…nor can you face in both directions in your own party, when it has been saturised by market complacency – this is encouraging, AGAIN, from Balls.

I wish he’d said this whilst in government

Some comments on this, since it comes up on LC repeatedly:

1) Prior to the last election, Lab said it would halve the deficit within one parliament, subject to conditions. The Tories then said no, let’s go faster, saying they’d eliminate the deficit entirely in one parliament, come hell or high water. Labour rejected that, and D Miliband’s position is now to continue with the original Labour plan. Quite how this involves adopting Tory policy I do not see. It is no wonder Labour lose big if Labour supporters are inclined to attribute established Labour policies to the Tories.

2) Sunny often claims that the problem with the Darling plan is that it will be indistinguishable to voters from the Tory plan, and involves conceding that they have got it mostly right. But I think voters can apprehend the difference between Tory policy and a policy of cutting the deficit at half the speed, with the option to stop or slow down if need be.

3) Current indications are that the public (a) believes that there is a real need to reduce the deficit, and (b) believes that the coalition’s plans for this are too quick and too unfair. This indicates that they are/would be more sympathetic to the DM plan.

4) Meanwhile, I strongly suspect that the time to advocate the Balls plan was prior to the election, and that its ship has now sailed. I doubt that Labour can credibly change it’s position on the deficit so radically as you and Balls recommend so soon after May. The party’s stock is currently low, and trust needs to be re-established. Whoever is leader, they would be asked, if they followed the Balls proposal, why they recommended one thing before the election, and another very different thing after it. They will be asked why they should be believed at all on economic affairs when they are so prone to such radical changes of heart. And it won’t be a good enough answer on the Today Programme to say, ‘Ah, well at the time I was following orders, but now I’m giving them.’

what is the consensus that we’re not to buy into, and what policy does not buying into it entail?

are you endorsing the claim that there’s no need to try and close the deficit quite so quickly (a difference of degree from Darling/Milliband), or the claim that spending should rise in an attempt to generate growth?

@3 Spot on. I don’t see Balls having any economic credibility with anyone outside of a few Labour supporters and Labour-sympathetic commentators.

Glad to see some one making this case so strongly. As discussed elsewhere on LC, the balances to be struck include that slower defecit reduction plans allow for growth to pay down more of the deficit, thus reducing the need for cuts.

Labour have to have some plan to cut the deficit – and the flexible plan to halve it over a parliament was reasonable – Especially as strong growth figures this year have already reduced the magnitude of achieving that.

The key argument that needs to be made though is simply that cutting spending is not the only option – and that raising taxes is a reasonable option too, given the devestating consequences for long term growth of cutting capital works and education budgets.

blanco
to be fair he’s only really talking to labour audiences at the moment as he’s engaged in a debate about the future of the labour party.

in truth no candidate will be elected and say “right, here’s what I wanted so that’s what I’ll do”

The various candidates will take up positions within a shadow cabinet and will find concensus on the right balance to take on things like public finances.

@5 “I don’t see Balls having any economic credibility with anyone outside of a few Labour supporters and Labour-sympathetic commentators.”

Try Sir Alan Budd, as reported in Mail as recently as 16 August:

“The Treasury watchdog has warned that he is ‘not confident’ that the country can avoid a double-dip recession. Sir Alan Budd, who is standing down as boss of the new Office of Budget Responsibility, stoked new fears about the fragility of the economic recovery, admitting that growth could dry up.

“His sobering assessment of the state of the economy overshadowed a much more upbeat outlook outlined today by Deputy Prime Minister Nick Clegg.”
http://www.dailymail.co.uk/news/article-1303473/Alan-Budd-Im-confident-wont-double-dip-recession.html#ixzz0yl5KDNRN

Of course, Ed Balls is also absolutely correct over the flawed consensus about John Major, as Chancellor, taking Britain into the European Echange Rate Mechanism (ERM) in October 1990.

Mrs Thatcher as PM, on the advice of her personal economic adviser, Sir Alan Walters, was uneasy about that decision but Nigel Lawson, who had been John Major’s predecessor as Chancellor, had been moving policy in the direction of joining up for years and the Cabinet had gone along with that.

See the video clip here of an interview with Alan Walters and more detail on why he regarded joining the ERM as a thoroughly bad idea:
http://www.telegraph.co.uk/news/obituaries/4126227/Sir-Alan-Walters.html

SohoPolitico:

Quite how this involves adopting Tory policy I do not see. It is no wonder Labour lose big if Labour supporters are inclined to attribute established Labour policies to the Tories.

Let’s say you tell ten schools in your area that 7 have to close if the Tories get in, and 5 if Labour get in. To those people who don’t want schools to close and think the focus should be on keeping schools open until we’re out of recession – this isn’t that much of a choice.

And please don’t blame the left for Labour’s defeat – it’s rather sad that you’re buying into this right-wing talking point. Darling’s plan buys into the Tory view that the bond markets are supreme and that unless drastic action is taken now the economy will collapse. We’ve shown repeatedly on here why this is crap.

But I think voters can apprehend the difference between Tory policy and a policy of cutting the deficit at half the speed, with the option to stop or slow down if need be.

Really? Well – the last election result should tell you exactly how much they were able to tell the difference.

Sunny

I’m not sure the maths works in terms of shutting seven or five or ten schools.

The article on LC and subsequent discussions about how the labour and coalition plans add up sheds some light on why.

Sunny,

Let’s say you tell ten schools in your area that 7 have to close if the Tories get in, and 5 if Labour get in. To those people who don’t want schools to close and think the focus should be on keeping schools open until we’re out of recession – this isn’t that much of a choice.

Since schools are dependent on number of children, not straight finances (unless you think both parties were planning major cuts in the amount of money per child, which neither have suggested), I think your example needs a bit of work. Especially since the Conservatives are actually encouraging new schools to open…

And yes, I know that was a simplified example, but my reading is you need to be thinking at that level to take Mr Ball seriously. He is now quoting Keynes about changing his mind when circumstances change: perhaps he should explain what has changed to change his mind, because I haven’t seen anything yet. This looks more like opportunism and creating a clear difference rather than thought-out economic policy from Mr Brown’s former number two at the treasury.

Let’s say you tell ten schools in your area that 7 have to close if the Tories get in, and 5 if Labour get in.

You’ve used this example before. But the number is plucked out of thin air, and almost certainly deliberately exaggerates the closeness between DM’s proposal and government policy. The fact is that DM’s plan involves: cutting the deficit at half the pace of the government (cutting it in half as opposed to eliminating it this parliament); via a 2:1 mix of cuts to tax increases, as opposed to Osborne’s 4:1; whilst promising to halve unemployment.

And please don’t blame the left for Labour’s defeat – it’s rather sad that you’re buying into this right-wing talking point. Darling’s plan buys into the Tory view that the bond markets are supreme and that unless drastic action is taken now the economy will collapse. We’ve shown repeatedly on here why this is crap.

I’m not buying into any rightwing talking points. The point is that it doesn’t do Labour much of a service when, in spite of the obvious differences, you say ‘Well, this is indistinguishable from the Tory plan!’

And the other point is that, again, Labour, whether led by EB, EM, or whoever, are arguably not in a position to perform a u-turn on the pre-election plan now. The public believes in the need to tackle the deficit. And the press will crucify any Labour leader who says just ignore it, or wait to grow out of it, given what they said before.

Really? Well – the last election result should tell you exactly how much they were able to tell the difference.

Prior to the election, polling suggested the public were sympathetic to the Labour government’s approach to the deficit (cut it, but go slow, don’t endanger recovery, protect services, etc.). They were hostile to the Tory plan. They still voted Tory, however. I take away from this that the country couldn’t have stomached five more years of Gordon if he’d promised them the moon on a stick. It wasn’t on the deficit that the election was lost or won.

“Let’s say you tell ten schools in your area that 7 have to close if the Tories get in, and 5 if Labour get in. To those people who don’t want schools to close and think the focus should be on keeping schools open until we’re out of recession – this isn’t that much of a choice.”

Obviously if you make incredibly bad arguments then people won’t support them. It is not like it is difficult to sell the Darling/D-Miliband proposals in terms of how they would have involved fewer cuts.

Sticking to the Darling plan means that Labour can say by the time of the next election that they oppose £31 billion of cuts (plus whatever the consequences of economic growth being reduced by the coalition’s policies). That’s more than enough for a PPC in Anytown to be able to explain to voters that Labour wouldn’t have shut their schools.

I think at some point Labour is going to stop saying what they would have done and start saying what they will do, post-2015.

I think at some point Labour is going to stop saying what they would have done and start saying what they will do, post-2015.

You’d hope so, but I think you may have to wait till 2016 for this to happen…

@15 The leadership candidates are outlining what they would be doing now but if you would prefer they talk nonsense about a future they can’t forsee than you go with that.

Sticking to the Darling plan means that Labour can say by the time of the next election that they oppose £31 billion of cuts (plus whatever the consequences of economic growth being reduced by the coalition’s policies).

Again – I keep pointing out that this argument didn’t actually wash with anyone during the election – hence the crap result.

People want alternatives, not just slightly less pain. That 31bn spread over the entire country doesn’t amount to that much does it?

On the other hand – I’d like to see the rationale for cutting as harshly and deeply as even Darling wants. Anyone?

They were hostile to the Tory plan. They still voted Tory, however.

No this isn’t what happened.

As I’ve pointed out here, Labour lost the economic argument once they bought into Tory scare-mongering

http://www.labourlist.org/sunny-hundal-how-labour-lost-the-debate-over-the-economy

FWIW my impression from speaking with folk who have little to no regard for the Conservatives and their values nevertheless understand that this – or any other government – cannot continue borrowing indefinitely to support a budget deficit amounting to 11% of GDP.

Some cuts in public spending are seen as inevitable. The essential point to make is that if the spending cuts are made too steeply and too soon, the economy will tank. One of the fundamental issues is how soon will increases in net exports, business investment and consumer spending make up for the cuts in public spending. Another issue is about who will bear the incidence of the cuts in public spending and the increases in taxes.

Any comments about this attempt on the BBC website to assess which areas are like to prove the least resilient to the spending cuts?

Spending cuts ‘to hit north harder’
http://www.bbc.co.uk/news/business-11233799

Personally, I wanted to know a great deal more about the selection and weighting of indicators used in the construction of the resilience index. For the district where I live, the formation of news businesses was taken as an encouraging sign of its resilience. I can understand why that was picked out but the fact is that most new small businesses have a short life span. Perhaps a more telling indicator in the news is the different vacancy rates of shops in local shopping centres and high streets. It was claimed that vacancy rates tended to be lower in London and the South East region than in parts of the midlands or in northern regions.

“Again – I keep pointing out that this argument didn’t actually wash with anyone during the election – hence the crap result.

People want alternatives, not just slightly less pain. That 31bn spread over the entire country doesn’t amount to that much does it?”

I would be surprised if many people took the view that £31 billion wasn’t that much, if anything it sounds more like an improbably huge amount of money.

As for the “crap result”, 53% of people voted for “delay the cuts to 2011, then cut to halve the deficit”, whereas 37% of people voted for “start cutting now”. Where is your evidence that Labour would have got more votes if they had adopted the Ed Balls economic plan?