The truth about the cuts/deficit debate, part 77

My economists <em>v</em> George Osborne’s economists . . .

Since David Cameron is going to do a version of "Labour gave us a crazy deficit, it's worse than we thought, we have to cut, cut, cut and everyone in the world backs us" in his big conference speech this afternoon, I thought I'd do a pre-emptive blog post on the two (yes, two!) sides to the deficit reduction argument.

The Chancellor, George Osborne, in perhaps the most disingenuous and immature section of his speech on Monday, deliberately mischaracterised the two sides when he said:

There are two sides to this argument.

On one side, there is the IMF, the OECD, the credit rating agencies, the bond markets, the European Commission, the Confederation of British Industry, the Institute of Directors, the British Chambers of Commerce, the Governor of the Bank of England, most of British business, two of our great historic political parties, one of the Miliband brothers, Tony Blair and the British people.

On the other side is Ed Miliband and the trade union leaders who put him where he is.

No, George, on the other side are:

* Barack Obama

* Ben Bernanke

* Tim Geithner

* Paul Krugman

* Joseph Stiglitz

* George Soros

* Richard Freeman

* Robert Reich

* Brad DeLong

* David Blanchflower

* Martin Wolf

* Samuel Brittan

* Anatole Kaletsky

* Robert Skidelsky

For a longer list of leading economists (including other Nobel prizewinners and ex-members of the Bank of England's Monetary Policy Committee) who back the Ed Miliband/trade union position on slower, less draconian cuts, see this letter in the Financial Times from February this year.

As for invoking the support of the "British people", a recent Populus poll found that only one in five voters — 22 per cent — agreed with the coalition's plan to deal with the deficit by 2015.

Oh, and on a side note, I must point out that Osborne's "backers" include most of the institutions that failed to foresee the financial crash and the recent recession — the Bank of England, the ratings agencies, the IMF, etc. Typical . . .

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

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Tom Watson rouses Labour's conference as he comes out fighting

The party's deputy leader exhilarated delegates with his paean to the Blair and Brown years. 

Tom Watson is down but not out. After Jeremy Corbyn's second landslide victory, and weeks of threats against his position, Labour's deputy leader could have played it safe. Instead, he came out fighting. 

With Corbyn seated directly behind him, he declared: "I don't know why we've been focusing on what was wrong with the Blair and Brown governments for the last six years. But trashing our record is not the way to enhance our brand. We won't win elections like that! And we need to win elections!" As Watson won a standing ovation from the hall and the platform, the Labour leader remained motionless. When a heckler interjected, Watson riposted: "Jeremy, I don't think she got the unity memo." Labour delegates, many of whom hail from the pre-Corbyn era, lapped it up.

Though he warned against another challenge to the leader ("we can't afford to keep doing this"), he offered a starkly different account of the party's past and its future. He reaffirmed Labour's commitment to Nato ("a socialist construct"), with Corbyn left isolated as the platform applauded. The only reference to the leader came when Watson recalled his recent PMQs victory over grammar schools. There were dissenting voices (Watson was heckled as he praised Sadiq Khan for winning an election: "Just like Jeremy Corbyn!"). But one would never have guessed that this was the party which had just re-elected Corbyn. 

There was much more to Watson's speech than this: a fine comic riff on "Saturday's result" (Ed Balls on Strictly), a spirited attack on Theresa May's "ducking and diving; humming and hahing" and a cerebral account of the automation revolution. But it was his paean to Labour history that roused the conference as no other speaker has. 

The party's deputy channelled the spirit of both Hugh Gaitskell ("fight, and fight, and fight again to save the party we love") and his mentor Gordon Brown (emulating his trademark rollcall of New Labour achivements). With his voice cracking, Watson recalled when "from the sunny uplands of increasing prosperity social democratic government started to feel normal to the people of Britain". For Labour, a party that has never been further from power in recent decades, that truly was another age. But for a brief moment, Watson's tubthumper allowed Corbyn's vanquished opponents to relive it. 

George Eaton is political editor of the New Statesman.