My fantasy chancellor would announce a new path for fiscal policy

Autumn Statement wishlist.

Thinking ahead to the Autumn Statement, you can imagine a Balls/Cable alternative reality where the chancellor is a social democrat and Keynesian. Or you can consider what gentle nudging of the tiller the present incumbent might plausibly countenance.

The first option is a lot less gloomy.  With the economy and the public finances now totally at sea, my fantasy chancellor will announce a new path for fiscal policy. There would be a short-term stimulus, starting with a cut to employers’ national insurance and a massive public investment programme. Capital spending which guarantees a future revenue stream, such as house-building, would be ignored when it comes to plans for the national debt, meaning the government could promise a million new homes over five years.

There would still need to be very painful fiscal consolidation over the medium-term, but not on George Osborne’s terms. His plans assume that almost all the burden should be borne by spending cuts not tax rises, and his fiscal rules force him to squeeze the deficit faster and deeper than is likely to be needed for long-term sustainability. The result is a plan to permanently shrink the size of the state as a share of GDP.

A centre-left government would declare that its aim was to return public spending to its long-term trend not to ‘overshoot’. That would mean taking a bit longer to cut the deficit and raising more taxes, especially from wealth and land. There would still be very difficult and controversial decisions because even a decade of flat spending would mean many individual cuts. A Fabian Society commission has just launched to consider how the tricky trade-offs could be made.

But what of the real Mr Osborne? His reputation depends on him rejecting almost everything I have said. He knows however the Liberal Democrats will demand he finds more ways to tax high-earners, even if it is simply by adding a few bands to the council tax. He could also accelerate the capitalisation of his two putative public investment banks. On specific spending cuts, he should desist from a fresh assault on his ‘undeserving’ shirkers, for although the focus groups tell him it’s good politics, over time he reinforces the ‘nasty party’ image the Tories must shed to win centre-ground votes. Perhaps, on cuts, Osborne should simply pause and take stock; after all, does he really need to set a budget for April 2015 this week?

Andrew Harrop is the General Secretary of Fabian Society

The government could promise a million new homes over five years. Photograph: Getty Images

Andrew Harrop is general secretary of the Fabian Society.

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I believe only Yvette Cooper has the breadth of support to beat Jeremy Corbyn

All the recent polling suggests Andy Burnham is losing more votes than anyone else to Jeremy Corbyn, says Diana Johnson MP.

Tom Blenkinsop MP on the New Statesman website today says he is giving his second preference to Andy Burnham as he thinks that Andy has the best chance of beating Jeremy.

This is on the basis that if Yvette goes out first all her second preferences will swing behind Andy, whereas if Andy goes out first then his second preferences, due to the broad alliance he has created behind his campaign, will all or largely switch to the other male candidate, Jeremy.

Let's take a deep breath and try and think through what will be the effect of preferential voting in the Labour leadership.

First of all, it is very difficult to know how second preferences will switch. From my telephone canvassing there is some rather interesting voting going on, but I don't accept that Tom’s analysis is correct. I have certainly picked up growing support for Yvette in recent weeks.

In fact you can argue the reverse of Tom’s analysis is true – Andy has moved further away from the centre and, as a result, his pitch to those like Tom who are supporting Liz first is now narrower. As a result, Yvette is more likely to pick up those second preferences.

Stats from the Yvette For Labour team show Yvette picking up the majority of second preferences from all candidates – from the Progress wing supporting Liz to the softer left fans of Jeremy – and Andy's supporters too. Their figures show many undecideds opting for Yvette as their first preference, as well as others choosing to switch their first preference to Yvette from one of the other candidates. It's for this reason I still believe only Yvette has the breadth of support to beat Jeremy and then to go on to win in 2020.

It's interesting that Andy has not been willing to make it clear that second preferences should go to Yvette or Liz. Yvette has been very clear that she would encourage second preferences to be for Andy or Liz.

Having watched Andy on Sky's Murnaghan show this morning, he categorically states that Labour will not get beyond first base with the electorate at a general election if we are not economically credible and that fundamentally Jeremy's economic plans do not add up. So, I am unsure why Andy is so unwilling to be clear on second preferences.

All the recent polling suggests Andy is losing more votes than anyone else to Jeremy. He trails fourth in London – where a huge proportion of our electorate is based.

So I would urge Tom to reflect more widely on who is best placed to provide the strongest opposition to the Tories, appeal to the widest group of voters and reach out to the communities we need to win back. I believe that this has to be Yvette.

The Newsnight focus group a few days ago showed that Yvette is best placed to win back those former Labour voters we will need in 2020.

Labour will pay a massive price if we ignore this.

Diana Johnson is the Labour MP for Hull North.