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Friday, 1 May 2015

6 Days to go... some thoughts on last nights QT 'debate'

I've been a member of the Labour party since 2010. I'm actively campaigning for my outstanding local candidates in Milton Keynes - Andrew Pakes for MK South and Emily Darlington for MK North. I say that upfront, because (unlike certain members of the QT audience last night) I want my background and motivations to be clear.

All that said, what I'm about to put forward is a fact based argument, not a partisan one.

Because there was a hugely significant moment in the Ed Milliband section of the debate last night, were he was asked the 'gotcha' question that Labour have been dogged by for the last five years. He gave a factually correct reply, and was booed by the audience for it. I feel the need to talk about this because I suspect there are voters out there who broadly support Labour's current message on the economy, and/or dislike the notion of additional welfare cuts without any additional taxation for top end earners, but fundamentally feel that Labour cannot be trusted on the economy, because of what happened under the last Labour administration. And I think that in at least some cases, that distrust stems from a misunderstanding of what happened in 2008, what Labour did before and afterwards, and the Tory policies throughout the period. The Tories and Lib Dems have been happy to perpetuate this misconception because it serves their political agenda, but it is at its heart intellectually dishonest, IMO.

So here's what happened: About 7 minutes into his section (around the 37:50 mark on iPlayer) he was asked the following "...really simple question: Do you accept that when Labour was last in power, it overspent?"

His answer: "No I don't, and I know you may not agree with that..."

The audience response was actually worse than booing. People laughed.

The notion that the current state of the UK economy is a result of Labour's overspending in government (exacerbated by yellow and blue politicians repeating the phrase 'Labour's mess' like a mantra for the last five years, and that stupid note) has become accepted wisdom to such a degree that to disagree with it elicits not just anger but contempt, disbelief. Laughter.

And yet Ed was factually correct. Labour didn't overspend in government.

Here are the facts.

In 2008 there was a global financial banking crisis. Every economy in the developed world was hit by it to a greater or lesser degree. The size of the impact had direct correlation with how much your economy depended upon the financial sector for tax receipts. In the UK and US, that was a lot, so the impact was huge. Canada, with a more balanced economy (that is, one where the financial sector was only part of the tax base, not a huge proportion of it) not so bad (though still no fun at all).

Now, you could argue that Labour allowed too much deregulation of the banks to happen, which is what ultimately led to the crisis. Ed Milliband would agree with you on that. He would say, 'we got it wrong on deregulation' - in fact he has, many times. There is an uncomfortable fact that accompanies that, though - the Tories said repeatedly prior to 2008 that deregulation hadn't gone far enough. So were Labour wrong? Yes. Were the Tories even wronger? Oh, my yes. That really matters when you're comparing the two parties for economic competence, IMO.

(This pattern continues throughout the crisis, actually. The Tories opposed the bailout for Northern Rock, for example. Good luck finding an economist now that thinks that would have been a good move.)

But here's the kicker. The Tory/Lib Dem argument is this - 'yeah, but Labour had spent too much before the crisis, so when it hit we were too over-exposed'. There are two massive problems with this argument. The first is that nobody  actually predicted the crisis, so complaining they were spending too much in the face of a disaster nobody could have or did predict is... Well, it's like saying to somebody after their house burns down due to a freak electrical short 'You really shoulda had enough cash saved up to build a new house'. I mean, okay, but nobody actually lives their life like that, so...

The second, biggest problem with this whole 'overspending' argument is that up until the crash the Tories were pledging to keep to Labour's spending plans.

This is hugely important. This matters. Because it gives the lie to every Tory attack you've ever heard about 'Labour overspending' over the last 6 or 7 years. Because if Labour were spending too much prior to the crash, how come the Tories were pledged to keep spending that much, prior to the crash? 

It was never 'Labour's mess'. The crash would have happened whoever was in charge, because the consensus politics at the time was that deregulation was good. And right up to the crash, the Tories were so in favor of Labour's spending that they pledged to maintain it - so the debt would have been the same, too. 

These are the facts, and if you're worried about voting for Labour because of their perceived 'economic incompetence', please just look at the above facts, and please reconsider.

Because there is a major difference between the two parties on the economy - Labour admit where they went wrong, while the Tories are trying to convince us all that austerity is still the right move - even after 5 years of an almost flat-lining economy, and a decline in living standards for all but the spectacularly wealthy. If re-elected, the Tories may balance the books - by eviscerating funding for our most vulnerable (though their anti-growth austerity measures will likely keep wages depressed and the economy stagnant, as it has for the last five years - so, you know, probably not). Labour will balance the books over a longer period, and in a fairer way, by asking those at the top, who have profited even in the midst of the worst crisis we've seen in more than a generation, to contribute more, and by growing the economy.

Labour won't raise your taxes, unless you are a millionaire (and if you are, bluntly, you can afford it).  The Tories, on the other hand, will cut your working tax credit, child benefit, DLA, housing benefit. They will hurt the working poor and middle class, and they will not ask their wealthy doners to pay one penny more in tax.

You may have other reasons not to vote Labour, and I can respect that. But if doubts about economic competence are what are holding you back, please, please reconsider. Labour are not a danger to the economy. The Tories are.


PS - I am currently ostriching on the whole Scotland Thing, because my ignorance of Scottish politics is almost total, but I will say this: If, come Friday 8th May, Labour and the SNP between them hold enough seats to pass a vote of no confidence, given the overlap between their manifestos in any number of areas, I would be amazed if the SNP would force a second election by voting 'no confidence' on a minority Labour administration. And if a political novice like me can figure that out, so can Ed Milliband. He's saying 'no deal with the SNP' because he knows he won't need one, IMO. Which is not to say I wouldn't rather Labour held onto seats in Scotland, because right now I want Labour to be the biggest party when the dust settles, and losing seats north of the border is counterproductive to that cause. But I know some English Labour voters are getting a little freaked about recent pledges, and the above is addressed to them, primarily. Ed doesn't need a deal with the SNP to keep the Tories out, and given that, saying he won't make one is absolutely the right call, IMO, because it neutralizes the shameful, baseless Tory attack that a vote for Ed is a vote for the end of the union and all that bollocks.

EDIT - PPS - And of course after I write all that, I discover an article from late last year in which no less a figure than Mervyn King, former Bank of England governor makes my point for me, in a far more eloquent way.

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