Labour rejects claims it would outspend the Tories as "total rubbish"

A source tells the NS that the party has not decided whether to match Osborne's post-2015 spending limits and says it would be "irresponsible" to do otherwise.

Back in 1997, in a bid to assure the electorate of its economic credibility, Labour famously pledged to stick to the Tories' public spending limits for the first two years of the new parliament. The move meant public services were initially drained of resources (the plans were described by then-chancellor Ken Clarke as "eye-wateringly tight") but history has recorded it as a political success. 

As he seeks to burnish his own economic credentials, some in Labour have been urging Ed Miliband to repeat this trick and sign up to the coalition's post-2015 spending plans (a subject I explored in the NS back in January). Such a move, so the theory goes, would repel the Tories' "deficit denier" attacks and convince voters that the party can be trusted with the nation's purse strings again. 

To date, it is an option that Miliband and Ed Balls have notably refused to rule out. As chief economic adviser to Gordon Brown, Balls helped mastermind the original 1997 pledge and has already declared that his "starting point" is that Labour will "have to keep all these cuts", a step towards accepting Osborne’s baseline. When Harriet Harman told the Spectator in September that Labour would not match the Tories’ spending plans and abandon its "fundamental economic critique" of the coalition, she was forced to issue a retraction.

But today's Independent reports that there is now a "growing consensus" in the shadow cabinet in favour of rejecting Osborne's spending limits and outlining an alternative strategy. Instead of promising to match the Tories' planned pace of deficit reduction, the paper says the party will pledge to invest in priority areas such as housing. It's important to point out that this doesn't mean Labour won't impose cuts elsewhere, rather it means splitting the burden more equally between cuts and tax rises and reducing borrowing (which, owing to the failure of Osborne's plan, is forecast to be £108bn in 2014-15) at a rate the economy can bear. 

Unsurprisingly, the Conservatives have leapt gleefully on the story, with the Tory Treasury Twitter account declaring, "we now know that Labour will go into the election with a plan to borrow and spend more, putting up the deficit". George Osborne, who remains the Conservatives' chief electoral strategist, has long hoped to run his own version of the party's successful 1992 campaign, which accused Labour of planning a "tax bombshell" after Neil Kinnock and John Smith chose not to match John Major's spending plans. But could the Tories' joy could be premature? A Labour source described the Independent story to me as "total rubbish", adding:

They've taken some Fabian Society report out next week which says Labour should not match Tory spending plans post 2015 and spun it as the view of the leadership. As we've always said, we will not make our tax and spending commitments till the time of the election. It would be irresponsible to do otherwise, who knows where the economy and public finances will be in two months' time, let alone two years.

As in 1997, Labour is likely to wait until just a few months before the general election before announcing its decision. Balls and Miliband have learned from the mistakes of the Tories, who promised to match Labour's spending plans in 2007 only to abandon this pledge after the crash in 2008.

But the question remains: has Labour genuinely not made up its mind or has it merely chosen not to tell us yet? My guess is the former but it's likely that Miliband, a leader who thrives on defying conventional wisdom, is minded to reject Osborne's spending limits. A pledge to do otherwise (a trick straight out of the New Labour playbook) would run entirely counter to the post-Blairite spirit of his leadership. Embracing Tory levels of austerity would also deny the economy the stimulus it will badly need and split the left. The challenge facing Labour is finding a means of rejecting Osborne's plans while simultaneously convicing the electorate that it can be trusted not to "crash the car" again. 

Update: Ed Balls was on LBC radio this morning (a slot dubbed "Balls Calls") and described the Independent report as "simply wrong". He said: 

It is an exclusive but it is wrong I’m afraid Nick and you know, it is a report of a Fabian Society commission which comes out next week. The Fabian Society is a research society, it has been there for 100 years, affiliated with the Labour Party, they are coming up with some conclusions about spending. It is not Labour Party policy. It is not something that I’ve even discussed…

Balls added that it would be "totally irresponsible" for him "to come along on here or the Independent and tell you our tax and spending plans two years before the election".  

Again, however, it is notable that Balls has not ruled out promising to outspend the Tories. He has merely restated that Labour will not publicly announce its decision until closer to the election. As I wrote above, it is plausible that in private Labour takes the view that it should reject Osborne's spending limits. 

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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As the strangers approach the bed, I wonder if this could be a moment of great gentleness

I don’t know what to do. In my old T-shirt and M&S pants, I don’t know what to do.

It’s 1.13am on an autumn morning some time towards the end of the 20th century and I’m awake in a vast hotel bed in a small town in the east of England. The mysterious east, with its horizons that seem to stretch further than they should be allowed to stretch by law. I can’t sleep. My asthma is bad and I’m wheezing. The clock I bought for £3 many years earlier ticks my life away with its long, slow music. The street light outside makes the room glow and shimmer.

I can hear footsteps coming down the corridor – some returning drunks, I guess, wrecked on the reef of a night on the town. I gaze at the ceiling, waiting for the footsteps to pass.

They don’t pass. They stop outside my door. I can hear whispering and suppressed laughter. My clock ticks. I hear a key card being presented, then withdrawn. The door opens slowly, creaking like a door on a Radio 4 play might. The whispering susurrates like leaves on a tree.

It’s an odd intrusion, this, as though somebody is clambering into your shirt, taking their time. A hotel room is your space, your personal kingdom. I’ve thrown my socks on the floor and my toothbrush is almost bald in the bathroom even though there’s a new one in my bag because I thought I would be alone in my intimacy.

Two figures enter. A man and a woman make their way towards the bed. In the half-dark, I can recognise the man as the one who checked me in earlier. He says, “It’s all right, there’s nobody in here,” and the woman laughs like he has just told her a joke.

This is a moment. I feel like I’m in a film. It’s not like being burgled because this isn’t my house and I’m sure they don’t mean me any harm. In fact, they mean each other the opposite.

Surely they can hear my clock dripping seconds? Surely they can hear me wheezing?

They approach, closer and closer, towards the bed. The room isn’t huge but it seems to be taking them ages to cross it. I don’t know what to do. In my old T-shirt and M&S pants, I don’t know what to do. I should speak. I should say with authority, “Hey! What do you think you’re doing?” But I don’t.

I could just lie here, as still as a book, and let them get in. It could be a moment of great gentleness, a moment between strangers. I would be like a chubby, wheezing Yorkshire pillow between them. I could be a metaphor for something timeless and unspoken.

They get closer. The woman reaches her hand across the bed and she touches the man’s hand in a gesture of tenderness so fragile that it almost makes me sob.

I sit up and shout, “Bugger off!” and they turn and run, almost knocking my clock from the bedside table. The door crashes shut shakily and the room seems to reverberate.

This article first appeared in the 12 January 2017 issue of the New Statesman, Putin's revenge