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Editorial: Labour’s programme is not enough to redress the effect of austerity

DON’T mud wrestle with a pig, you get dirty and the pig likes it.

By the same token it is a reckless politician who — unless they are very sure of their facts — gets into a statistical standoff with the Institute of Fiscal Studies.

But however magisterial the tone deployed by Paul Johnson of the IFS in discussing the spending plans of the two main contenders in this election (and the LibDem also-rans) we have to step back and look at the politics.

Apparently, the Lib Dems are the “most fiscally conservative.” So we can at least award Jo Swinson the consolation prize for consistency. Her manifesto is indeed conservative in key respects.

The IFS argues that both the Tories’ and Labour face problems with their manifesto commitments.

It seems that the Tory manifesto includes elements that are not costed and, if implemented, would breach their spending targets. So sparse in detail is it that it didn’t include costings for things that inevitably will occur.

After their disastrous experiences the last time when Theresa May’s manifesto came apart at the seams, the Conservatives this time round have published a document so devoid of content that it bears examination only by first-year semiotics students decoding the subliminal meaning of the many pictures which fill the spaces between the banalities.

Full marks for the IFS in finding something to say about this threadbare document.

Despite the Tories much-trumpeted adherence to the principles of fiscal responsibility, and their oft-repeated accusations of Labour profligacy, public-sector net debt — as a proportion of the country’s Gross Domestic Product — was down under Labour until it rose from 36 per cent of GDP in 2007/08 to 65 per cent in 2009/10.

That was the cost of the 2008 financial crash and the years of recession and then austerity as the Conservative and LibDem government — and then the Tories governing alone – placed the burden of bailing out the banks on the public while bank balance sheets were bulked up and bankers’ bonuses continued to be paid.

This is relevant because the IFS says that even though Labour is proposing historically unprecedented spending and taxation these are “not in any sense implausible” and the effect would be to place Britain around the West European average. In addition, they are not as redistributive as they might be.

The IFS bloke said Labour’s plans to target companies and the very richest to raise £80 billion in tax revenues is not the way other countries do it.

Labour’s intention is “universalist” with a “remarkably radical” programme of “free university, free prescriptions and free childcare” but even so would only undo about “half of the welfare cuts.”

It is not the job of the Institute of Fiscal Studies to propose radical amendments to Labour’s programme. This august institution operates within the conceptual framework of capitalist consensus and it is precisely this which adds to the credibility of Labour’s approach.

Even though it is radical and ambitious, Labour’s programme is not enough to redress the effect of years of austerity.

Even though it proposes to shift the balance of taxation more on the corporate world of the rich and entitled in ways that the governing elites of Europe have so far avoided it still will not raise enough money to arrive at the European median.

In less than two weeks time we can elect a Labour government that will test-drive a new kind of economic policy which, although ambitious, is not enough to tackle all the problems which austerity has imposed.

We can already see the shape of Labour’s next manifesto.

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