“Of course Labour is not opposed to all cuts. But there’s a difference in size (of £40bn) and composition of those cuts.”

Yes, there is indeed a gap. There is a gap of about £11bn between the coalition’s spending plans and Labour’s spending plans. This is in a budget of £140bn.

Public spending cuts may have only recently begun but they have noticed oop north:
http://www.thenorthernecho.co.uk/news/9032392.Anger_after_care_minister_denies_shortfall_in_funding/

We don’t want finance to ‘fuel’ growth because it isn’t a part of the real economy. They create wealth for themselves and then extend it as credit. They extract money rather than produce it, but the GDP figures give the illusion that they are ‘growing’ the economy.

“The Democrats are focusing on Republicans plans to cut Medicare. That, more than anything, is scaring the hell out of Republican candidates. The same will apply here once the cuts start to bite.”

For many of us, the use of the future tense in that last sentence is a tad facile. Sorry, Sunny, it just is – the most vulnerable people – the chronically sick and disabled – are scared shitless already.

Yes, there is indeed a gap. There is a gap of about £11bn between the coalition’s spending plans and Labour’s spending plans. This is in a budget of £140bn.

That’s actually a budget of £681bn. Darling proposed spending cuts of £60bn, the Govt is planning spending cuts of £80bn. As a proportion of total spending, the difference in these positions is less than 3%.

@3: “They extract money rather than produce it, but the GDP figures give the illusion that they are ‘growing’ the economy.”

We are looking to consumers and businesses to spend more to make up for the cuts in public spending and increased bank lending is a crucial part of that equation:

David Cameron threatens banks over ‘disappointing’ lending

David Cameron outlines the measures the Government can take against the banking sector if they do not fulfill their part of the Project Merlin deal.
http://www.telegraph.co.uk/finance/8519436/David-Cameron-threatens-banks-over-disappointing-lending.html

In Friday’s FT the banks are saying that the disappointing lending figures are due to the lack of demand from SMEs for bank loans. That could well be true if SMEs lack the confidence to borrow until they can assess the effects of Osborne’s public spending cuts which have barely started.

Treasury provokes banks over loans
http://www.ft.com/cms/s/0/e710d5fc-824e-11e0-961e-00144feabdc0.html#axzz1MtEsBhIc

“We’re not South Korea or China”

Well spotted, Sunny. I’d love it if you teased out what the differences actually are.

A higher average IQ would I guess be one, as would a shortage in China of inconvenient things like health and safety, diversity targets or environmental controls, minimum wage, compulsory insurance etc etc

But I’d guess that the absence of a huge underclass welfare bill might be a factor, too. Remember all the fuss about child poverty, “the poorest and most vulnerable” etc etc – the majority of which is associated with single parenthood ?

Not so in China :

“it is illegal in almost every province for single women to have a child and that people who have children out of wedlock must pay “social compensation fees” (29 Feb. 2009, Sec.1.f). The US Congressional-Executive Commission on China (CECC) reports that those who give birth to a child outside of marriage can face fines six to eight times the amount of their income from the previous year (US 31 Oct. 2008, 97). According to a 2005 article in Reproductive Health, very few children are born out of wedlock in China (11 Aug. 2005, 3).”

As a commenter said on my blog : “What, you mean they don’t just give them a free flat and loads of money? Extraordinary.”

To almost no surprise, the world’s third-largest economy: Japan, has fallen off a cliff (-5.2% slump) and now in a “severe” recession. Meanwhile, there are growing protests in Spain over high unemployment and austerity measures, with more to come this weekend.

You do realise that the fact the majority of growth forecasts have global growth (and growth in the UK, Germany, France etc) allows for the Japanese economic collapse and the failure of the southern European economies. This may shock you, but there can be global economic growth whilst some bits of the globe do not experience it, and the problems of Japan (both structural and more recent) and especially Spain etc do not apply so strongly to the UK.

Osborne has two hopes: a consumer spending surge that lifts the economy. But given real incomes are going to be stagnating for a while, in the UK and elsewhere, the likelihood is low. Second, the finance industry returns back to ‘business as usual’ and powers the economy. Who’s going to bet on that?

My point is simply this. We’re in a deep hole, and we’re staying here for a while yet because the Conservatives are depressing the economy rather than boosting it.

Bang on the money.

Perhaps Osborne may get lucky. Someone somewhere might invent a thing which everyone wants and which sparks a technological revolution which makes markets – like PCs and mobiles did in the 80s and 90s.

But I can’t see it. People have got enough “stuff”. They have real time communications and instant information to go alongside fashions and other wants. Who really needs more tat?

So what’s left? Services, that’s what. First class services which only the State can provide, like schools and hospitals and police and all the rest. Only by underpinning people’s lives in this way can we ensure that those currently excluded from hoarding things can take part too.

So Labour needs to make this case so they can rebuild these essential services after the Tories are booted from office.

Labour have to prepare for an econimic upswing in 2015 because (a) if there IS a recovery they can’t go into the election claiming it never happened, and (b) if there is NO recovery they really don’t have to do anything much because they’ll get elected anyway.

Laban

As a commenter said on my blog : “What, you mean they don’t just give them a free flat and loads of money? Extraordinary.”

And you probably thought this was a sharp observation.

Which says more about you than the matter at hand.

There is a gap of about £11bn between the coalition’s spending plans and Labour’s spending plans.

Nope, as I said – its 40bn
http://liberalconspiracy.org/2010/09/08/how-labour-and-coalition-deficit-reduction-plans-match-up/

And that was when comparing Osborne with Darling – EdM’s lot want to do it even slower.

As a proportion of total spending, the difference in these positions is less than 3%.

If the actual numbers are that low, how can you credibly claim that the Coalition ‘saved the economy’?

you might be right about the UK facing tough times – I’m not sure you’re right about the global recovery. Did you check some global economic forecasts? Africa, BRICS, all motoring, USA doing OK, Germany, France doing OK. Japan will cover, it has been hit by a shock, not some structural problem.

I also think you understimate the prospects of things looking better in the UK by 2015. I’m not sure that trying to intuit “where growth is going to come from” is a terribly reliable procedure, although I agree it’s hard to “see” where growth is going to come from, that may be becasue none of us can “see” the economy very well. This sentence: “consumer spending surge that lifts the economy. But given real incomes are going to be stagnating for a while …” is close to cicular – “real incomes” are “the economy”, so this is close to saying that the economy won’t grow because the economy won’t grow.

But I’m sure you are quite right that Labour ought be able to get lots of mileage out of bashing the Conservatives about the state of the economy – high unemployment and a wage squeeze and unpopular cuts look like easy targets to me. Whether or not a Labour government would actually be capable of engineering growth through clever spending, that shouldn’t stop them being able bash the government for failing to do so (infrastrucutre spending and other forms of investment are popular ideas) and of course for the cuts, the cuts.

Luis,

But I’m sure you are quite right that Labour ought be able to get lots of mileage out of bashing the Conservatives about the state of the economy

Apart from the minor point that the Conservatives can still happily portray themselves as painted into a corner by a Labour government, two of whose economic advisors are now leader of the Labour party and its financial spokesman. The economic problems are in the wider imagination the fault of bankers and Labour, and the Conservatives are playing this cleverly by not cosying up to one (or indeed the other) and leaving Labour room to set out policies that the Conservatives know Labour do not have (not cutting so much is not really a policy, especially as Labour have not supported any cut that I’ve seen, so they hardly look serious).

Watchman,

pah! logic. When the economy is doing well the incumbent benefits, when its doing badly the incumbent is blamed. Look at Obama getting it in the neck for what the previous administration sowed.

here’s a pdf. about it

http://www.efm.bris.ac.uk/ecacp/luck&comp.pdf

it says you get especially hammered if your economy is doing badly and the rest of the world is doing OK.

mind you, all such empirical results are “on average” and maybe the British electorate got so sick of Labour, the Cons have a free pass.

(not cosying up to bankers? are you sure?)

@15 Very true, I recall the very first Tea Party marches, complaining that Obama was taxing them too much, occurred before he’d even set out his first budget. They were in essence bitching about Bush’s budget and blaming Obama for it.

Osborne’s gamble is that purely that of aligning the economic and political cycles. That no matter how badly the economy tanks for 2-3 years, there can be enough of a bounce just prior to the next election – and even tanking economies bounce occasionally and eventually. Then he’ll be able to sell this to his natural constituency with tax cuts. He won’t care about the fact that the economy may be 10% below where it might have been, the “numbers” will be spun to show “success”.

Labour’s challenge is to expose this.

@ 14 Watchman

I’m inclined to agree with Luis here: blaming the past administration, however fairly, tends in my experience to have a pretty short shelf-life as a viable tactic. Actually, any justification will start to be rejected if you repeat it enough. People will start treating it as an excuse. They’ll say “I’m sick of the government trying to explain X by going on about Y”, even if Y is a totally justified reason for X.

This looks like a bad thing on the face of it, but if the population were more charitable towards the government in this regard, the government really could get away with blue murder.

Japan will cover, it has been hit by a shock, not some structural problem.

Japan has been stagnating for nearly 2 decades!

so this is close to saying that the economy won’t grow because the economy won’t grow.

fair enough, but we do have structural problems, as Marginal Revolution points out. Most of our growth came from an outsized financial sector

We can either go back to that again, or think seriously about growing other parts of the economy. That requires the kind of thinking tories are not willing to do.

@18: “I’m inclined to agree with Luis here: blaming the past administration, however fairly, tends in my experience to have a pretty short shelf-life as a viable tactic.”

I agree. Repeatedly blaming the previous government for the legacy mess conveniently diverts public attention from the substantial contribution of the banks to the creation of the mess. As for the massive debt overhang try this illuminating brief on Britain’s national debt – dated: 26 March 2011
http://www.economicshelp.org/blog/uk-economy/uk-national-debt/

“UK public sector net debt was £875.8 billion or 58% of National GDP – (note this excludes financial sector intervention.)
Source: Office National Statistics

“If all financial sector intervention is included (e.g. Royal Bank of Scotland, Lloyds) , the Net debt was £2,252.1 billion or 149.1 per cent. This is known as the unadjusted measure of public sector net debt.

“The PBR (annual government borrowing) forecast for 2010/11 is for net borrowing of £149 billion or 12.6% of GDP.”

National debt incurred by the financial sector intervention can be paid down as when government held shares in Northern Rock, RBS, Lloyds etc are sold back to the private sector.

One substantial cause of the current budget deficit is the shrinking of tax revenues as the result of the recession.

Martin Wolf in the FT: “Can we not at least blame Mr Brown for the bloated public spending and grotesque fiscal deficits? Yes, but also only up to a point. Between 1999-2000 and 2007-08, the ratio of total managed spending to GDP did rise from 36.3 per cent to 41.1 per cent. But the latter was still modest, by the standards of the previous four decades. The jump to a ratio of 48.1 per cent, forecast for this year in the 2010 Budget, is due to the recession. Nominal spending is currently forecast at 3.5 per cent higher in 2010-11 than forecast in the 2008 Budget. But nominal GDP will be 10.3 per cent lower and tax revenues 16.4 per cent lower.”
http://www.ft.com/cms/s/0/3074d7ba-5ec0-11df-af86-00144feab49a.html#axzz1MtiLx2Og

Chaise/Luis,

One of those recurrent themes in British politics is that Labour ruin the economy and the Conseratives save it (OK – that’s the Conservative story…).

Although that may not be true (1991 anybody?) the Conservatives generally seem to be allowed to get away with recessions and the like, whereas Labour are punished for them – not sure why, but if you compare 1979-1997 and 1997-2010, there is a marked difference in reaction in elections after recessions.

Basically, Labour seem to do better when the economy is doing well (no idea if 1974 bucks that trend or not) and the Conservatives benefit from a weak economy even if it is of their own doing. So Labour basing their strategy on a worsening economy, especially when it is not that long ago that they brought about the recession (again, that’s a simplification), is not looking likely to work for them.

@ 21 Watchman

If true, that seems easy enough to explain. Labour tend to increase redistribution. As a taxpayer, you’re more likely to feel good about supporting other people with your cash when the going is good, and resent it when times are tight. Also, a bad economy is a frightening thing, and the Tories seem to benefit most out of the politics of fear. Which isn’t to say Labour doesn’t use fear tactics, the Tories just seem to do better out of them (maybe because they’re better at it or maybe because people see them as the party that can do nasty but necessary things, or more likely both).

@ Watchman

Actually, I reckon the idea that Labour represents (arguably foolish) generosity and the Tories represent (arguably cruel) self-protection explains a lot of statistical blips. It could be one of the reasons the Tories tend to benefit from bad weather on election day.

Chaise,

From local election observation (not mine particularly, but passed on to me), bad weather on poll day breaks up the Labour block vote, but the Conservative die hards still come out through any weather…

I’ve never been able to rationalise the apparent preference for the Conservatives in economic bad times, in that if your theory is correct then the country is probably naturally both conservative and Conservative, and I’d prefer neither of those to be particuarly the case.

It’s so funny the way you lot seem to not want things to pick up, but you only need to look across to America & remember that we are always abit behind them with the economy & guess what, things are just starting to pick up over there & that makes many in the know who say things will start to get better by next summer correct.

Labour can scream like a girl because they think it’s wrong for people not to be able to claim, claim & claim some more but it really is time to throw the welfare dummy away & learn to look after yourself, the state you lot love so much is NEVER going to be the same again & neither are the people who have to finance it.
You know that’s right!
I repeat, The STATE WILL NEVER BE THE SAME AGAIN, tax payers have been hurt by Labour for the last time, never again.

Have a nice weekend ;O)

@ 24 Watchman

“From local election observation (not mine particularly, but passed on to me), bad weather on poll day breaks up the Labour block vote, but the Conservative die hards still come out through any weather…”

That’s another of the reasons. Tories would claim Labour voters are less likely to be dedicated, Labour would claim Tories are more likely to have cars that they can use to get to the polling station in the rain. I reckon both might be true.

“I’ve never been able to rationalise the apparent preference for the Conservatives in economic bad times, in that if your theory is correct then the country is probably naturally both conservative and Conservative, and I’d prefer neither of those to be particuarly the case.”

“Rationalise” being very much the right word there, then! I’m not sure I follow your logic in any case: why do we have to use a poor economic outlook in determining people’s “natural” attitudes? Perhaps more importantly, what, precisely, does “natural” mean in this context?

Watchman,

you are right – I suppose plenty of voters do see the Conservatives as “fixing” the economic mess. On that basis, Sunny’s idea that Labour need to keep hammering away at the (reasonable) idea that far from fixing it they are needlessly extending the slump, is probably the key battle. But really, Lord knows what everybody is going to be thinking come 2015.

Sunny,

fair point; I should have written Japan will recover … back to its previous moribund state, at least.

@21

One of those recurrent themes in British politics is that Labour ruin the economy and the Conseratives save it (OK – that’s the Conservative story…).

Labour governments seem to often be extremenly unlucky where the economy is concerned. They (with the exeption of 1997) alway seem to get into office at a time when the economy is in big trouble or just before some international financial crisis. Which they then get the blame for. This was true big time in 1929, when they came into office just months before the Wall Street Crash. 1945, when the economy was almost bankrupt due to WW2. 1964, when the tories had left them a huge balance of payments deficit. 1974, when the world was suffering the aftermath of the OPEC oil crisis.

Conversely the Tories have generally come to power at a time when the economy is already improving. Allowing them to enjoy extended periods in office. In 1951 when postwar world economic recovery was gaining pace, allowed them to stay in office for 13 years. Margaret Thatcher had extremely lucky timing coming to power in 1979 just as the North Sea oil boom was beginning, the revenues from which helped paper over her disastrous monetarist policies in the 80s.

The one exception was Edward Heath in 1970, who came to power just before the OPEC oil crisis of the early 70s hit. And he was out of power within four years.

This time however the Tories seem to have inherited the s**tstorm. Maybe 1970 is a better paralel to what will happen this time rather than 1979?

@ 25 workman Fred

“Labour can scream like a girl because they think it’s wrong for people not to be able to claim, claim & claim some more but it really is time to throw the welfare dummy away & learn to look after yourself, the state you lot love so much is NEVER going to be the same again & neither are the people who have to finance it.”

Yeah. The thing is, I tried to talk to you sensibly about the pros and cons of welfare recently, and all I got in return was a pile of weird ad hominems. So I hope you won’t be offended if I tell you to bugger off and stop bothering the grown-ups.

(And yes, we know the comeback where you say that we must be scared of hearing your opinion. In fact, you’re a troll, and trolls are boring.)

@13. Luis Enrique,

Well said.

Not sure I agree that Japan was doing so terribly before the earthquake though. E.g. see the data in this post: http://noahpinionblog.blogspot.com/2010/10/dont-count-japan-out-yet.html

To pull some stats out,

Annual PC-GDP growth in the ’90s: 1.5% (US comparison: 2.0%)
Annual productivity growth in the ’90s: 2.5% (US comparison: 1.4%)

And that was during “the lost decade”. Post ’90s figures are even better.

If the actual numbers are that low, how can you credibly claim that the Coalition ‘saved the economy’?

That’s an easy one. The Government has implemented a spending review and shown precisely how this spending will be cut. Labour provided a headline figure of what cuts would be, but no detail of how it would be implemented. The King Lear approach to fiscal policy.

I will make such cuts,–
What they are, yet I know not: but they shall be
The terrors of the earth

And I told you
“You’re a busy person if your the same Chaise Guevara I found interesting search results for, made some interesting posts on the daily mail!
Anywho, I will talk to you even though I believe you are one of those in your face lefties you see on the high street shouting their view at you!

I don’t think you’re scared of hearing what I say, it’s just you don’t like hearing it, & as for growing up, it’s about time the left did & like I say, threw the dummy away & learnt to look after themselves with thieir own money, when this happens I’ll call the left grown up.

@ Workman Fred

“And I told you
“You’re a busy person if your the same Chaise Guevara I found interesting search results for, made some interesting posts on the daily mail!
Anywho, I will talk to you even though I believe you are one of those in your face lefties you see on the high street shouting their view at you!”

Um, yes. Like I said, a bunch of weird ad hominems. Thanks for proving my point, troll!

As for this:

“I don’t think you’re scared of hearing what I say, it’s just you don’t like hearing it, & as for growing up, it’s about time the left did & like I say, threw the dummy away & learnt to look after themselves with thieir own money, when this happens I’ll call the left grown up.”

It’s a bunch of childish ranting. You’re capable of stating your opinion but apparently incapable of actually backing it up. So instead you settle for silly, patronising insults and content-free ad homs. And now I’ve wasted more than enough time on you.

Oh please lets not waste another thread on a troll.

The left lost its way when it succumbed to the neoliberal myth-making about the essential iniquities of the state. In agreeing that ‘the state’ had failed, it had nowhere to go – because without the state, despite all the blue-labour/red-tory misty-eyed rhetoric, there is nowhere else to go.

The idea that the state encroached on the market, rather than being drawn kicking and screaming into the vacuum the laissez-faire market would not and could never serve (universal education/healthcare/pensions/social security) was always a fantasy – and we’re about to see what chaos ensues when the state is withdrawn from these areas.

Until the left regains the confidence to stand up for the tremendous successes of post-war social democracy, the creation of the NHS (which has benefited not just those needing treatment, but those who hardly call upon it simply by removing the constant fear of exhorbitant medical expenses), the expansion of state education and the concomitant rise in social mobility (in the process of being reversed through the introduction of tuition fees and expansion of ‘free’ schools), the huge improvements in the quality of life of the elderly, etc., etc., it has nothing to combat the shallow certainties and the twisted doctrine of unenlightened self-interest underpinning the ideology of the ‘New Right’.

This book – http://goo.gl/6g5fD – offers a timely reminder of the necessary role of the state from a right of centre perspective – it’s time the left recovered its confidence in the power of the state as a democratic safeguard against the polarization of wealth and power that ultimately undermines any society.

If Osborne were to sell off the assets it holds then there will be over £100bn of cash. Osborne may well decide to sell these assets as a loss (remember, they’re only banking shares, they’re not gold, so it doesn’t count). If he were to do this, say, a year before the election and then pump this into the economy as tax cuts, new funding for the NHS, or simply by driving along the streets of Britain in his open top Bentley throwing money at everyone, the Tories would be assured of a majority in 2015. (Ignore for now that the assets should be used to reduce the national debt, Osborne certainly will.)

Meanwhile, the poor and vulnerable will not vote because there is no one that represents them.

Or look at it another way, 40% of the electorate do not vote for any of the main parties. Those 40% are likely to be hardest hit by the cuts. Wouldn’t it be better to try and get the votes of those 40% than the 30% that will vote for Cameron even if it was proven that he eats babies for breakfast? Keep arguing against the cuts, that way Labour may even get a few more votes.

“We’re in a deep hole, and we’re staying here for a while yet because the Conservatives are depressing the economy rather than boosting it”

You know something the IMF doesn’t?

From the Economist

“The reason for the unusual ardour is Britain’s near-perfect embrace of IMF policy recommendations”

the IMF has put its credibility on the line. If Britain’s recovery peters out, IMF policies—and near-term austerity in particular—will be held responsible.

“As Mr Giles says, the British policy mix will probably work out (thanks mainly, in my view, to the dutiful conduct of the Bank of England). But by cutting so much so fast, Britain has made things more difficult for itself, and less certain, than they need to be”

Troll or Astroturfer? Whatever, don’t feed it

@6

I’m not sure of your point – though I make it out to be:

- Project Merlin is a joke.
- The cuts have effected a decline in the confidence of both lenders and borrowers.

I’d agree with those, but I disagree with this:

“We are looking to consumers and businesses to spend more to make up for the cuts in public spending and increased bank lending is a crucial part of that equation”

Bank lending is vital for INVESTMENT, but to look to banks to lend so that people can CONSUME is exactly the problem. Overextending credit in this way gives the illusion of a rise in living standards and then the proceeds of growth are extracted as interest and fees. Increasing bank lending for the sake of it (as the Coalition are trying to do) is a bad idea.

@Workman Fred is the sort who would advocate letting sick and disabled people who cannot work simply be left on the streets to suffer all so he can have a few extra pence a week.

Sorry, Fred, but most sensible people in this country recognise that some sick and disabled people are incapable of work and need our support. Most sensible people also recognise that more sick/disabled people who *can* work would indeed be working now if there was less discrimination and companies were willing to modify the workplace so said people can work. However, this costs money and most employers not only refuse to even consider disabled people, but would never dream of modifying the workplace for them.

So, Workman Fred, take your empty, cold heart and go troll somewhere else please.

@39: “Bank lending is vital for INVESTMENT, but to look to banks to lend so that people can CONSUME is exactly the problem.”

I accept all the implied strictures there about the consumer debt mountain in 2008 of £1.3 trillion, most of which was mortgage debt. And I accept also that mortgage finance was too easily available, which is how we came to have a house-price bubble.

The trouble for the monetary authorities is knowing when there is too much consumer debt – for surely there would be a huge outcry if no loan finance is available for mortgages and to buy any of the many kinds of consumer durables from cars to PCs.

Moreoever, in these times of globalisation and internationally mobile capital, some percentage of potential borrowers would be able to raise finance abroad if they couldn’t in Britain – one of the major causes of the Asian financial crisis in 1998 was cross-border borrowing in foreign currencies in some Asian countries. I don’t have a foreign bank account but I know folk who do.

One of the early decisions of the incoming Thatcher government in 1979 was to abolish exchange controls and I can’t see much prospect of any British government reintroducing exchange controls – or, for that matter, the restrictions we used to have on Hire Purchase finance through to the 1970s.

“Workman Fred is the sort who would advocate letting sick and disabled people who cannot work simply be left on the streets to suffer”

Not a nice thing to presume about someone is it?
I don’t know what gives you that idea but you have me wrong, I would most definitely look after those like you mention, and by cutting back on those who shouldn’t get/need welfare, those who really need it will always get what they need when they need it.

“However, this costs money and most employers not only refuse to even consider disabled people, but would never dream of modifying the workplace for them”

I’ve always thought the best idea would be for the government to do more by employing those people because many companies really can’t afford the cost for maybe just one worker, especially if it’s a job where you would be no more valued than one of the lads.
But I would also like to see more done to help.

@Sunny
“Japan, has fallen off a cliff”
“Japan has been stagnating for nearly two decades!”

make your mind up.

First, it can’t be both, and neither of these are related to each other or the current political situation. Second, you’re ignoring the extraordinary nature of events which don’t indicate the underlying fundamentals of the Japanese economy.

The Japanese financial crisis of the 90s explain previous problems and the after effects of this year’s dramatic tsunami explain their current problems, so any conclusion that the medium-term outlook is worrying and requires a change in direction because ‘it’s about to get worse’ is patently false.

In fact together these two facts push the argument for ‘staying the course’ which means your logic is both perverse and partisan.

Try again.

@BenM
“We’re in a deep hole”

If you say so. But frankly I’d find it impossible to trust the people who dug it to get us out of it whether or not it were true.

More, better services is not the answer, or at least not exclusively. It doesn’t matter which sector jobs are created in so long as they are real jobs which add value to the economy. Focussing on expanding the bloated consumer base is madness, especially if your argument that the public has enough ‘stuff’ is correct.

@chaise guevara
“blaming the past administration, however fairly, tends in my experience to have a pretty short shelf-life as a viable tactic.”

how long has Thatcher been out of office? For the past 20 years Labour hasn’t agreed with you.

My opinion: it’s viable if it’s true.

“Therefore, Peter Watts argues, as have others like Rob Marchant and Dan Hodges in the past, that Labour must stop talking about the cuts.

This naive for two reasons.”

Naive? Bonkers seems closer to the mark. Cuts are going to be the story of this parliament; there’s going to be a steady stream of national stories about their effects on policing, the NHS etc., as well as local stories about libraries, bin collections etc. If Labour *don’t* talk about cuts, they’re going to appear completely out of touch.

In any case – it’s impossible, as of right now, to talk about public services *without* talking about cuts. And surely no-one thinks Labour shouldn’t be talking about public services?

@35 Charles Wheeler

Beautifully put. I’d like to cut out and keep those few paragraphs because they encapsulate so much.

My increasing worry is that Labour will carry on bumbling around hoping the tories will lose the next election as unpopular governments do, and thus win by default. Then they can carry on the pink tory policies of New Labour.

Where is the alternative? I’m looking at my neighbours in Brighton & Hove for a start, but I’d be desperate if I had to hope a party with one notable talent in Caroline Lucas was a real alternative to Labour.

After getting rid of the taint of the recent past Labour needs to promote its talented people to put some depth into its opposition so that it looks like a government in waiting.

The problem Labour have is the Coalition can constantly appeal to ‘tighten our belts’ common sense logic that is so simplistic and alluring to the public. It is ‘ common’ because it is rubbish, but just like a household is how the public instinctively think about the government. The public cut their spending when in financial difficulties and are better off by the same amount that they cut. Therefore, to most people it is a no brainier that the government should do the same. However, without offsetting growth we will not be better off as a society when the government consolidates their spending.

The present government or if it had been a Labour government would have had to reduce their spending of that there is no doubt. The awkward part where the present government appear to have no coherent plan is the offsetting private sector growth part. However, I have read nothing from Labour about what they would do to reform the UK economy. There really does appear to be structural problems in the UK economy that will prevent it even achieving our recent trend growth. Structural problems can only be fixed through supply side reforms. The government spending money supporting demand is not solving the structural problems, in fact, it is only covering them up. Why does the UK economy have problems with non-inflationary growth? What Labour need to come up with is a coherent economic plan that will allow the UK economy to perform better. Labour or any other government can’t grow the economy but they can improve the supply side.

The Coalition aims of less consumer debt and export-led growth is motherhood and apple pie stuff that no one could could disagree with. I am not sure why Sunny dismisses exports as we are not China or South Korea. We are certainly not going to have their export volumes as a share of GDP. However, an improvement in net exports is key. If real incomes are stagnating and consumer spending is subdued net exports will improve through a decline in imports. Exports took off during the 1990s after the UK exited the ERM. However, the euro focus of the UK economy and the mess of the eurozone is now seriously holding us back.

I tend to agree with those who say just warning about impending apocalypse just because the government are cutting spending is not a strategy. When the apocalypse does not come it will leave them looking shrill. What Labour need to set out is an alternative strategy rather than just opposing the coalition for the sake of it.

@thomas

More, better services is not the answer, or at least not exclusively. It doesn’t matter which sector jobs are created in so long as they are real jobs which add value to the economy. Focussing on expanding the bloated consumer base is madness, especially if your argument that the public has enough ‘stuff’ is correct.

Wrong. As I said, it doesn’t look as though the Private Sector has a clue where to innovate next. So the next big thing isn’t coming from that sector.

Everyone needs services, so it is ludicrous to cut those back when the Private Sector is flailing around so aimlessly. Services paid for by government mandated by the people are just – if not more – value adding to the economy that the peddling of endless tat – although that will get a boost too once we take care of employment in the economy.

Time to wake up from the Friedmanite fairytale.

@BenM

Strange, 845pm is a bit early to be drunk.

What’s truly ludicrous is that you use quotes inaccurately, so let’s look at what you said.

“it doesn’t look as though the Private Sector has a clue where to innovate next”

Now that’s a laugh – it is the job of the private sector to ‘flail around’ in every direction.

Not only that, even a cursory glance at business shows there is endless innovation going on, though we can argue endlessly about the relative value of each.

…maybe you aren’t aware that advocacy of a command economy died before you were born.

“Everyone needs services”

Let me offer you mine: we’re still getting them, but the bailiffs visited and now we’re not paying for them on the never-never and we can’t have everything we grew accustomed to unless we do things differently. Which means we must count the pennies – that doesn’t mean every cut is good, far from it, but it does mean choices need to be made.

Unless you didn’t know we are dealing with an economy which retracted by over 6% in the year after the crisis due to our overdependence on debt-financed services catching up with reality. That the economy was flat in the past quarter is, by comparison, a massive improvement.

Government finances were even worse due to the reduction of treasury incomes from the over-inflated banking sector, so to make calls to reflate the economy now is to support a return to those bad practises which got us into the mess in the first place and prevented effective reform from taking place under Labour when they opted for £200bn+ quantative easing.

What you’re proposing is that having lost your shirt you now want to gamble your trousers. The interim prospect may bring some relief from the humiliation you feel, but what are you going to do when it starts raining on the way home? The dark clouds overhead have only produced a light shower compared to what may come.

But if you really want things to get worse so that new deeper cuts are required later, that’s fine, but be honest about wanting to throw the country off the precipice to bring about the change you want.

Or perhaps is now the time for you to move to Libya? I hear Gadaffi also blames the bankers for the crisis and he is very generous with the services his supporters recieve – he could definitely do with your support!

48. Thomas

I’m a staunch capitalist, one that believes the power of the capitalist system can only be optimised through an active State.

Unfortunately we’ve been trying to implement the kind of la-la economics you believe in so it’s no wonder a lot of ground has been lost. Every State that’s swallowed neo-liberal hysteria has generated much worse outcomes than those experienced immediately after the 2nd World War.

Why? Because your economics doesn’t work. It’s a total fiction.

So, in the aftermath of the 2nd gargantuan crash caused by private sector greed in 80 years, what are we to do? Sit back indolently like you propose and further undermine not only the services we rely on, but those our children and grandchildren will rely on too? Like hell we’ll allow that to happen.

Your lot have had thirty years to show what your economics can do and the Credit Crunch was its ultimate failure. Our budget deficit was £140bn last year to support the country while the chaos your economics unleashed played out (and continues to do so). But even that’s insignificant in comparison to the $5trn or so thrown at the banks worldwide following their immolation.

So let’s just chuck your economics in the bin where it belongs, there’s a good chap.

@BenM
thanks for telling me what I believe in – as I’m not pro-Labour, I must be pro-tory, right?

Idiot.

Keep supporting the opposition though, they need as many of you as they can find to get where they belong.

50. Thomas

Want some cheese with that whine?

@BenM
you’ve got the smarm-a-lade, but you haven’t got any toast.