Saturday, 14 January 2012

Weekly Political Round-Up: Labour Attempt to Win Back Their Economic Credibility

Ed Balls caused a mini-twitter storm today by revealing what many people think was the plain obvious; that he could not and would not commit to reversing coalition tax rises or spending cuts because it is difficult to predict how bad "things will be on growth, jobs and the deficit".

In a speech to the Fabian society at their new year conference, the Shadow Chancellor attempted to begin the fight by Labour to set out their plans to cut the deficit and regain their economic credibility.  The party has consistently argued that the coalition's economic policies have stifled growth, but in a drive to convince the public that Miliband's team are not in the "pockets of vested interests" he has had to admit that Labour have not been clear where they would enact spending cuts and tax rises and that tough decisions on public sector pay would have to be made.

This seems like a sensible idea.  Many people fear austere spending cuts but recognise that we are living in difficult times; Balls is merely telling them that he also has similar fears and that because we do not know where they economy will be in 2014-2015 it would be political suicide to commit to reversing all of the government's measures.

In fact some could argue that he should have gone further, and stated that if things got any worse with the economy a future Labour government may even have to entertain the prospect of further tax rises and spending cuts.  If the euro-zone crisis continues to intensify and the world economy takes a dive, this is a real possibility.

It's understandable that there will be anger amongst some Labour supporters, with union leaders likely to feel a sense of betrayal.  Bob Crow, the RMT general secretary, accused him of 'lining up with the Tory led coalition on the assault on public pay'.  This was bound to happen.  But if Labour are to once again become a party that independent voters can trust with their money, they are going to have to admit that to achieve the growth that they criticise the coalition of stifling they are also ready and willing to make tough decisions too.

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