Liam Byrne told The Daily Politics yesterday that Labour would reduce the deficit without raising additional taxation to that which is already planned. Iain Martin describes this pledge as being akin to a chocolate fireguard. He’s right. It’s less realistic than a Jeffrey Archer novel. As Andrew Neil notes, Labour plans to reduce £82bn from the deficit by 2014 with £19bn in tax rises and £38bn in cuts. They bank on economic growth eradicating the remaining £25bn. The government’s optimism for Britain’s economic prospects is touching but scarcely credible on the basis of 0.3 percent growth and the frightening trade deficit.
Andrew Neil observed that Byrne was armed with books of notes and briefings. Byrne intended what he said, laying a subtle trap for a future Tory government – an indication that Labour still expects to be in opposition. He wants the Tories to commit Nick Clegg’s error and say that the deficit can be reduced without further short but painful tax rises. It may cause the Tories immediate discomfort, but they are well advised not to rule tax hikes out: most of us will be in our declining years before planned spending cuts take effect.
On a separate point, the word is that the budget will make pretty grim reading. What does it contain if there are no further tax rises?