Coffee House

What will Ed Miliband do on spending?

21 April 2013

12:35 PM

21 April 2013

12:35 PM

The political mood has shifted these past few weeks. There’s now, as the Sunday papers demonstrate, far more focus on Labour than there was a couple of months back, something which pleases Number 10 which is confident that Labour is ill-equipped to deal with much scrutiny.

Ed Miliband is coming under pressure to be far more specific about what he would do in government. Much of this is being driven by the coalition’s spending review for 2015/16, the results of which will be announced on June 26th.

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If Labour wins the next election, it’ll be in office when these cuts are being implemented. This leads to the question of whether or not Labour will accept these spending plans. Those close to Miliband argue, reasonably enough, that they can’t be expected to say whether or not they’ll sign onto them until they have seen the figures. But his inner circle is dropping heavy hints that Miliband is preparing to reject these plans.

I understand that Miliband doesn’t want everything he says on the economy to be overshadowed by this ‘will they, won’t they’ question. So, he’s inclined to get this announcement out of the way relatively soon after the spending review. This would free Miliband up to make the case for a radical change in the way the economy is run.

As James Kirkup said recently, this clear blue water between the parties on spending is going to be one of the main themes of the 2015 campaign. The Tories will hammer Labour, claiming that they having learnt nothing from the financial crisis and that their only policy is to spend money the country doesn’t have.

The question is, as one senior Labour figure put it to me this week, ‘How much more spending can we argue for when Labour isn’t trusted on spending?’ It is on this question that the election could well turn.

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Show comments
  • evad666

    Its amazing economists still do not study the Universal Laws of Thermodynamics.
    You cannot get something for nothing.

  • telemachus

    Ed Miliband has told his colleagues not to express views on the two young men caught up in the problems in Boston. he wants to understand what drove them to this desperare act before blaming them, and has especially said that muslim should not be mentioned as a cause. in this he shows himself a mature and wise leader.

  • Jebediah

    Labour will keep spending until we are as ruined as Cyprus… It’s what they do. Buy dollars.

    • http://www.facebook.com/profile.php?id=100004981542519 Tom Tom

      Dollars should come in rolls from Andrex

    • the viceroy’s gin

      Remember, Dave’s first budget was within 1% of Darling’s.

      It ain’t just the Millipedes who are bankrupting the next generation, mind.

      • Jebediah

        Not relevant. Though I agree the next election is a least ugly baby contest.

        • the viceroy’s gin

          Why wouldn’t that be relevant? LibLabCon are doing the same thing, and telling the same lies. Why wouldn’t that be relevant?

  • Jupiter
  • HookesLaw

    ‘What will Miliband do on spending’? Presumably he will ask Galloway

  • http://www.facebook.com/profile.php?id=100004981542519 Tom Tom

    This is pointless. There will be no more road by 2015. Did you see the analysis that showed if QE actually worked….Richard Koo of Nomura showed the US would by now have 1600% inflation and the UK 970%. The simple fact that QE is purely to prop up the Banks and nothing more is the reason that we do not have such inflation.

    The funding of Government Debt and Deficits is the symbiosis of the deal with the Banks. The rest of the economy is there to be milked by the Banks and taxed by the Government. There is nothing for Voters to do but amble to the milking stall and be mugged by the Banks.

    There is nothing Miliband will do that is any different. There is no alternative policy from corporatist parties, they are in hock to the same oligopolies. if you want radical policies from Miliband tell him to repeal his Climate Change Act 2008. Instead we get:

    http://www.thejc.com/news/uk-news/24801/ed-miliband-climate-change-can-unite-religions

    • tele_machus

      A radical New Idea this
      Banks are the source of all evil
      Gordon now knows how to handle the Banks
      And he has passed the knowledge to his charismatic heir

      • the viceroy’s gin

        Does that mean the charismatic one knows how to inguce growth and hang himself?

        • tele_machus

          As you well know Ed trumpeted a pristine plan to get us growing last autumn
          Sadly tearful Cameron was not listening

          • Nicholas chuzzlewit

            He was laughing too much.

            • telemachus

              I meant Osbone of course

      • http://www.facebook.com/profile.php?id=100004981542519 Tom Tom

        You are right, Brown kow-tows to Banks and brown-noses their Directors. He was a patsy and Goodwin and Crosby and Vadera took him to the cleaners

        • telemachus

          Then he uniquely among western leaders knew how to handle the crisis and saved us all from a world banking collapse

          • alexsandr

            ha ha ha

    • HookesLaw

      Koo does not conclude as you say.
      He says
      businesses and households have stopped borrowing money even though interest rates have fallen to zero. And with no one borrowing money and many actually paying down debt, the money multiplier has turned negative at the margin – because of the severe damage caused to balance sheets when the bubble collapse drove asset prices lower while leaving debts intact.

      • http://www.facebook.com/profile.php?id=100004981542519 Tom Tom

        The Money Multiplier… and inflation…

        Before Mr. Kuroda was appointed BOJ governor, base money supplied by the Fed under quantitative easing amounted to 16.0x statutory reserves. The corresponding multiples for other central banks were 9.7x for the BOE, 4.8x for the BOJ, and 3.8x for the ECB.
        If the money multiplier were functioning properly, the money supply
        would therefore be 16 times larger than it currently is in the US, 9.7
        times larger in the UK, 4.8 times larger in Japan, and 3.8 times larger
        in the eurozone.

        If such an expansion in money supply actually took place in a short
        time, it would normally entail a similar increase in prices, leading to unprecedented inflation rates of 1,600% in the US, 970% in the UK, and 480% in Japan. The reason why this has not happened will be discussed in detail below.

        In short, however, businesses and households in these economies have stopped borrowing money even though interest rates have fallen to zero. And with no one borrowing money and many actually paying down debt, the money multiplier has turned negative at the margin.

  • allymax bruce

    Ed Miliband is the political ‘Nowhere Man’; Labour are functionally bereft of any policy, counterpoint to Tory policy, and are now desolate in Scotland. Johann Lamont, and her ‘sisters’, are looking more & more like a Scotched Labour impact assessment in comparison to Alex Salmond’s very popular, and excellent SNP Scottish Government.

    Johann Lamont in Inverness;

    Scotched Thatcher; but only in her death!
    Scotched Osborne’s policies; while Osborne derides hers!
    Scotched very good SNP Scottish Government.
    Scotched Westminster austerity; even when it’s all Labour’s fault!
    Scotched Christians, Lions, and God!
    Scotched Scotland’s excellent First Minister, Alex’ Salmond for excellence in office.

    ???????????????????????????

    Scotched Labour; ‘the disabled & wounded’ Party!

    • Abhay

      Mate, you seem very angry? What happened?

      • Austin Barry

        Triple beakers of Scotch.

        • Abhay

          Its quiet in here. Looks like Ally Bruce has stepped out to receive Salmond’s call on his mobile. That’s fine.

  • George_Arseborne

    Milliband must not sign up to Osborne downgraded spending plan because it is the worse plan in the history of this country. Why should he sign up to failure by the way? Milliband should maintain his calm as usual.

    • Abhay

      Perhaps, in politics you should not seek to achieve that much calm. The whole thing about politics is to have ideas, talk about them, act on the ideas and crtique your opponents’ ideas and actions. Adversarial politics are the rhythm of democracy. Where is the place for ‘calm as usual’ in that?

      • the viceroy’s gin

        The place is when your adversary is an idiot like Dave, who is his own political adversary, “a bull who carries around his own china shop”, as was famously said.

        • HookesLaw

          What a thick obsessive you are. As if you know anything about Britain and the Conservative Party.
          The Conservative party is not pursuing nasty racist extreme right loony toon policies . I can understand why you are upset and obsessed in trying to denigrate honest decent Conservatives.

          • the viceroy’s gin

            I respect conservatives.

            But I am denigrating leftists, like you and Dave the Cameroon.

  • Abhay

    I am sorry but this article seems like an exercise in pointlessness. What is the great ‘mood shift’ and ‘focus on labour’ this author is talking about? Did something revolutionary just happen and we all missed it? Are the pillars of statism, lifestyle welfare spending and useless quangos all about to be shaken up?

    • tele_machus

      Certainly the premise is wrong
      The last thing Labour must do is reveal the hand on spending now or in the medium term
      The Coalition are/will hang themselves on the inability to inguce growth

      • the viceroy’s gin

        So they’re gonna hang themselves because they’re unable to “inguce growth”?

        I googled that and came up empty. Is that some sort of new lefty perversion?

        Well, as long as it involves either/both of the Left/Coalition hanging themselves, I’m for it.

        • tele_machus

          Apols-corrected
          But you rightly emphasie the woeful record of Cameron who will lose because of flatlining

  • Colonel Mustard

    I don’t really see a problem for Labour. They will argue that this is about borrowing, not spending and that the Coalition are already borrowing more to support economic policies that at worst are not working and that at best can be characterised as not working. Labour will argue that with the cost of borrowing so low they can borrow to ‘invest’ more and rather than ‘austerity’ the ‘investment’ in ‘big projects’ will promote growth which in turn will increase government revenue. Everybody be happy. Money all round and the big client state can continue to grow. I think I have that just about right but no doubt a Labour Rebuttal agent will be along to spell it out.

    As usual Labour will not be scrutinised or challenged on these proposals in any detail, their word is good enough for most of the meda, and they will in any case be able to back them up with the history of how Gordon had taken us out of recession just before the pesky coalition came in and reel off statistics showing that actually the economy has always done better under a Labour government and any problems now being experienced can be traced back to Margaret Thatcher. New Labour? Not really a Labour government at all – all those faces on the opposition front bench were just unwilling partners in Blair’s aberration. Besides this coalition has no mandate to govern, Labour’s coming home and in 2015 everything will be put back as it should be.

    • allymax bruce

      Col’ Mustard, there’s good news, and bad news for Labour; the good news is, Ed Miliband IS electable by the people, and, he wants to revolutionise his Labour Party. The bad news is, he is fighting his battles on previous Labour Party failings; and these ‘failings’ are mostly emanating from Scotland. Ed MUST let Scotland go independent; or he will miss his chance of revolutionising his Labour party. His ‘electable window’ only lasts until 2016.
      I advised Ed of this last week, and this is the only way he will reign in Westminster. A clear cut from the previous ‘administration, and let the ‘rebelious Scots’ go independent. When Ed lets Scotland go independent, then, and only then, will he be in a better position to form a platform that to fight for ‘Britian’, and he won’t have any ‘discord’ emanating from Scotland neither.

      • Abhay

        Ed cannot thank you enough for your advice. I am hoping you are less angry now.

        • allymax bruce

          I’m not angry at all; it’s your ‘imposition’ to accuse me, is the worrying aspect here!

      • Koakona

        If Scotland was independent Milliband could not win a majority in Westminster. How often we hear this bleating that Scotland is forced to swallow English Conservatism when reality shows it is the rest of the UK being forced to swallow Socialism at the whim of the Scottish.

        • allymax bruce

          You’re looking at this from an ‘outdated’ perspective; it’s Scotland that’s stopping Ed from being elected. Everywhere north of Watford is potentially 60% Labour; but only with the advice I’ve given! Ed must begin anew, and showing he can rule without divide is the first step.

          • Nicholas chuzzlewit

            I am struggling with the maths here. You take way Red’s 40 – 50 Scottish seats and that becomes a massive electoral advantage to him. Is that because lots of people in England say concurrently: “well Red’s in a bit of jam having lost all those Scottish seats, I had better break the habit of a lifetime and vote Labour to help him out”. I know Red is stupid but I think even he might just start taking your advice with a pinch of salt. Even if it is being passed to him in a parallel universe.

            • allymax bruce

              Nich’ Chuzz’, you ‘presume’ Labour would win any seats in Scotland; the political lanscape in Scotland has changed now. Scotland has moved away from Labour because Labour completely disowned us Scots, and did absolutely nothing for the Scots people in the last 50 years! Also, Labour in Scotland are the worst bunch of lying, cheating, parasitic scumbags that ever walked the planet; Scots know this now!
              The truth is, Labour would struggle to win 20 (more like 15), Westminster seats in Scotland now; and that’s not worth Ed having to fight on ‘two-fronts’ !
              Like I said, it’s Scotland that’s holding Ed Miliband back now; Ed MUST let Scotland go independent, or he will lose his chance of winning at Westminster, and his chance to revolutionise Labour; thus, Conservatives in for the next 3 terms!

              • Nicholas chuzzlewit

                Should Labour lose 40 or so seats in Scotland because of independence or the Scots simply stop voting for them is irrelevant. He has still lost 40+ seats in Scotland whereas the Tories have nothing left to lose there. Thus Labour would be at a disadvantage when trying to cobble together enough seats to form a government in Westminster assuming the Tories hang on to their 300+ seats in England. More than happy for Scotland to become independent but you can do so with your own currency (not Sterling) and your own membership of the EU if you are daft enough to want to be members. I think Ed is going to be disappointed because a 6th Form, spendthrift, Marxist is not at the top of our list of characteristics we prize in a PM.

                • allymax bruce

                  Nich’, that’s a good argument, but not an answer; nor reply to my argument.
                  Labour losing 20, (or, 40 seats like it used to be, but will never be again), seats, through Scottish independence, while maintaing Scotland in the Westminster proportionality, (650 seats), has a deleterious effect on Labour at Westminster. For instance, (maintaining Scotland in the Union), Labour winning 20 seats in Scotland, for the 650 ‘house’, (as opposed to Rump UK (RUK), 597), means a disproportionate disadvantage to Labour, and a magnified increase to the Tories!
                  In other words, Scottish Independence means 597 RUK seats available at Westminster; thus Labour are ‘worth’ more without Scotland, because the loss of Labour credibility in Scotland, (down to 20 seats), gives the impetus/advantage to the Conservatives in a 650 seat ‘house’; when 33 Scotch seats are wasted, and the ‘finishing-line’ FPTP, will be further away for Labour. Obviously, the largess of ‘Scotch’ seats would be SNP; completely useless to anyone in Westminster, but, would dilute the ‘worth’ of Labour seats by proportion, (650 to 597), from Scotchland! The Tories know this, and are betting Labour grasp on to those Scotch seats!
                  Labour lose, (proportionately), by trying to maintain, (hold-onto), their ever-decreasing seats in Scotland. Ed Miliband would be doing himself a favour, immediately, by simply letting Scotland go independent tomorrow!
                  I’m right, and you know it !
                  I’m sexy, and I know it !
                  allymax.

              • Wally Wright

                Unfortunately the vast majority of Scots don’t want to go!

                • allymax bruce

                  Wally, sorry for getting back to you so late; that’s some picture mate! Made me laugh.
                  Anyway, it is estimated that approx’ 40% of the Scots polled say they want Scottish Independence. Considering the polls are biased, and use closed-questions in their polling, I say it’s more like 66% say they want Scottish Independence. and that figure will rise nearer to Yes 2014. But we’ll soon see anyway.

          • alexsandr

            cobblers. plenty of tories in rural england, even north of watford. Or mebbe they are all UKIP now. we will see.

        • 2trueblue

          If Scotland goes, then maybe we could get rid of Wales and then the English could be independent. I feel better already.

          • Andy

            We just need to make sure that no Scottish, Welsh or Northern Irish MP can debate or vote on any matter that is devolved, and thus would only effect English seats. That would kill Ed’s majority in Education and Health for a start. And if I was Cameron I would lay a number of Elephant traps like that for Ed – think 50p tax rate.

            • http://www.facebook.com/profile.php?id=100004981542519 Tom Tom

              and how does he get those “elephant traps” into law ? Perhaps he could tack it onto the Gay Marriage Bill ?

            • 2trueblue

              The fact that we were ruled by the Scottich Raj for 13yrs was bad enough. we need to ensure that the English get some democracy. Not a lot to ask.

          • http://www.facebook.com/profile.php?id=100004981542519 Tom Tom

            Yes and if everywhere outside London, Berkshire and Bucks went then Conservatives might stand a chance

            • 2trueblue

              We just need to ensure that the English actually have a democratic situation, right now we do not. The fact is we endure, and have done for 15yrs an undemocratic situation, where by we support the other 2 parts of this island, we have no say in many of their decisions , whilst they can interfere in subjects exclusively English. We simply foot their bills. Added to which we have 78 MEPs representing the UK whilst 15 countries with a combined population similar to ours have over 130 MEPs. Either way we are not represented fairly.

            • Makroon

              Ha-ha, your northern slip is showing !
              There are nine other counties to the south of Berkshire, you know.

        • dalai guevara

          Of course you are right. Why not let London off the hook and declare a city state? At least that would most adequately reflect what in fact divides Britain.

          • http://www.facebook.com/profile.php?id=100004981542519 Tom Tom

            The nation will keep the nukes and have its own Confederation Parliament

            • dalai guevara

              now we are talking

        • allymax bruce

          No; see my reply to Nich’ Chuzz’ below.
          Why can’t yoos English see that we both, England, and Scotland, would be much better off being separate, as two independent Nation-States? We would be an unbeatable geopolitical-partnership, in a formidable currency agreement, and a force-majoure in the EU; strategically we would ‘order’ the geopolitical area between mainland Europe, and the USA. The UK status-quo only hampers both our ‘modernisation’ towards the needs of the geopolitical 21st century.
          Why are yoos English so devoid of critical thinking?

    • tele_machus

      Growth during the so called Golden Years of Thatcher was 2.2%
      Wow might Osborne say
      But Growth under Blair was 2.8%
      This of course allowed the massive expansion of the health service and rebalancing of benefits

      • HookesLaw

        Adding hundreds of billions to the deficit paid for labours spending plans, they were not generated by growth
        Debt in 2001 was 312 billion
        Debt in 2008 was 525 billion
        Take a look at these figures and explain how growth pays off debt?

        • http://www.facebook.com/profile.php?id=100004981542519 Tom Tom

          ONLY Growth can pay off Debt – you need to generate REVENUES

          • Jebediah

            Or you could cut spending to a level lower than revenue. Not rocket science.

            • http://www.facebook.com/profile.php?id=100004981542519 Tom Tom

              If the Private sector is De-Leveraging and The Public Sector cuts then where are you ?

              • Jebediah

                Solvent.

                • http://www.facebook.com/profile.php?id=100004981542519 Tom Tom

                  You haven’t a clue…..you must be Gidiot

                • Jebediah

                  Your astonishing wit does you credit. As does resort to insult.

          • dalai guevara

            indeed Tom, bearing in mind that a decent pint of ale cost £1.70 in 1997, and in 2010 costs £3.40, nothing actually changed in that period. It is simply inflation.
            But then what happened was….

          • hamurana

            Revenue is not created by bureaucrats. Reduce the bureaucracy and increase the real workforce.

        • DeadlyInArms

          So long as ratio of debt to GDP is constant argument is complaints over debt are redundant.

      • http://www.facebook.com/profile.php?id=100004981542519 Tom Tom

        You did not read properly. Average Growth Rate since 2005 was 0.6% but never mind because UK AVERAGE Growth Rate 1955-2012 was 0.6%

        Your figures are total BS……..http://www.guardian.co.uk/news/datablog/2009/nov/25/gdp-uk-1948-growth-economy

      • Fergus Pickering

        Of course there was growth, you fool. It was done by borrowing money. Anyone can do that. And then the money runs out. Just as Liam Byrne said.

        • telemachus

          You know well that we would have been blown off course by Lehman whatever the borrowing or administration
          The IMF tell us austerity is dead and the Coalition should move on

      • http://www.facebook.com/people/David-Julian-Price/653286113 David Julian Price

        Overall Growth from 1980-1990 was 3%, from 1990-2000 it was 2.7%, but from 2000-2010 it was 1%. Even from 1970-1980 we managed around 2%. So Thatcher did well, and so did Major after him. Gordon Brown took over control of spending in 1999 and the rest, as they say, is history…

    • andagain

      Labour will argue that with the cost of borrowing so low they can borrow
      to ‘invest’ more and rather than ‘austerity’ the ‘investment’ in ‘big
      projects’ will promote growth which in turn will increase government
      revenue.

      That would actually be a good argument. As far as it goes, it is probably true. The trouble is that Labour have not been complaining about cuts in government investment. They have been complaining about cuts in benefits, which are certainly not investments.

      People might reasonably conclude that Labour thinks that the government ought to borrow more to finance investment, and that in government it would borrow more to spend on benefits.

  • the viceroy’s gin

    No, the mood hasn’t shifted, no matter how often a Cameroon lickspittle bleats it.

    Yes, the Cameroons are in trouble, and need to shift attention from their failures, but no amount of lickspittle misdirection will do that.

    A short while ago, the lickspittle was all about “the big speech”, and how that media fabricated PR program of misdirection would be changing Cameroonian fortunes drastically. Er, what was that “big speech” all about, anyway? I seem to have forgotten.

    No, misdirection and PR and fawning media lackeys cannot help Dave. He has to help himself, and that he’s spectacularly unequipped to do.

    • tele_machus

      Correct
      He is daily becoming a tragic figure
      Lambasted today for holding his wife’s hand at the funeral

      • Charles

        What exact;y is wrong with holding your wife’s hand at a funeral?

        Provision of solace and comfort is one of the most important aspects of the marital relationship

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