June 16, 2009 Leave a comment
Alistair Darling, one half of the duo who quashed city analysts’ predictions on the longevity of financial recession, has clashed with Ed Balls over spending in the health and education departments.
Those independent economists (bless them) referenced in the Telegraph article today have said that whoever wins next election will have to squeeze public spending in order to pay back the 700bn borrowing prgramme.
But 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 highground.
But Balls in the interview was clearly more cautious than some have now made out – like Liam Byrne 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 have they not been backed by the Chancellor’s department?
Does Darling not believe his own part in the claim – now with Paul Krugman agreeing that Labour are the right party to fix the economy, and Jose Manuel Barroso limiting his focus on America, which by his predictions has not seen the worst of the recession yet – that the UK has the best chance of a quick economic recovery in europe?
Or is it something a little deeper; does it have anything to do with the fact that, as shadow schools secretary Michael Gove questioned, Balls is the man Gordon Brown wanted to make chancellor, [and] Alistair Darling [is] the man he was too weak to move?”
Certainly with TUC’s predictions recently that job losses will continue, now in the public sector – previously resisting the pressure by economic downturn – public spending should be bracketed as important as debt relief – since that debt has been largely public sector relief, its time to focus on how to avoid public sector collapse and more economic misery for working families.
And on a more strategic level, cuts in the public sector is where the Tories are at their most vulnerable; George Osborne and Kenneth Clarke have both said that cuts are inevitable, and Andrew Lansley, the shadow health secretary, has said that to commit to Balls’ needs would mean cutting other departments’ budgets by 10 per cent (earning his pseudonym Mr. 10% by Liam Byrne).
The party must stay focused, cut out the deadweight and the weak, work out how to marry financial repair and public spending to curb job losses and economic misery for working families, and show the Tories that cuts will not cut it with the country’s economy.