Labour needs an answer to Osborne's charge that it would "borrow more"

If the party wants to attack Osborne on this territory, it needs to explain why and how it would borrow for growth.

The loss of Britain's AAA credit rating was a humiliating moment for George Osborne but as this afternoon's Commons clash with Ed Balls demonstrated, the Chancellor's position is stronger than it first appears. After asking Osborne an urgent question on the downgrade, Balls declared: 

He has gone in a weekend from saying he must stick to his plan to avoid a downgrade, to saying the downgrade is now the reason he must stick to his plan.
It was a neat line but Osborne had little trouble resolving this apparent contradiction. In its explanation of the downgrade, Moody's warned against "reduced political commitment to fiscal consolidation". Citing these words, Osborne said that while there would be no "reduced commitment from this government", Labour's answer to "too much borrowing" is "to add to it". The difference, of course, is that while Labour would borrow for growth (in the form of tax cuts and higher infrastructure spending), the coalition is borrowing to meet the cost of failure (in the form of lower growth and higher long-term unemployment). 
 
The problem for Labour, however, is that Ed Balls and Ed Miliband, aware that voters may not easily accept their distinction between "good" borrowing and "bad" borrowing, are unwilling to make this argument explicitly. Osborne ridiculed their approach as "an economic policy that dares not speak its name". The Chancellor's cause is aided by the fact that more voters continue to blame the last Labour government for the cuts than the coalition. Fearful of giving the impression that they would, in Osborne's words, make "the same mistakes" again, Labour will not openly declare that it too would borrow more (although, as Osborne noted, Ed Balls briefly did on the Today programme on Saturday) .
 
Rather than becoming trapped in a technical debate about the deficit, Labour would be wiser to focus on living standards, but if it wants to continue to attack Osborne on this territory it will need a much better explanation of its own approach. Without explicitly declaring that it would borrow for growth (and explaining why), the party merely reinforces the impression that borrowing is always and everywhere an economic ill. And that only strengthens Osborne's hand. 
Ed Miliband and Ed Balls at the Labour conference in Manchester last year. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Theresa May's "clean Brexit" is hard Brexit with better PR

The Prime Minister's objectives point to the hardest of exits from the European Union. 

Theresa May will outline her approach to Britain’s Brexit deal in a much-hyped speech later today, with a 12-point plan for Brexit.

The headlines: her vow that Britain will not be “half in, half out” and border control will come before our membership of the single market.

And the PM will unveil a new flavour of Brexit: not hard, not soft, but “clean” aka hard but with better PR.

“Britain's clean break from EU” is the i’s splash, “My 12-point plan for Brexit” is the Telegraph’s, “We Will Get Clean Break From EU” cheers the Express, “Theresa’s New Free Britain” roars the Mail, “May: We’ll Go It Alone With CLEAN Brexit” is the Metro’s take. The Guardian goes for the somewhat more subdued “May rules out UK staying in single market” as their splash while the Sun opts for “Great Brexpectations”.

You might, at this point, be grappling with a sense of déjà vu. May’s new approach to the Brexit talks is pretty much what you’d expect from what she’s said since getting the keys to Downing Street, as I wrote back in October. Neither of her stated red lines, on border control or freeing British law from the European Court of Justice, can be met without taking Britain out of the single market aka a hard Brexit in old money.

What is new is the language on the customs union, the only area where May has actually been sparing on detail. The speech will make it clear that after Brexit, Britain will want to strike its own trade deals, which means that either an unlikely exemption will be carved out, or, more likely, that the United Kingdom will be out of the European Union, the single market and the customs union.

(As an aside, another good steer about the customs union can be found in today’s row between Boris Johnson and the other foreign ministers of the EU27. He is under fire for vetoing an EU statement in support of a two-state solution, reputedly to curry favour with Donald Trump. It would be strange if Downing Street was shredding decades of British policy on the Middle East to appease the President-Elect if we weren’t going to leave the customs union in order at the end of it.)

But what really matters isn’t what May says today but what happens around Europe over the next few months. Donald Trump’s attacks on the EU and Nato yesterday will increase the incentive on the part of the EU27 to put securing the political project front-and-centre in the Brexit talks, making a good deal for Britain significantly less likely.

Add that to the unforced errors on the part of the British government, like Amber Rudd’s wheeze to compile lists of foreign workers, and the diplomatic situation is not what you would wish to secure the best Brexit deal, to put it mildly.

Clean Brexit? Nah. It’s going to get messy. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.