A Labour minister gave a speech on the economy today in an alternate Universe where cool reason rules over political debate.
Somehow, the text of this speech slipped through the dimensional portal between our two universes (That’s always happening to me) and landed in my Inbox.
I thought you might be interested in the speech, as it highlights some interesting differneces between our our world and theirs.
“Political Values and Economic Decisions”
Speech to “International Research On National Incomes Conference”.
by
Rt Hon Edward Griffiths MP, Chief Secretary to the Treasury.
23rd June 2009
Check against Delivery
IRONIC speech (as word document)
For twenty five years, the politicians and business leaders of leading western capitalist nations enjoyed a feeling unusual in the history of political economy.
Sweet vindication.
On issue after issue, the path of moderated free market capitalism was proven to be the right one.
Rival ideologies fell by the wayside. Growth was consistent, interrupted only by the occasional bubble bursting or failure to regulate interest rates and inflation correctly.
The west enjoyed a quarter century long cocktail party, moderated only by the power of central bankers like William Martin to take away the punchbowl of low interest rates when things got too rowdy.
The great moderation, we called it. The nice decade.
In the face of such triumphs, political debate focused not on the nature of our apparent victories over inflation, recession, unemployment and stagnation, but over the sweet spot to maximise growth. Values faded to the background, as details came into sharp relief.
For a while we heard a great deal about the post-bureaucratic age.
I believe the next election will be the first great post-technocratic debate.In this moment of crisis the age of values has returned.
My argument is that the best way out of the current crisis involves understanding how differing political values lead to choices over economic solutions – and that the best economic solutions require an emphasis on a wide spread of the benefits of growth.
In short, we are facing a fundamental divide in values and approaches. The choices we make now and in the future will have vast consequences.
None of this is to say that technical questions are not valid, or unimportant.
How much debt should we carry?
How much taxation is required to meet our societal ends?
How much tax will reduce our economic growth?
How far ahead or behind economic growth should public spending run?
These are not pointless debates, or to be sneered at.
When it comes to percentages of GDP tiny changes can, like Micawber’s shilling, result in happiness or misery for entire nations.
Indeed, this has been the focus of New Labour in government.
We accepted the path of socially moderated capitalism established across Europe during the eighties. We maintained the core balance of low taxation, interest rates to rein in inflation, and relatively low public sector debt. This meant that over a decade, British economic performance matched or outran our main comparator nations.
At the same time, we departed from laissez-faire philosophy by gradually increasing investment in public services and the capital programmes that we thought could make a difference to Britain’s long run economic performance and wellbeing. That was the social dimension, the nudge on the tiller that defined the Labour government of 1997 onwards.
We have seen, over the last decade, the difference such adjustments make.
We have new Schools, new Hospitals. We have thousands of extra nurses and doctors. More police and more community support officers. Crime fell, waiting lists fell, school achievement rose, public infrastructure improved.
We have more students at University, more support for parents, greater aid to those looking for work or needing to care for relatives.
Our opponents responded to this growth in provision in two interesting ways.
First they decried the effectiveness of our investments.
They said the money had done little good. They combed the statistics books for falls in productivity, issued press releases whenever a target was missed. We’ve heard all this for a decade. You could wallpaper this room with press releases decrying the efficacy of public spending.
Waste, they cried. Foolishness. Fecklessness.
All of which makes the second part of the oppositions response all the more interesting.
After a decade of denial about public investment, they now promise to spend even more on Hospitals.
The official Conservative view is that as far as hospitals are concerned, the investments of the last decade weren’t needed and were a huge waste of taxpayers money – which somehow leads to the conclusion that we need to spend even more.
In trying to explain this phenomenon, I observe that while protecting two spending commitments but offering up all the others as sacrifices might seems strange economically, by happy co-incidence it makes a great deal of sense politically.
It is consistent with the belief that while people like the idea of reducing the tax that they pay, they are very resistant to the actual impacts of cost savings on the services that most affect their lives.
By that analysis, the Tory problem was simple. If they offered the British people a cut in inheritance tax they found approval. Yet when they pledged to reduce schools spending to pay for it, the voters responded with disgust.
The last three General election results made the case quite eloquently.
So what the Conservatives have done under David Cameron is quite tactically sound.
By pledging to protect the services the public care about most, they wished to earn permission to attack the enabling state on its flanks.
So inheritance tax cuts replace tax credits and tax breaks for middle class married couples replace Sure Start, while future spending in areas like Universities, transport and economic regeneration can be cut to fund broader tax reductions elsewhere.
In other words: if you’re seen as caring on the NHS, you can do what you will elsewhere.
So far, we were within the realms of normal, technocratic politics.
The debate I outlined is similar to that Al Gore had with George W Bush, the original “compassionate conservative”.
It was a battle we on the left could join. It was the one we were all expecting at the next general election. The consequences would matter. We would be struggling for control of the tiller.
Yet this narrative seems distant now.
We are in the middle of an economic storm, and the priority is ensuring we don’t leave the storm damaged or miles off course. That takes a huge effort.
As a result, no debate about spending plans can ignore what we are doing to avert the current crisis, and what the alternatives are.
The Government’s response to this crisis has been definitive and based on our values.
As believers in the power of an active state, and confident that intervention can help prevent market failure and reduce the human cost of crisis, we tackled the threat of depression on four fronts.
First, swift action was taken to protect the banking sector, at great cost. In return for our support, we demanded in return that Banks ensure an easier availability of credit to support business and consumers.
Then as global demand collapsed on the back of asset price deflation and risk aversion, we worked with the Bank of England to secure lower interest rates and greater money supply because we believed encouraging people to invest would prevent unemployment and economic dislocation.
Next we ensured that consumers had more money to spend by cutting taxes in the short term. These tax cuts were aimed to increase the purchasing power of the money in people’s pocket. That meant they benefited those who needed help the most –as they were most likely to spend their extra income.
Finally we increased the rate of Government capital and current spending to provide direct stimulus to the economy. This improved public service investment, stimulate short term demand, and provides further work. We did this both to reduce the human costs of recession and because we believe that capital spending will strengthen our future economic infrastructure.
So from our political values sprang a clear plan of action: Secure the banks and re-open the flow of credit. Reduce interest rates and increase money supply. Reduce taxation in ways designed to stimulate consumer demand and stimulate demand directly.
Our opponents took a different view. Let’s call it the Osborne-Cameron plan
Skeptical of the role of the state, and dubious of the efficacy of intervention, the Conservatives reluctantly accepted the principle of stopping economic collapse via support to the banks, but they frequently stated that it was being done the wrong way, or that the Banks would not recover. They argued the private sector should step in, even when it was clear the private sector could not step in. Most of all they wanted the burden off the Taxpayer, even if that meant the risk of bank failure. We saw the consequences of that strategy in Lehmann Brothers.
Next, distrustful of the value of public investment, they claimed that we needed to protect the value of Sterling by reducing borrowing. Mr Osborne said “We are in danger, if the Government is not careful, of having a proper sterling collapse, a run on the pound…. The danger . . . is that it pushes up long-term interest rates, which is a huge burden on the economy.”
These comments were made at the moment of the highest pressure on Sterling.
Since then, Sterling has recovered and interest rates are low. Mr Osborne has not yet revisited his remarks.
I contend his mistake was not just “talking down the pound”. It was more significant than that. Because they are fundamentally sceptical about public investment, The Conservatives failed to recognise that during a global demand crisis a rush to reserve currencies could give British exporters a much needed cushion while also helping to prevent deflation at home.
By over excitedly talking about “a run on the pound” caused by borrowing, they missed what the real impact of a temporary decline in Sterling was for British businesses, and so failed to grasp why the Government was willing to allow Sterling to find its market level.
The Conservatives then argued we should do nothing that might prevent interest rates falling- – so no fiscal stimulus or tax cuts . People remember the “Do Nothing” quote, but the article it came from is far more revealing. Mr Osborne said in that article: “It is a statement of fact that, with interest rates still at 4.5 per cent, there is plenty of scope to stimulate demand with lower rates.”
So far, so good. The killer point followed: “A spending splurge, funded by extra borrowing over and above what the recession is already forcing on us will make that less likely.”
So it was sceptism about the value of action that led to a strategy of laissez faire, as ever. Well, we invested despite his advice, and interest rates are now at 0.5%. Gilt Yields have fallen from 4.5% to under 4%. We’ve not yet had a retraction.
So we can see from all this that what the Osborne-Cameron approach would have been – because of their values.
No Fiscal Stimulus. No Taxpayer funded bank support, No Tax cuts. No counter cyclical investment beyond the stabilisers.
So to begin with public debt would be a little lower. But the price we would all pay for that would be a recession that lasted longer, exports that would be far lower and unemployment which would rise far higher.
So the price of short term lower debt would be a crippled economy. In turn, that would require a massive reduction in spending or an even greater increase in debt.
We don’t have to look far to see what might have happened here. The Irish economy is not categorically different than ours, and their government no less foresighted.
But given their status in the Euro area they were unable to stimulate the economy via spending, unable to let their currency float, and unable to protect families from the consequences of recession though tax cuts. In other words, they were forced to follow the Osborne-Cameron plan.
The result is that the Irish Economy is likely to contract by eight per cent this year and the Irish government has already implemented four rounds of spending cuts and tax increases.
That is the consequence of following a strategy guided by conservative economic values.
So over the last two years, politicians on both sides of the British political divide have been forced to reconsider their fundamental views about the economy, about public spending, about the best way to combat a sudden collapse in global economic confidence.
As the certainties of the last quarter century have faded away, it has been to bedrock values that political parties have returned. We will see the results of that faith in activism or that belief in doing nothing to disrupt the markets.
Yet the electorate will not just be interested in what was done wrong or right in the midst of Crisis.
They will be interested in where go from here.
Here too, our views differ because of our values.
The Conservative argument is simple. Reduce Public spending overall. Protect Schools and Hospitals. Cut taxes on wealthy estates and give tax breaks to married couples on all incomes.
I submit that these policies do not address the serious questions we face as a nation because their values are insufficient to the moment.
Let us take the discussion over Public Spending. Over the last year, the Government took the deliberate decision to spend counter cyclically. We pulled forward capital expenditure, spent more on the automatic stabilisers, stimulated demand through tax cuts and increased spending in key public services and on supporting business.
After such a heavy investment period, public spending needs some restraint. It’s called counter-cyclical spending for a reason.
So we need to reduce the debts we built up keeping the economy afloat over the last two years.
The question is not whether we restrain debt, but how we do so and who pays for it.
The Tory position is that the following should pay less.
Those who pay inheritance tax for estates over £600,000 and married couples will get £20 a week, even if they don’t need it. These groups apparently need special support and lower taxes before anyone else in society.
Next, they promise that Hospitals spending will be protected. This is an innovative commitment.
However, to make up for these pledges and hold Government spending below that we project, they pledge to cut spending dramatically everywhere else.
Why nurses should be immune from cuts but not soldiers. I’m not sure. If you want to know why Doctors should be protected, but not policemen, you’ll have to ask George Osborne. Personally, I hold it is a tactical political choice, not a strategic or economic one.
Our response is very different – because of our values- First, we recognise that the action we took to protect the banking sector and stimulate the economy was expensive in the short term.
But over the longer term, we believe it will be more cost effective, as it reduces the cost of unemployment, reduces the chance of businesses going bust and therefore helps hold up tax revenues.
So when we look at the future of public expenditure we have to balance three things to ensure economic growth.
First – how do we ensure that the Public sector debt is reduced as a proportion of GDP over time?Second, how do we do this while maintaining investment in services, and increasing it in areas of greatest need?
Third, where choices need to be made about investment and tax levels we must ensure that the burden is shared across society – with the poor and middle class not suffering for the benefit of the wealthy.
There is always a danger that the economic debate circles around economic projections, which are theoretical and rarely accurate, and ignore economic decisions, which are real and make big differences.
So let’s be clear – the best way to reduce Public sector debt as a proportion of GDP is to ensure that GDP grows faster than spending. So we need to focus on the growing economy first, and spending projections second.
If the economy grows quicker than many analysts expect, unemployment peaks lower than consensus, inflation stays low and interest rates are manageable, the costs of the recession will be much smaller.
I’m not predicting such a smooth path, but it is important to remember that the aim of medium term policy is to achieve a stronger economy that has beneficial effects on public finances – lower debt, lower stabiliser spending and lower demand for state services. The aim is to beat predictions, not just make them.
That’s why the debate about how we handle the crisis is so relevant to forward expenditure projections.
I’d much rather be starting from the UKs position than from those countries who followed the Osborne-Cameron plan, and I certainly wouldn’t recommend anyone adopt such a plan now – it would lead to a 1937 style relapse.
So the first key to reducing long term debt is to get the economy growing.
I assert that our plans are doing that, I believe our opponents would harm our economy, and we will rightly be judged by comparing our strategy with the result of their in other Countries.
If we are successful in achieving growth, the pressure on Services grows less and we have more room to reduce taxes and increase spending.
However, it is best to be cautious and assume the pressures on public finances do not abate at all. How do our values answer the question over public spending?
Here’s what we are doing.
To help combat the recession we’ve embarked on a major capital investment programme – new schools, new hospitals, tube and rail line investment, cross rail and the Olympics. These are big projects which we’re pressing forward with over the next few years. They lead to an increase in the capital budget until 2012.
Once that capital investment is completed, there will be less need for increased capital investment. So we can switch more of our funding to ensuring provision of services is of high quality.
Say a company has just bought a new die press in a tough but growing market. With money tight but demand growing, it should allocate fewer resources to buying another die press but increase expenditure on materials and workers so it can meet demand, while ensuring their processes are as efficient as possible.
Our die press is the wave of school building, hospitals and transport infrastructure we are injecting into the economy over the next three years. Our consumer demand is for better public services. Our process improvements our commitment to reformed public services
By spending the capital investment money now to boost demand, we make an implicit bargain not to spend it again in the future. If we increase Capital spending by six billion in a single year, we must accept that this is exceptional expenditure rather that a new baseline.
In the light of this, our policy is to gradually increase current spending so services improve, while in the short term holding down capital spending once the current counter cyclical investment is complete, only allowing capital spending to grow in real terms as the economy improves and the cost pressure of the automatic stabilisers lessens.
This means as people find work and pay taxes, more money is released into the capital fund, and the capital to current spending profile changes.
In the short term, we prioritize current spending, so whether you’re a doctor, nurse, policeman, fireman teacher or soldier, you can be confident that your ability to do your job will benefit from increased budgets, even though increases will be small compared to the last few years.
What we refuse to do is promise increased capital spending for five years for the two government departments with major capital programmes in place already, thus forcing other services to suffer more in direct consequence.
That policy would lead to major cuts in current expenditure across the board in areas like policing, transport, economic regeneration, universities, science and the digital economy.
In other words, it would lead to cuts in exactly the places we need to maintain current investment to drive future economic growth. These are not the places a smart government should be looking for short term cost savings. A ten per cent cut in the Science budget would be economic lunacy for a country like Britain that needs to export to grow.
Our opponents disagree. They feel that cutting the budget of the police is an entirely reasonable response to recession, but doing the same for teachers is utterly unacceptable.
This seems to be a political strategy argument to me, not a question of economic priorities.
Finally, there is the question of where burdens should fall.
Politicians love talking about tough choice, but hate making them. So let’s be clear, the 50% tax rate was an unpleasant choice to make which raises valuable money to support our objectives.
The costs of driving recovery must be shared by all of us. That means not extending tax cuts for the wealthy. It means public sector pay restraint. It means that we will put VAT back up again. All these moves will improve our income profile, but annoy many voters.
Our opponents see no such need for shared contribution. From income tax, to making sure wealthy estates pay less, to tax breaks for wealthy married couples to cutting public services—The conservative proposition seems to be, if you’re one of us we’ll help you out. If you’re not, we’ll ask the voluntary sector to help.
So these are the divisions between us.
On our side we support swift, decisive action to support the real economy and thousands of families, because we know that when millions lose their jobs, when companies close and homes are repossessed, then it is our hopes that suffer, not just our Bank balances.
In doing this we have changed the future capital spending profile. So we need to be extra careful that our future plans do not impact front line services. Which is why I can announce today that we guarantee real terms increases for all front line services, not just the politically sensitive.
We can do this because of our capital restraint while the economy recovers. Bringing forward capital spending is just that—not money you can spend twice.
We are doing it because we believe that all public services matter, that science will be the bedrock of future growth and policing is essential to a safer society – and they deserve the same protection offered to hospitals.
Our opponents disagree. They oppose our current spending, except where they support it. They oppose our proposals to stimulate the economy, except when they’re in America. They oppose our forward spending plans, except where they thing they’re popular.
Winston Churchill once said of America that it gets everything right once they’ve exhausted the available alternatives.
The same can be said of today’s Conservative party.
They usually come round to progressive policies in the end, though it takes a few thrashings to get the message through. However, our public services and economy cant afford to allow them time to catch up.
If these were normal times, then we would simply be debating the direction of travel of public expenditure. But these are not normal times. They are a crisis of modern global capitalism.
The response to that crisis had to be immediate, effective and dramatic.
The way forward has to be governed by the need for sustained growth, equity in the sharing of burdens and careful distribution of tight resources.
The Conservatives policy agenda failed the test of the crisis. They were limited by their ideology and unable to understand the nature of the problem.
I believe that with an economic strategy governed by political considerations that pre-date the current crisis and blinded by a refusal to withdraw proposals that would tilt the economic table squarely in favour of the wealthy and against investments vital for our long term recovery Conservative policy also fails the test of a plan for growth.
Our values- of fairness for all and equity in both good times and bad, give us the right framework to both deal with the crisis and plan for the future.
Our task is to deliver growth via demand stimulation in the short term and strategic investment in the long term, mitigate the horrific effects of unemployment and job loss by protecting family homes and offering help and security to those in both in work and out, to invest in frontline services at a time of rising need, while securing the public finance by showning restraint across the capital expenditure cycle.
These are policies that spring from the core Labour party values of fairness, equity and community.
These policies offer favours to no-one and help to all, from bankers in crisis to homeowners in negative equity.
Most important of all, they are the only values, the only policies, fit for guiding us to growth and prosperity for all British citizens.
31 Comments
June 23, 2009 at 12:32 pm
I am going to read this Hop , but if turns out to be a long apology for the pack of lies about Tory cuts versus Labour “Investment ” I will come round to your house and sing a selection of arias taken from Gilbert and Sullivan . All night ( and I cannot sing )
June 23, 2009 at 2:01 pm
There are some bits that have germs of truth on the consistency of the Conservative response but the large arguments have no basis in reality whatsoever .Where you are most obviously lying , and not even very well, is on taxation
Eg.
We maintained Low taxation – Oh quite and I have maintained uniform sobriety
We got super value for the splurge …Yeah if you are on a gold plated pension and in a union
But the spurge never happened ….Oh…sorry where were we ?
Our growth was peerless – …not compared to anyone not in socialist Europe and comparable and anyway it was a property bubble and we cannot do it again
Crime did not fall – its just not worth reporting violent crime went up
Education slithered down ranking literacy is actually worse with £90 billion thrown at the system , its an it’s a disaster
The promise to increase spending in the NHS is as you know now dated it will be defended over other calls .So that whole section is Alice in Wonderland
IHT did not replace tax credits what are you talking about ?
The 50 % tax rate was an easy choice that could have been made at any time the reason it was not was because it lost money it was only there to provide a skimpy jock strap barely concealing the nasty hairy and pendulous scale of taxation Labour were letting us in for
IHT is irrelevant to the discussion of forthcoming taxation so the implication that it is central is a lie.
We sail the ocean blue,
And our saucy ship’s a beauty;
We’re sober men and true,
And attentive to our duty.
When the balls whistle free..etc.
June 23, 2009 at 8:12 pm
Oh well I do think its rather a shame no-one else commented on your opus magnum , a bit daunting perhaps , but hardly the spirit that conquered an Empire . Poor form .
It is very skilfully done . One of the problem is that most of the Brown spending has no Keynesian rationale even if one accepted it .So whatever ones view of the (minimal ) demand shove surplus to stabilisers ( hence your ill advised shouts for more stimulus ) it has nothing to do with the soaring levels of debt which are caused by commitments taken on by not reforming the Public Sector ina boom. It does nothing for demand it only holds back growth . As you have previously admitted
As it is a truth universally acknowledged that the Public Sector is too fat there is no excuse for not starting the slimming now …except the obvious. It would hurt Labours backers in the Unions .
The bit that intrigues me though is the use of the phrase ‘moderated capitalism’ to describe New Labour . That describes the Conservative position surely ,accepting the market and trying to mitigate its unevenness. I would have said that New Labour at heart still believed the State knows best , and only has recourse to markets and those who work in them for highway robbery . Moderated Socialism and not much moderated .
On tax you are utterly dishonest
June 23, 2009 at 8:42 pm
I am intending to comment, but when my comment is ready.
June 23, 2009 at 10:20 pm
The Rt Hon Griffiths has written an entertaining speech with a pleasing structure moving from analysis of what has been to what may be.
I would prefer him to lay more emphasis on the government’s role in fostering greater economic equality as a key mechanism to boost long term demand and growth in a sustainable manner ie. rather than growth that depends on the development of the next set of asset/credit bubbles.
He would also do well to tackle the international dimension of the current problems and how the government will contribute to tackling the export/import, savings/deficit imbalance.
Further, he could do with addressing what those pesky uniliateral (well apart from the Irish) neoliberal German nuts are up to with their current anti-stimulus rhetoric and their even nuttier plans for legal change to outlaw budget deficit (see Duncan’s place).
June 23, 2009 at 10:36 pm
I understand (but don’t accept) the argument that ‘Labour values’ are better suited to getting us out of the current mess but let me challenge from a different angle.
Is there an argument that says ‘Labour values’ have had a part to play in worsening our experience of the downturn (debt levels etc.)?
Not sure if it was here or elsewhere that I offered this tortured metaphor before but – suppose you have a choice of two drivers, one with excellent recovery skills should you find yourself in a skid but who’s prone to erratic driving and more likely to lose control and another without any talent for recovery whatsoever but far less likely to need it because of the way they drive. Who do you want behind the wheel….?
June 24, 2009 at 5:54 am
Worth reading Danny F today. Your post here makes the same underlying intellectual error he’s talking about – namely the idea that every penny of public spending is of value & can’t be cut without significant social consequence.
June 24, 2009 at 9:30 am
It’s always worth reading Danny F, but I’m not quite so sure that he’s right on this – lets seperate capital and current spending out, as I’ve already said that capital spending should be reduced after the current burst of spending, in order to preserve current spending.
Now, we can accept I think that there is a marginal utility of every pound spent on public services – if we spent 99.9999 of our GDP on public services, the marginal utility of that last pound would be fairly small. So there’s presumably a theoretical curve one could draw. However, the componenents of that curve, how one would measure the utility of each pound spend are massively varied – how does one compare the value of an extra pound in defence, with the value of an extra pound in schools?
Now Danny has great fun with the argument that some public spending is irrelevant – quoting a recipe book, I believe – but his case seems to be that the state can pare down to an essential list of services, the rest of which have little or no social value. But he’s wrong about that.
First of all, the “free cookbooks” do have a social value. We have a huge problem with obesity in this country, and addressing that or not has an impact on future spending profiles. One of the reasons British families are such poor cooks today is that the teaching of domestic sciences declined as the state tried to pare down and minimise essentials. Decisions have consequences, even if we want to pretend they don’t.
Second, i find the argument that the state is inherently wasteful yet one can eliminate this waste simply by reducing it’s budget enough, ludicrous on it’s face. Yes, you will probably eliminate waste as you reduce budgets – but you will also reduce services because if organisations are inefficient, they are not going to be transformed by budget reductions alone.
Finally, I point out that the the Conservative position is currently that spending on Healthcare should be protected, while all other government departments suffer. As the NHS has had the biggest increase in funds under this government, surely the poisition should be that there are ineffencies to be identified there too?
June 24, 2009 at 11:06 am
Are you seriously suggesting that a cost-benefit analysis on state-produced recipe books would yield a positive result Hopi?
Of course obesity represents a cost to the public purse and neither Danny nor I are arguing for the complete abolition of any spend on public health promotion – we’re just arguing for an adjustment to our priorities in light of the mess we find ourselves in.
His example is proof (strong word, I know, but a fair one I think) that Gordon Brown’s continual refuge in the ‘Tory cuts’ line is deeply dishonest and insulting to the people he claims to represent.
The Tories are looking to engage with the argument that the state can no longer (and should no longer) do everything it once did. That’s an honest and fair proposition to put to the public in light of our economic circumstances. A confident government would willingly engage with the detail of that and explain what things they would stop and why the opposition plans were bad for the country. I happen to suspect that a Labour party led by Blair (or indeed Purnell, Reid etc.) would do just that.
The PM seems to be running scared of that discussion and has decided on a campaign tactic of scaring the public and misrepresenting his opponents.
And hey, that’s politics and it probably represents Labour’s best chance of success. But speaking as someone who’s voted Labour all their life I’m not sure it’s something to be proud of or that will convince me next year. I’m not entirely sure it’s convinced you either Hopi but hey, the word ‘loyal’ is in your sidebar so I guess…..
June 24, 2009 at 8:07 am
There are lots of things that are not true in this but you have to admit it is superbly well done . Having read the Tory graph and Gurdian comment sections today you do wonder how on earth some of them get paid to do such infintely inferior stuff
Heffers bit is almost risible its so weak
June 24, 2009 at 8:20 am
Hopi – Excellent piece. I do wish Government ministers would talk like this. The focus on values is a great idea.
Newmania – Taxes, in most cases, have been lower than they were under Thatcher.
You know I don’t accept that the 50p rate will lose money. But let’s stop debating that one and await the data.
June 24, 2009 at 9:04 am
Griffiths in fantasy land.
June 24, 2009 at 9:35 am
Never a truer word…
June 24, 2009 at 9:48 am
Newmania – Taxes, in most cases, have been lower than they were under Thatcher.
Rubbish and even if it were not ‘irrelevant ‘. Spending has rocketed it has increased by the amount that is collected in INCOME TAX. c.
( and another think tank published research showing that IHT will lose money as Brown himself predicted yesterday…. ).
Back in your box Duncan
June 24, 2009 at 10:27 am
Yes, you will probably eliminate waste as you reduce budgets – but you will also reduce services because if organisations are inefficient, they are not going to be transformed by budget reductions alone.
Here is where the New Labour advocate of moderated Communism departs this solar system . Far behind him he leaves teeming millions of people not clever enough to see how right he is in a parallel universe of pure reason and absurdly impressed by their personal experience that people, can usually do the same thing at half the price if they have to , in fact often better .
When the “Contempt for the tax payer “ curve is plotted it should not of course be plotted against the % of GDP but the quids thrown on the bonfire .
The problem is Hopi , we are all out here living with New Labour’s state , dealing with its heroically overstaffed and yet utterly useless Coucil employees , welcoming eight child development quantifiers to tea when Little N has a tantrum, and waving ta ta to teachers as they leave for their 3 months of hols on £50 k plus pension and no child care to pay.
Of course if you rob Peter to pay Paul you get Paul`s votes ,….there an awful lot of Peters though….
June 24, 2009 at 11:59 am
Liam,
I’m not arguing there shouldn’t be reductions in public spending. I’m arguing that a reduction in capital expenditure is required after stimulus, and that the focus of a Labour government should be ensuring that the current expenditure rises moderately in those areas – such as education, science, crime, and yes, public health – where the economy and society will benefit most by us so doing.
I further argue that we make this choice, rather than the tories tactial choice to invest in health at the expense of everything else- because we are believers in the power of the enabling state to improve peoples life chances and thus wider society.
By investing in science spending and schools, for example, we get better chances to attract FDI as we have more chemistry graduates and a better skilled workforce. The Tories disagree because they are sceptical about the value of this investment, only protecting health out of a tactical political choice.
And actually, yes, I do think public health and teaching people to cook properly is pretty important. I walk go home past Brixton and see dozens of children eating deep fried chicken from kebab shops. You can’t change that behaviour without investing in a range of projects to increase awareness.
I’m willing to bet that the parents of those children don’t know much about cooking (not least because of the death of domestic science in the early national curriculum era) , and don’t have many recipes to turn to, while families with a history of heathly eating have shelves loded with books by hugh Fearnley Whittingstall.
Helping families with a history of poor food consumption to eat better seems an entirely laudable aim, if one subject to mockery by middle class journalists whose readers consume food supplements on a regular basis. Newspapers are regularly full of articles condemming the eating habits of Britain’s poor. Why should they also be full of articles condemming attempts to change that?
June 24, 2009 at 1:22 pm
Quick couple of things then.
You say Labour are “believers in the power of the enabling state to improve peoples life chances and thus wider society.” I voted Labour last time and share that belief . Cameron and the Tory front bench share that belief as well. It’s one of those vacuous phrases that doesn’t mean a whole lot until you expand on it and start talking detail.
So why does the PM or any other senior Labour figure seem to reluctant to be drawn on that detail? Why is it that Brown seems to have settled on a blunt ‘Tory cuts’ line of attack, scaring people about ’schools’n'hospitals’ and what the nasty Tories might do if he believes he has a positive case to make about the ‘enabling state’?
The answer, I think, is that it would force Labour onto territory it doesn’t want to fight on – namely defending state-sponsored cookbooks (and everything from SureStart to the ‘Fruit & Veg/5-a-day coordinator I was introduced to at my 3 yr old’s nursery class last month, a nursery with c25kids). If GB & co. have that level of faith in the ‘enabling state’ they’ve established then let them articulate it, let them justify that spend and stand proud behind their achievement.
I happend to think Labour DOES have a tremendous amount to be proud of but perhaps political change is like steering a ship – you can’t ultimately steer the correct course without veering harmfully in either direction. The cookbook is only one piece of evidence that we’ve veered beyond what’s sensible…
June 24, 2009 at 4:01 pm
I disagree with your assertion about Cameron oand the state – he has said repeatedly that he is sceptical of the state (which is fair enough – he believes the job of the state is best done by the little platoons. Personally, i think if the state is giving the little platoons money it needs a say in how they’re spending it, which takes you back to the same place), S0 I don’t think it’s a stretch to say that the conservatives are fundamentally more skeptical about the state than labour.
But that’s by the by – Isn’t my proposed speech exactly what you request? A statement of what the role of the state should be in times of crisis and an assertion of the value of the services it provides and an argument for maintaining investment in them even in difficult fiscal times?
June 24, 2009 at 2:43 pm
…and is if to prove my point this approach by Brown seems to be unravelling this afternoon and exposed for it’s flimsy relationship with the facts.
See Jim Pickard on the FT Westminster blog…
http://blogs.ft.com/westminster/2009/06/gordon-brown-and-his-elephant-trap/
June 24, 2009 at 7:37 pm
You’re at that framing thing again Hopi – I wouldn’t deny for a minute the Tories are more sceptical of the state than Labour and I didn’t suggest otherwise. I just pointed out the ‘enabling state’ isn’t some binary monolith, either on or off – the Tories support it too just on a different scale from Labour. Why can’t that be the argument instead of pretending the Tories want to close hospitals and kills kittens?
June 24, 2009 at 12:49 pm
Hop , if I produce a list of silly ways in which tax payers money has been wasted and you invent some excuse for each one , who do you think will run out first?
Shall we start the ball rolling with the postcard campaign by Bromsgrove District Council that asks local residents whether they are ‘Glad or Grumpy ?(£1500)
Lets get the old cretative juices flowing hmmm…
” We are only starting to calibrate the huge cost accruing from depressive states . Breaking down the “culture of silence “ is an acknowledged social good as verified by Proff Grant and his team of grantlets in their authoritative research on feeling happy .
In fact the more of your money we spend on such “Initiatives “ the better .
Furthermore I`ll take no lectures form “Middleclass “(eeek !) smuggos who spend hours at a time investigating their spiritual innards with their pet therapist . Harrumph ! “
June 24, 2009 at 3:05 pm
Nah Conservative-controlled Bromsgrove District Council are clearly pissing money up the wall: you should vote Labour for better priorities and efficiency.
June 25, 2009 at 1:11 pm
Maybe a touch late, but;
“The aim of the “grumpy or glad” consultation exercise is to ensure that
we reach as many of the District’s residents as possible so that the final
Strategy is based on the things that are important to our customers, as
well as evidenced research.”
In other words, it was a legally obligated advertising campaign, seeking to elicit the views of the local residents on their councils sustainable development plan. Albeit one with a silly slogan.
This is my problem with your line of argument; it always relies on not knowing what the purpose of an exercise is, and then transferring that into scepticism about the exercise itself.
It’s the same with the apocryphal “lesbian bereavement officers” line. Don’t know why a service exists? That’s ok, you can still mock it on cosmetic grounds…
June 24, 2009 at 3:07 pm
Hi Liam,
“The Tories are looking to engage with the argument that the state can no longer (and should no longer) do everything it once did. That’s an honest and fair proposition to put to the public in light of our economic circumstances. A confident government would willingly engage with the detail of that and explain what things they would stop and why the opposition plans were bad for the country.”
But unless I’ve missed it, the Tories haven’t actually set out the things which they think the state is currently doing but which it should no longer spend money on.
I accept they have education and welfare policies which involve transferring responsibility for delivery from the state to other agencies, but for those policies to work then (at least in the short term) it involves just as much, if not more, public money being spent.
If the Tories did this then I am sure Labour would steal their good ideas and attack their bad ideas, but we’re not even at that stage at the moment.
June 24, 2009 at 7:29 pm
The Tories haven’t provided a wealth of detail here Don probably for the reasons you point out – Labour would pilfer it.
But my point is they’re travelling in the direction of an honest, straightforward discussion of what differs in the two parties values – we think the state shouldn’t do this, you do. Labour seems scared of that discussion and wants to misrepresent what the Tories intend to do.
June 24, 2009 at 10:41 pm
Don’t really agree with that. Anyone who cares can find out what Labour thinks the state should and shouldn’t be doing or spending money on (because Labour is in government, and rightly gets the credit or blame for what money does or doesn’t get spent on).
In contrast, it is incredibly hard to find out what the Tories think the state should and shouldn’t be doing or spending money on, because they aren’t telling us beyond giving a few very general hints.
For example, when Labour says “Tory 10% cuts mean that thousands of police officers are going to get the sack”, the Tories could respond by saying “no, we are not going to sack any police officers, instead we are going to save £x million by cutting the Preventing Violent Extremism fund, £y million by ending the youth outreach service and £z million by sacking all the people who work specifically on solving hate crimes, because we think in these difficult economic times that these should not be priorities for the state to spend money on”.
Then there could be a debate about whether the police force should spend money on hate crime prevention, youth outreach and preventing violent extremism or not, and people could make their minds up (I think there are decent and interesting arguments on both sides of this).
Now there are any number of good reasons why the Tories don’t want to be specific about which things they don’t think the state should spend money on any more, and would rather wait until they are in government before making their minds up.
But it is a bit harsh to criticise Labour for not engaging with a debate about the role of the state when Labour are the ones who have told everyone what they think the state should do and the Tories haven’t.
June 24, 2009 at 4:02 pm
Don when you mention other agencies and short term increase in expenditure I take it you mean the welfare reforms which New Labour were quick to follow half heartedly . On education it would not cost more even in the short term and frankly such colossal sums have been wasted on education it would be virtually impossible for the proposed freedoms to make matters worse .
The costs for the reform of welfare however were largely there because it was conceived at a period when the public that were unprepared to see any nasty medicine handed out without a thick and tasty sugar coating of help and training and all that. Methink the public are now ready to say “Just get a job you lazy sod I `m not paying” .
The costs then were political costs and need not be so high . The moderate Cameron Conservative will of course seek to keep any suffering to a minimum in the context of the reforms the Public want , and the duty to clean up the mess which the markets are relying on unless we want to start paying 6% right now . The suffering caused by the current human dump is unlikely to be exceeded.
I doubt you will agree with me there , however you might purely tactically wonder with me at the wisdom of New Labour banging on about Tory cuts when that is immediately read as ‘less tax rises’ . In fact people back read such positions instinctively a fact New Labour have been astonishingly incautious about
. The more Labour brag about about spending and “Investment “ the more people read tax rises . Some time ago a previously settled approval of state expenditure changed at what appears to be a deep level .New Labour then ,are already on the territory they fear most .Taxes .
By attacking cuts they are actually advertising their weakest flank .Mr. Cameron is no doubt most appreciative
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