‘there’s hardly any difference between the main political parties’.
It’s a claim the Greens, SNP and UKIP now repeat endlessly without being challenged. It is also a claim exposed as complete falsehood last week.
For all the Chancellor’s giveaways and triumphant rhetoric during the Budget, the most significant change was a capitulation to Labour’s charge that the Tories were cutting spending to 1930s levels. In fact the difference between Labour and Tories – especially on economic matters – is the biggest it has been in over a generation. To claim otherwise is to be ignorant of the facts.
Let’s go over the numbers first. In December last year, Osborne said he would slash government spending until it reached 35.2% of GDP, a level last reached during the 1930s.
Rather than accept the cuts, Labour attacked his plans as “extreme and ideological” and said they would not match Osborne’s race to the bottom.
The difference between Labour and Tory plans on spending is colossal. To cut spending to 35.2%, the IFS said Osborne would have to cut departmental spending by £55bn from 2015 to 2020, over £20bn more than what has been slashed over the last five years. Key government departments would have to cut spending by over 50%, after already being cut to the bone. It would render many of them useless.
Labour plans are significantly different but lost in technical detail, which has allowed many on the left to wrongly claim they are the same. Firstly, they have committed to raising taxes to cut the UK’s £90 billion yearly budget deficit (i.e. the 50p rate, Mansion tax, bankers’ bonus tax, a higher bank levy), while Osborne has pledged to focus on spending cuts rather than tax rises.
More importantly, the Tories plan an overall budget surplus by 2018-19, while Labour has only committed to a current budget surplus in the next parliament. This sounds like a boring technical detail – and in many ways it is – but the practical difference is vast.
It means that while Coalition had planned over £55 Billion in spending cuts, Labour had pledged only to plug potentially a £4 Billion gap – which could even come from tax rises. A difference of Labour and Tory plans of more than £50 Billion is not to be sniffed at (in comparison the entire Scottish Budget of 2014 was £35 Billion).
To claim that Labour and Tory ‘austerity’ is the same, as some on the left have done, isn’t just ludicrous but a bare-faced lie. It illustrates a huge distortion of the facts. Of course, the Greens and SNP have an interest in saying that Labour and Tories are the same, but that doesn’t make it true.
Last week was significant because Osborne was forced into a u-turn on the biggest issue of the past five years. Of course, the press played this down. He retreated, somewhat slightly, from extreme austerity: pledging to cut spending to 36% of GDP rather than 35.2%. This mostly came from the OBR’s projection that spending on debt interest in 2019-20 will be £9bn less than it expected earlier.
But Osborne’s sleight-of-hand had bigger meaning for Labour: now it means they don’t have to make any cuts over the next parliament, as the IFS pointed out. The difference between the two parties is now even more stark.
To the naysayers who still maintain that Labour and Tories are ‘the same’, a bit more explanation is required. Last year Osborne said he would publish a ‘Budget Responsibility Charter’ and test whether Labour would vote for it. It put Labour in a lose-lose position: they would be painted as ‘profligate’ if they didn’t sign up, and painted as signing up to Tory austerity by the left if they did. Neither was true, since signing up was consistent with Labour’s initial plans. Labour decided to avoid Osborne’s trap and he didn’t bother publishing the Charter. It changed nothing.
Furthermore, the claim that Labour has signed up to Tory austerity until 2016 is untrue. As a matter of technicality, Labour cannot reverse plans already put in place for that fiscal year after being elected.
This has always been a somewhat technical debate, obfuscated by many who have an axe to grind. For political and economic reasons, Labour could never be like Syriza, so it has always been ridiculous to hope it could. Plus, it’s easy for the Greens and SNP to make wild claims about rejecting austerity without spelling out how a massive increase in spending required would be funded.
I suspect that most people who have already decided that Labour and Tories are the same won’t ever be convinced. Labour’s plans won’t catch the world on fire, but to claim they are the same as Tory austerity plans is a lie that has finally been laid to rest.
With big thanks to Labourlist author Sunny Hundal.
Recently, the SNP, Greens, TUSC and other parties on the so-called left have made the claim that: “Labour voted for austerity.” This is such a blatant lie. The vote, clearly stated on the Hansard record (see 13 Jan 2015: Column 738, Charter for Budget Responsibility), was pertaining strictly to the motion: “That the Charter for Budget Responsibility : Autumn Statement 2014 update, which was laid before this House on 15 December 2014, be approved.” That isn’t about austerity.
The charter sets out that the Office of Budget Responsibility (OBR) will continue to monitor our fiscal rules. As we know, the OBR has written extremely critical economic forecasts and analysis of austerity and the Tory spending cuts, clearly expressing the risks that the Chancellor is running and the scale of the damage his strategy will inflict on what remains of our public services.
Furthermore, austerity and fiscal figures are not mentioned at all in the Charter.
It’s worth noting that whilst Ed Balls challenged Osborne, there was a curious silence from the SNP and the Green Party. It was Ed Balls that challenged Osborne’s outrageous claims regarding “halving the deficit”- such a blatant lie, upon which even the exceedingly Conservative Spectator spluttered contempt. Or any of the other lies, some of which have already earned the Conservatives official rebukes from the Office for National Statistics. (See “bankruptcy lie” for example, on the hyperlinked article)
Furthermore, it’s about time that some MP’s, including Caroline Lucas, amongst others, recognised that there is a fundamental difference between the meaning of the word budget and the word austerity. Conflating the two for the purpose of politicking is unprincipled and dishonest.
It’s also worth noting from the same debate on the Hansard record:
13 Jan 2015 : Column 746
Caroline Lucas: Does the Chancellor agree with me that with the feeble and inconsistent opposition coming from the Labour Front Bench, there is a very good reason for seeing the SNP, the Greens and Plaid as the real opposition on this issue because we are clear and consistent about the fact that austerity is not working?
Mr Osborne: That shows why we want the hon. Lady’s party in the TV debates.
Yes, I just bet they do, to collaborate with the Tories in attacking and undermining the Labour Party, not the Coalition, who are, after all, the ones responsible for introducing austerity measures. I don’t imagine for a moment that Osborne values further challenges to his outrageous claims of efficacy regarding austerity measures.
What is very evident when you read through this debate, is that Ed Balls and a couple of other Labour MPs presented the ONLY challenges to Osborne on this matter, just to reiterate this important point.
It’s also worth bearing in mind that Ed Miliband established the International ANTI-austerity Alliance. Back in 2012, Miliband said: “There is a grip of centre-right leadership on Europe which has said there’s only one way forward and that’s austerity, and you’ve got to have a decisive move away from that.” (See also: Labour leader Ed Miliband’s anti-austerity alliance will fight for the European dream.)
And why would Miliband be attending ANTI-austerity protests if he supported austerity?
It’s interesting to see the Chicago Tribune’s article: Ed Balls, UK’s anti-austerity finance chief in waiting Balls dismissed Osborne as a “downgraded chancellor” after Britain lost its triple-A credit rating.
One of his main charges has been that the government is unfairly spreading the economic pain it deems necessary to fix the economy. Austerity cuts are the burden of the poorest.
Balls says that a decision to cut the top tax rate amounts to an unjustified “tax cut for millionaires”, whilst his party has been scathing of reform of the welfare system.
A point echoed many times by Ed Miliband, too. Accusing the government of making lower or no income groups pay for the recovery while shielding the rich is a claim which strikes a chord with some voters who view Cameron and his government – many of whom were educated at the same top fee-paying school – as out of touch.
Caroline Lucas was born in Malvern to Conservative parents and attended Malvern Girls’ College (which became Malvern St James in 2006), a fee-paying private school. Ed Miliband, on the other hand, went to a comprehensive school.
Polls also show that many voters approve of the government’s drive to rein in welfare costs and the government has demanded that Labour spell out what they would do to fix the economy. They have, but with understandable caution.
Labour’s careful, costed and evidence-based policies include: a Bankers’ Bonus Tax; a Mansion Tax; repeal of the Bedroom Tax; a reversal of the Pension Tax relief that the Tories gifted to millionaires; a reversal of the Tory Tax cut for Hedge Funds; freezing gas and electricity bills for every home a the UK for at least 20 months; the big energy firms will be split up and governed by a new tougher regulator to end overcharging; banning exploitative zero hour contracts; introduction of a living wage (already introduced by some Labour councils); a reversal of the £107,000 tax break that the Tories have given to the millionaires; reintroduction of the 50p tax; scrapping George Osborne’s “Shares for Rights” scheme that has opened up a tax loophole of £1 billion; ensuring Water Companies place the poorest households on a Social Tariff that makes it easier for them to pay their Water Bills; breaking up the banks and separating retail banking from investment banking; introduction of measures to prevent corporate tax avoidance, scrapping the Profit Tax Cut (Corporation Tax) that George Osborne has already announced for 2015 and many more.
These are not austerity measures. They are strongly redistributive policies.
It’s difficult enough opposing the manipulative, lying authoritarian Conservative-led government, without having to constantly counter lies and smears from fringe parties claiming to be on the Left, whilst propping up the Right. Shame on them.