Clark Greg High Resolution 2Greg Clark is the Financial Secretary to the Treasury and MP for Tunbridge Wells. Most Tuesdays he will be writing this new 'Letter from a Treasury Minister' for ConservativeHome readers. Follow Greg on Twitter.

When I ran the
Conservative Party’s Policy Unit in opposition we had a straightforward task:
to develop the policies that we would implement if we formed the Government
after the forthcoming election.

Yet that no longer
seems to be the way things are done. On Friday, Ed Balls announced a new policy
– a Heath Robinson affair built from bits of an old Gordon Brown-era employment
policy, driven by cash diverted from tax relief on pension contributions. 
The policy itself unravelled within the day, as it turned out to be poor
pensions policy, poor employment policy and funded from money that had already
been spent. But I think that Ed Balls’ botched announcement is worth a closer
look for two fascinating insights that were revealed in the unravelling.

The first is that
the Shadow Chancellor, in his first major economic policy statement of the year,
dropped his standard mantra that the Government’s cuts are going “too far and
too fast”. Moreover, there was no repetition of his usual call for a ‘fiscal
stimulus’.  In the past he has argued strongly that his own plan “means,
in the short term, more borrowing”, yet this time the words he chose to use
were “of course we need spending cuts and tax rises to get the deficit down”. It
will be interesting to discover whether, as Tim
Montgomerie predicted in yesterday’s Times
we are witnessing a French-induced crisis of confidence in Labour’s plans to
borrow more.

The second
revelation came when it was pointed out that the revenue intended to fund the
policy had already been allocated by Labour for another use – raising tax
credits. The Shadow Welfare Secretary Liam Byrne – with the candour for
which he is renowned – suddenly disclosed that the tax credit policy had, in
fact, expired. This is quite an innovation: who knew that the opposition’s policies
come with a sell-by date and are no longer designed to last until the general election?

It is worth
remembering that policy development by opposition parties is funded by the taxpayer.
So far in this Parliament, Labour have received over £1 million for the purpose.
But the rules expressly provide that the policies must be “for inclusion in
manifestos for Parliamentary elections”. 

Yet Balls and Byrne have
ushered in an era of perishable policy: statements that are conceived with no
intention of featuring in a manifesto, but with a short shelf life in the public
eye – and, which, once expired, are withdrawn from consumption.  In other
words, policies designed wholly and entirely for the purposes of opposition,
not government.

If this is to be the
way things are now done, it will be important to understand what the sell-by
date is on each of Labour’s policies, so that it doesn’t come as a surprise to
discover that important measures have been brutally liquidated.  This may give us a clue in the mystery of the
disappearing fiscal stimulus: it is possible – though still not certain – that the
Balls plan may have become a victim of this bracing new approach.

But, if this is the
case, they shouldn’t just drop the policy, but its author too.

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