t. Thatcher’s policies in the short term made things worst (as my last comment partly shows), and in the long term, the financial deregulation stuck around till the present day, contributing massively to the current crisis.

“All that’s happened now is the pain is spread out over a longer period. Rather than a deep, cleansing recession we’ve had a nu labout “recession lite” which will of course be followed by 2-3 decades of stagnation.”

This is patently absurd. Economic stagnation is actually what you get WITHOUT government intervention. In fact, since this was a massive failing in the financial sector along with the recession, a depression would’ve resulted, rather than the recession we see now. And government intervention is there to SHORTEN the recession, not “the pain is spread out over a longer period”.

He is committed to “rises in the schools budget and the NHS budget in future years” as he has said. What’s not to believe?

Well maybe he is.
But that will – according to the budget figures – lead to 10% cuts in the remaining areas.

Yet that is the “attack line” on the Tories, who are only guilty of using Darling’s own figures.
It’s pathetic – and so transparent it is hurting you.
Wake up!

The normally mild-mannered Evan Davis almost exploded at Jack Straw this morning (listen on the R4 website it’s around 7.50-8am).

He said something like
“This is an important debate yet we’re hearing figures read out – nominal figures which take no account of inflation or interest payments or benefits – while spending is in fact being cut”.
The proximate issue was the probation service but Davis and I suspect every journalist has seen through the lie and it is rebounding on you.


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  1. Liberal Conspiracy

    New post: It’s not just the message, Gordon. http://www.liberalconspiracy.org/2009/06/18/its-not-just-the-message-gordon/





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