The Staggers

The New Statesman’s rolling politics blog

David Laws’s defence of spending cuts doesn’t stand up

The former cabinet minister is wrong to argue that the cuts will enable a strong recovery.

By George Eaton Published 18 January 2011 15:20

If the coalition is ever in need of a hagiographer, it need look no further than David Laws. The former chief secretary to the Treasury has penned an embarrassingly uncritical defence of the government's spending cuts for the Guardian.

He declares that 2011 is likely to be the year that "recovery is entrenched". What he fails to mention is that, thanks to the coalition's doctrinaire spending cuts, it will be an anaemic recovery at best, with growth proceeding at a slower pace than in the recoveries of the 1970s, 1980s and 1990s (judging by the Office for Budget Responsibility's own figures).

Elsewhere, Laws credits the decision to begin cutting spending last year with enabling higher-than-expected growth. In fact, the strong growth Britain experienced in 2010 was largely the result of the last Labour government's fiscal stimulus. As the Times's Anatole Kaletsky (£) wrote in October:

The trouble is that monetary and fiscal policies take a long time to work their way through the economy – typically, one to two years. Yesterday's robust growth figures reflect last year's decisions by the Bank and the previous government. They tell us nothing, and indeed may mislead us, about how the new government's fiscal measures will interact with the Bank's monetary policies in the years ahead.

Yet Laws makes no mention of the fiscal stimulus: a policy opposed, after all, by his Conservative allies.

He notes that the "Lib Dem-inspired increase in the personal income-tax allowance will boost the incomes of basic-rate taxpayers", but fails to add that the gains are meagre compared to the losses from the coalition's tax rises and welfare cuts. The decision to raise the income-tax threshold to £7,475 will benefit low-to-middle-income earners by roughly £170 a year.

But, as Gavin Kelly pointed out in a recent piece for the NS, this is not enough to offset the rise in VAT (which will cost each household approximately £520 a year), let alone the far larger tax-credit cuts.

Laws gives the appearance of someone who has never read any of the arguments against his position. His return to government is surely imminent.

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Tags: David Laws Spending Cuts

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15 comments

Wed, 2011-01-19 16:56 — Barny

Why is this guy not in gaol yet, vile fraudster.

Wed, 2011-01-19 17:59 — Hugh Markey (not verified)

This LibDem knows what it's like to be cut off from taxpayers' financial support. He talks from experience. O.K. so he hasn't had to go through the mill of the English legal system; arrest, incarceration, court trial and sentence.
He's kinda had an 'asbo' though and knows what happens to those who breach this civil 'slap-on-the wrist.'
Yes, Tess has no faith in 'asbos' but the voter do!

Honest Guv!

Wed, 2011-01-19 21:37 — Luddite (not verified)

Now Labour is no longer in power, Labour talks about being honest with the electorate and how the cutbacks by the coalition Government will hurt everyone especially those living in the North of England. The plain truth is that the recession has left the incoming Government with little choice but to introduce cutbacks to deal with Labour's appalling deficit, Labour should be honest enough to say that if it had won in May it do would be doing much the same in order to balance the book. Of course the party will never do that because it let the deficit get out of control during it's disastrous 13 years in office.

Tue, 2011-01-18 18:18 — raymond392

Should come as no surprise the Law's article is riddled with errors, he cannot tell if he is living with his boyfriend or his housekeeper but decides in the best interest of the country that he should pass the cost of his living arrangements onto the taxpayer. He is sucking up to the government in the hope that all is forgiven and that they will take him back and put his in charge of the country's finances, it is no wonder that the Liberals have been out of power for so long incompetent, corrupt and liberal with the truth, tuition fees need I go on.

Tue, 2011-01-18 18:25 — Lou (not verified)

I don't understand why, on the evidence of the prosecutions thus far, Laws' expenses claims are not also under Met investigation and headed for court proceedings. Paying rent to your mother, as with Chaytor, or in Law's case your lover is surely the same offence?

Tue, 2011-01-18 18:39 — Douglas Clarke (not verified)

@Lou: In Laws' case, the problem was a conflict of interest; he genuinely was paying money to his lover. In Chaytor's, the problem was outright fraud--documents were forged and lies told in order to claim back the money *for himself*.

Tue, 2011-01-18 18:53 — Graeme (not verified)

Laws lied and claimed more than some others being tried. In my view he is unfit for any role in public life. A squalid little creep.

Tue, 2011-01-18 19:03 — Lou (not verified)

@DouglasClarke,

Thank you. Nevertheless, I still think there's a criminal case for Laws to answer too. He knowingly made false statements when claiming that 40 thousand in rent.

Tue, 2011-01-18 19:05 — Chris Young (not verified)

"Riddled with errors"? This article doesn't pin down a single actual error. By all means argue with Mr Laws' interpretation of the facts, but please don't accuse someone of having got the facts wrong unless you are going to substantiate that claim.

(And a little reminder to previous commenters: the expenses rules changed after Mr Laws embarked on a relationship with his landlord. Had Mr Laws outed himself then and made the relationship public, he could have claimed more in mortgage costs than he did in rent. H

Tue, 2011-01-18 19:19 — matthew fox (not verified)

Laws can spin all he likes, the fact growth was downgraded for 2011 is due to the budget he helped frame.

All he has done is whine since leaving Government, and it's about time he leaves the stage.

Tue, 2011-01-18 20:46 — raymond392

Chris Young@
You are wrong on both points, the facts are the facts and as usual a politician never lets the truth get in the way of some fact's.

The Green Book is quite clear on relationships and accommodation proposals he knew these and decided to benefit his lover by charging the taxpayer for his partner's love nest and he knew he was breaking not only the law but the spirit of the law.

He could have lived elsewhere, he could have lived rent free at his boyfriend's house, yet he choose to charge us for his love nest.

As for claiming a mortgage to save the British taxpayer money altrusim is not in his nature.

Tue, 2011-01-18 21:35 — thinkov

this evil little man should be in jail and not allowed to vote

Wed, 2011-01-19 00:04 — Red Rag

This from a man who broke the record for the shotest time being found fiddling whilst in the cabinet. He is about as trustworthy as Andy Coulson.

http://www.redrag1.blogspot.com/

Wed, 2011-01-19 10:31 — Ona

Laws article was riddled with errors - like not acknowledging people are worse off because of VAT increases. It is no excuse that he could have outed himself and claim the mortgage - housing benefit claimants couldn't argue this. Plus he also stole money from us all for excessive claims on his bills.