Miliband admits Labour would borrow more - now he needs to make the argument

The Labour leader should explain why borrowing for growth is the economically responsible course.

After his disastrous appearance on The World At One yesterday, it was a more relaxed Ed Miliband who took to the Daybreak sofa this morning. Asked about the ill-fated interview by presenter Lorraine Kelly and his refusal to say whether Labour would borrow more in the short term, he replied: 

Look, that happens. You do interviews; some interviews well, some interviews not so well. Look, I was asked a question about VAT and Labour's plans to cut VAT. I am clear about this, a temporary cut in VAT, as we are proposing, would lead to a temporary rise in borrowing. The point I was making yesterday was that if you can get growth going by cutting VAT, then over time you will see actually borrowing fall - that was the point I was making yesterday and it's good to be able to make it today. 

Although Miliband made it sound otherwise, the admission was a significant one. Labour's "five point-plan for jobs and growth" has always rested on the assumption that the party would borrow more in the short-term. Were it do otherwise, and fund measures such as a VAT cut through spending cuts or tax rises elsewhere, the effectiveness of any stimulus would be dramatically reduced. Yet until now, Miliband has refused to concede as much. 

Now he has finally done so, the task for Labour is to persuade the public that borrowing for growth, at a time of stagnation and rising unemployment, is the right (and responsible) thing to do. Today's ComRes poll for the Independent, showing that 58 per cent of the public believe that the government's economic plan has failed and that it will be "time for a change" in 2015 is a reminder of the appetite for an alternative. 

The difficulty for Labour is that the Tories' argument that "you can't borrow more to borrow less" has a seductive appeal. But as anyone who has ever taken out a mortgage or founded a company knows, it's not true. As families struggle to find affordable housing and adequate employment, Labour should make the argument that now is precisely the time for the government to take advantage of record low interest rates and borrow to invest. To the charge that it is burdening future generations with debt, the party should reply: what kind of country will our children inherit if we don't build more homes, create more jobs and protect the services we rely on? When the private sector is unwilling or unable to fulfil these duties, it falls to the state to intervene and act as a spender of last resort. As Nye Bevan once declared, government must never become a mere "public mourner for private economic crimes". 

The failure of Labour to make these arguments since 2010 means it has a significant political deficit to overcome. But if Miliband is to offer a genuine alternative to austerity, he must now resolve to do so. 

Ed Miliband delivers a speech on the high street in the town centre on April 25, 2013 in Worcester. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Are there “tens of thousands” who still don't have their Labour leadership ballot paper?

Word has it that swathes of eligible voters have yet to receive their ballot papers, suggesting there is still all to play for in the Labour leadership contest. But is it true?

Is there still all to play for in the Labour leadership contest?

Some party insiders believe there is, having heard whispers following the bank holiday weekend that “tens of thousands” of eligible voters have yet to receive their ballot papers.

The voting process closes next Thursday (10 September), and today (1 September) is the day the Labour party suggests you get in touch if you haven’t yet been given a chance to vote.

The impression here is that most people allowed to vote – members, registered supporters, and affiliated supporters – should have received their voting code over email, or their election pack in the post, by now, and that it begins to boil down to individual administrative problems if they’ve received neither by this point.

But many are still reporting that they haven’t yet been given a chance to vote. Even Shabana Mahmood MP, shadow chief secretary to the Treasury, still hasn’t received her voting pack, as she writes on the Staggers, warning us not to assume Jeremy Corbyn will win. What’s more, Mahmood and her team have heard anecdotally that there are still “tens of thousands” who have been approved to vote who have yet to receive their ballot papers.

It’s important to remember that Mahmood is an Yvette Cooper supporter, and is using this figure in her piece to argue that there is still all to play for in the leadership race. Also, “tens of thousands” is sufficiently vague; it doesn’t give away whether or not these mystery ballot-lacking voters would really make a difference in an election in which around half a million will be voting.

But there are others in the party who have heard similar figures.

“I know people who haven’t received [their voting details] either,” one Labour political adviser tells me. “That figure [tens of thousands] is probably accurate, but the party is being far from open with us.”

“That’s the number we’ve heard, as of Friday, the bank holiday, and today – apparently it is still that many,” says another.

A source at Labour HQ does not deny that such a high number of people are still unable to vote. They say it’s difficult to work out the exact figures of ballot papers that have yet to be sent out, but reveal that they are still likely to be, “going out in batches over the next two weeks”.

A Labour press office spokesperson confirms that papers are still being sent out, but does not give me a figure: “The process of sending out ballot papers is still under way, and people can vote online right up to the deadline on September 10th.”

The Electoral Reform Services is the independent body administrating the ballot for Labour. They are more sceptical about the “tens of thousands” figure. “Tens of thousands? Nah,” an official at the organisation tells me.

“The vast majority will have been sent an email allowing them to vote, or a pack in one or two days after that. The idea that as many as tens of thousands haven’t seems a little bit strange,” they add. “There were some last-minute membership applications, and there might be a few late postal votes, or a few individuals late to register. [But] everybody should have definitely been sent an email.”

Considering Labour’s own information to voters suggests today (1 September) is the day to begin worrying if you haven’t received your ballot yet, and the body in charge of sending out the ballots denies the figure, these “tens of thousands” are likely to be wishful thinking on the part of those in the party dreading a Corbyn victory.

Anoosh Chakelian is deputy web editor at the New Statesman.