Labour Party and Public Spending: The case for reallocation

Another look at what engendered a lot of anti-Ed Balls sentiment, even from inside the Labour ranks, as I put it on a Liberal Conspiracy entry;

“On CiF, and during an interview with Radio 4’s World at One, Balls spelt out his reasons for wanting to go ahead with spending, along with why fighting within the Labour ranks is hurting the party, and giving the Tories a free ticket to political high ground.

But Balls in the interview was clearly more cautious than some have now made out – like Liam Byrne, Chief Secretary to the Treasury, for example, who said

“We are going to decide how the growth in public spending is divided up much closer to the time. Looking into a crystal ball and understanding what the economy looks like in the year of the Olympics, I just don’t think is possible right now.”

Balls boldly stated that the moves on spending, to outdo Tory plans on 10% spending cuts

“will depend upon what happens to the economy and to unemployment and debt interest. But I think that with tough choices we can see real rises in the schools budget and the NHS budget in future years.”

These careful claims are justified, but why has Byrne not understood them? Has he let anything out the bag? And more importantly, why is the Chancellor’s department not backing the plans?”

I stand by my main thesis; that Balls is a cautious pursuer of future public spending, is stridently opposed to the Tories’ staunch commitment to cuts, and in order for the Government to promote the “quality of life” – or the “missing link” as Pete B has put it – spending should begin the minute our finances can allow for it.

What’s more, is that Byrne appeared to want to distance himself from Balls. But Byrne, over the weekend in the Guardian, has said that with a dash of cuts in capital expenditure, power to people, economy boosts, “Public services are the way in which we … open up those new horizons … [for] a more equal Britain”, in order or the Labour Party to be at the centre of the public services debate.

So there was clearly no anger directed at Balls for his optimism – for public services are what Byrne, as well as Brown, consider to be the fighting issue at the next general elections.

But what it could be is that Balls’ talk of “tough choices” – which I have translated as reallocation of money from other departments and/or expenditure – is implying that no new money (scroll down to see Jonathan Freedland for his criticism of this) will be achieved by the party.

Though it doesn’t necessarily imply this at all.

The fact that Balls has been cautious when saying spending “will depend upon what happens to the economy and to unemployment and debt interest,” proves that Balls doesn’t know what is around the corner (and he certainly hasn’t pretended to be looking into any “crystal ball” as Byrne noted). But whether the economy perks up or not, serious considerations should be taken in order to prioritise on sensible spending, aimed at “supporting families and improving services“.

Whether or not we experience spendthrift times in the future, perhaps we the Labour Party could utilise some methods of reallocation – and renegotiate necessity – in places where possible, and without necessarily predicting the worst in the state of the economy.

ID cards today looked to be scrapped by the always ID-sceptic Alan Johnson (and now, since he is Home Secretary, such a move is not as “embarrassing” as this Mail article would have us believe). A Trident U-turn in the pipeline? These examples for a start seem, not only ideologically redundant, but an excess in terms of financial commitment. If reports are to be believed, a hold on these two issues would save £29bn itself.

A re-think on policies and spending that has working families and services – once the heartland of the Labour Party – in mind, is a tactic that can work alongside the creation of real money in the future. It doesn’t have to be one or the other.

And furthermore, Balls’ talk of “tough choices” can be a practical presence to all the good talk Labour are doing to counter the Tories’ real commitment to 10% cuts.