Labour should get behind Balls's VAT cut

The party must not miss a chance to redefine the economic debate.

Ed Balls's bold call for a temporary cut in VAT has not received the support that it deserves. On The Daily Politics earlier today, Alistair Darling refused to endorse the plan and Labour has failed to rebut George Osborne's claim that a temporary reduction to 17.5 per cent would cost £52bn.

The FT, which claims that Balls failed to brief the shadow cabinet on his plan, reports one member as saying: "The problem is that it is playing to our weaknesses and creates the impression that we can't face up to tough decisions."

It's a pity that so many others share this view. Balls's call for a VAT cut was a chance for Labour to redefine the parameters of the economic debate and to regain the initiative from the Tories. As I blogged last week, contrary to Osborne's claim that the measure is "unfunded", there is much evidence that a cut in VAT would pay for itself. Mark Littlewood, the director of the Institute of Economic Affairs and no friend of Balls, agrees with this. He tweeted earlier today: "in the odd position of agreeing with Ed Balls rather than the PM on VAT. 20% is quite possibly on "wrong side" of the Laffer curve." It's exactly these sorts of arguments that ministers need to be making. A temporary VAT cut would boost consumer confidence, lower inflation (thus reducing the risk of a premature rate rise), protect retail jobs and increase real wages, meaning it would likely be self-funding.

History teaches us that tax cuts can change the political weather. It was George Osborne's populist pledge to raise the inheritance tax threshold to £1m that persuaded Gordon Brown not to call an early election. Labour must not miss an opportunity to prove that it, not the Tories, is on the side of consumers.

George Eaton is political editor of the New Statesman.

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Tony Blair won't endorse the Labour leader - Jeremy Corbyn's fans are celebrating

The thrice-elected Prime Minister is no fan of the new Labour leader. 

Labour heavyweights usually support each other - at least in public. But the former Prime Minister Tony Blair couldn't bring himself to do so when asked on Sky News.

He dodged the question of whether the current Labour leader was the best person to lead the country, instead urging voters not to give Theresa May a "blank cheque". 

If this seems shocking, it's worth remembering that Corbyn refused to say whether he would pick "Trotskyism or Blairism" during the Labour leadership campaign. Corbyn was after all behind the Stop the War Coalition, which opposed Blair's decision to join the invasion of Iraq. 

For some Corbyn supporters, it seems that there couldn't be a greater boon than the thrice-elected PM witholding his endorsement in a critical general election. 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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