Wednesday, July 23, 2014

If you were holding out the hope that an incoming Labour Government would end austerity...

Party members have endorsed the tough fiscal position Ed Miliband and I have set out. We will balance the books, deliver a surplus on the current budget and get the national debt falling as soon as possible in the next parliament.
You can't get plainer than that. With those comments from Ed Balls, the course of the next five years is set. An incoming Labour administration will eliminate the government deficit - £105.8 billion in 2013/14, lest we forget - and run a surplus by the end of the next Parliament, possibly sooner.

Given the optimism priced into the prediction by the Office for Budget Responsibility (OBR) that the deficit will be eliminated by 2018/19, based on current plans, it is clear that Labour are going to have to either raise more income, or cut spending further.

Ed Balls has, perhaps, given a clue as to which of those options he prefers when he goes on to say;
But we will get the deficit down more fairly.
Well... yes. But Rachel Reeves has been laying down some of what she means by this as Labour's Shadow Secretary of State for Work and Pensions...
A Labour government will introduce a Basic Skills Test to assess all new claimants for Job Seekers Allowance within six weeks of claiming benefits.
Those who don’t have the skills they need for a job will have to take up training alongside their jobsearch or lose their benefits.
Labour’s Basic Skills Test will give the long-term unemployed a better chance of finding a job and will help us to earn our way out of the cost-of-living crisis.
She had already said;
If you increase what you give to some people then presumably you have to reduce it for others. We are not in an environment where there is more money around. It is a difficult thing to achieve.
Nobody should be under any illusions that they are going to be able to live a life on benefits under a Labour government. If you can work you should be working, and under our compulsory jobs guarantee if you refuse that job you forgo your benefits, and that is really important.
It is not an either/or question. We would be tougher [than the Conservatives]. If they don't take it [the offer of a job] they will forfeit their benefit.
So, fairer might not be what you hoped for. There will be compulsion, and there will be those who are worse off after reform of the welfare system, if Ms Reeves is to be believed.

There will also be additional costs to the public sector arising from the insistence that those bidding for government contracts pay the living wage to their employees - although, in fairness, that may well be mitigated by a fall in the amount of benefits paid out to bolster low wages and an increase in tax revenues.

And, of course, the OBR forecasts include the expectation that departmental budgets will be cut further - the expectations for local government and the NHS are already looking gloomy at best - so an incoming Labour Chancellor will need to wave an axe with more enthusiasm than his supporters might think seemly.

So, not much to look forward to for the next five years, is my prediction. And yes, the books may be balanced, but we're all going to have to accept that we'll experience more austerity, and have to take rather more responsibility for what goes on around us. And that goes for politicians and voters alike...

1 comment:

Matt (bristol) said...


But thankyou.