Chris Leslie’s speech today is intended to show that Labour is very fiscally responsible. It’s a noble task, and one the party knows it needs to hammer away at as much as it does on the cost-of-living, otherwise voters may not see that Labour is the trustworthy solution to the problem the party is highlighting. That said, the meat of this speech is very technical, and given it was delivered to the Institute of Chartered Accountants, perhaps not quite aimed at swing voters.

Leslie is shouldering a big burden here, because the main thrust of his speech is that his party could not get elected in 2015 and promise unicorns and rainbows: it cannot reverse the Coalition’s cuts because it cannot afford to do so (neither financially nor politically). He said:

‘I’m not heading into this expecting popularity. Quite the opposite. All government departments in the next Labour Government will have to face fundamental questions as never before. We won’t be able to undo the cuts that have been felt in recent years. And I know that this will be disappointing for many people. A more limited pot of money will have to be spent on a smaller number of priorities. Lower priorities will get less.’

The solutions Leslie suggests, though, while being very noble, are going to cost the next government more money initially before it finds long-term savings. He suggests ‘greater effort than the Work Programme can muster, ‘greater health service emphasis on preventing illness’, strengthening the minimum wage and incentivising the living wage and ‘getting more affordable homes built’. The last doesn’t take up as much government money these days, as ‘affordable’ housing takes in very little direct subsidy to be built, with finance from the private sector and higher rents, at 80 per cent of market rent rather than 50 per cent as in traditional ‘social’ housing.

All well and good for a speech about long-termism at the Treasury, but Labour does need to talk about upfront savings too, as it will need to plug the scary black hole that the IFS is always warning politicians about but that they’d prefer not to mention too much in the run-up to 2015.

P.S. Leslie is also a little bit naughty in this speech. He says ‘Ed Balls and I have concluded that a Labour Treasury will put an end to the one-year spending reviews recently introduced by George Osborne’. He suggests that these one-year reviews are now the new thing, although of course they were only introduced because of coalition dynamics for the end of this fixed-term parliament.

Tags: Chris Leslie, Coalition, cost-of-living crisis, George Osborne, Treasury