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.


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Balls is right (I admit now), Labour in-fighting gives Tories political highground

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.

Fair?

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.