It’s becoming quite a pattern. The Blairites wait in the wings, biding their time till there’s a slippage in the polls for Labour (caused, bizarrely, this time by Cameron’s Eurozone veto) and then use the opportunity to snipe at the leadership and push their view yet again that Labour should indulge in an orgy of cuts to show it can be just as macho in slashing public expenditure as Osborne. That was always Blair’s way: anticipate what the Tories were going to do , get in there first, and go even further to out-tory the Tories. In other words, just when almost all commentators admit the Osborne strategy has failed and made likely a double-dip slump this year, we should jump on board.
All this last week the Guardian through successive stories from its political correspondents Patrick Wintour and Nicholas Watt have been pushing this line. It’s a determined attempt to bamboozle the leadership into adopting the Tory strategy at just the point when it’s collapsing. Not exactly sensible politics, and the Guardian should be ashamed for allowing itself to be used for this stream of factional stories without seeeking a balance from other views widely held in both the PLP and the wider party.
Whenever there’s a household overdraft or national budget expenditure, there’s always two ways of addressing it, as indeed of course it has to be addressed. Either income can be increased or expenditure can be cut. The former is far preferable if feasible. In this case it is. A jobs and growth strategy would take thousands of people off the dole, so they are no longer dependent on benefits and can instead earn and through income tax, NICs and VAT enhance Treasury revenues, and they would be valuably employed building houses, improving Britain’s creaking infrastructure especially in transport and energy, and laying the foundations for the green economy of the future.
But wouldn’t the bond markets panic at the increased public borrowing? No, because there wouldn’t be any increased borrowing. Keeping a million people on the dole costs £8-10bn a year, and instead for the same sum of money half a million jobs could be created. Also, the Tories are planning to release another £75bn in quantitative easing (i.e. electronically printing money) to the banks, and £10bn of this could much more profitably be diverted to generating jobs for the victims of the bankers’ folly. Or perhaps the rich might jcontribute a bit. According to the Rich List the 1,000 richest persons in the UK increased their wealth in the last 2 years alone by £127bn, enough to pay off the entire budget deficit. I’m sure if we asked nicely, they could spare a dime.