Andy Silvester is the Campaign Manager at the TaxPayers’ Alliance.
Well, at least he remembered it this time. That’s about as much as can be said for Ed Miliband’s heavily trailed speech on the deficit yesterday morning, as he attempted to set out Labour’s credentials on the economy and attempt to close the gap on the Conservatives when it comes to economic credibility.
Unfortunately, Mr Miliband made the same mistake as many other politicians do; to wit, hoping a speech would make an awkward issue go away (that January 2013 Europe speech sure took the EU off the front pages, right, Prime Minister?).
The Labour leader would cut spending to the point that the current deficit would be eliminated “as soon as possible,” but he wouldn’t cut it down to the level proposed by George Osborne, who is planning to get down to 35 per cent of GDP. Unfortunately, getting spending down to around that level is the direction of travel that we need to move in. He promised to bring the deficit down every year, a worthy goal, but didn’t furnish us with detail about how much he’d bring it down by.
We’ll still “borrow to invest” under a Miliband government – as if borrowing for capital projects is different from borrowing for any other purpose. Perhaps most strikingly, Miliband promised to be very clear about where the cuts would come from. Very clear at some point in the undefined future that is – yet another dodge, duck, dip, dive and dodge from a politician. It’s one we’re becoming all too familiar with.
Miliband did, of course, once again promise he wouldn’t go as far as the Tories who want to bring spending down to 1930s levels. The 1930s, you see, were a time of hunger, unemployment, depression and widespread poverty…
Here, the 1930s saw average economic growth of 3.3 per cent, and if you applied that figure to today’s economy we’d be looking at an economy 6.5 per cent larger than existing forecasts by 2019-20. The nature of our spending has changed dramatically since then, so comparisons to the Road to Wigan Pier are frankly disingenuous, with health and welfare systems of a size and scale that none in the 1930s could ever have envisioned. Furthermore, the Chancellor’s plans wouldn’t take us back to 1930s levels – they’d take us back to where we were in 2008.
The funny thing is that the deficit should actually be fertile ground for the Chancellor’s opponents. He’s missed every deficit target he’s set himself and then, badger-like, has shifted the goalposts. The Autumn Statement last week set out lots of admirable principles about the deficit, but where the next tranche of savings will be found remains worryingly unclear, not least because of the ridiculous insistence on ring-fencing certain budgets.
A couple of weeks back, a “secret” recording of Kwasi Kwarteng at an IEA event revealed that – shock – some politicians think it might be useful to look at ring-fenced health and international aid budgets if we’re going to bring the deficit down. The boss of NHS England reckons the Health Service could save £22 billion through efficiencies, yet instead of asking him to do so politicians of all stripes are queuing up to sign more taxpayer-funded cheques.
If a budget is only ever going to go up, it’s not a budget – it’s a target. There’s no incentive to find savings – and with the Health Service budget now north of £100 billion, we need to find those savings if we’re going to realistically start to pay off the Treasury’s £1.4 trillion credit card bill.
So what are we left with? The Chancellor provided little detail of where he’d find the necessary savings in his Autumn Statement. The Leader of the Opposition, a man who stands a very good chance of inheriting the debt and the deficit, will only tell us what he’ll do to save money once he’s in Government, after he’s “protected” the NHS and other “limited” areas of spending. Nick Clegg is promising to raise taxes, and Nigel Farage’s tax-and-spend policies rarely last a news cycle before being binned.
Politicians don’t give the electorate enough credit, and they’ll see through empty promises and vague commitments. It’s time for a little more honesty, a little more bravery. Politicians may well be pleasantly surprised by the reaction if they were straight with taxpayers.