Balls sharpens his axe: where Labour would cut in 2015

Free schools, Police and Crime Commissioners, Titan prisons and army admirals are targeted for cuts.

There were two main aims of Ed Balls's speech on the economy today. The first was to reassure voters that while continuing to support stimulus now, Labour would pursue fiscal responsibility in office. While refusing to play George Osborne's game by saying whether he would stick to the coalition's 2015-16 spending plans ("when we do not know the economic circumstances two months ahead, let alone two years"), he emphasised that, before the election, Labour would adopt its own fiscal rules to eliminate the current deficit and reduce the national debt as share of GDP. Balls also signalled that, with growth finally returning, he would soon abandon his expensive pledge to introduce a temporary VAT cut (which Ed Miliband had such trouble defending in his infamous World At One interview) in favour of long-term capital investment. He said: 

Today, with growth prospects still very uncertain and interest rates too low to be of use, a temporary VAT cut now is still the right prescription before extra capital spending can come on stream – although any immediate tax cut which helps middle and lower income families is better than nothing. 

But over the coming year if, as we all hope, some kind of recovery does take hold, then the balance of advantage will shift from temporary tax cuts to long-term capital investment.

The second aim was to begin the task of forcing the left to accept that not only will Labour be unable to reverse most of the cuts imposed by the coalition, it will have to make its own. As Balls pointedly noted, "The next Labour government will have to plan on the basis of falling departmental spending."

The announcement that Labour would remove the winter fuel allowance from the wealthiest 5 per cent of pensioners is pretty small beer. While Ed Miliband's abandonment of universalism is politically significant (it opens the door to further benefit cuts), the move will save just £100m a year (less than half a per cent of the £207bn welfare bill), meaning that it barely qualifies as a rounding error. But Balls went on to outline, in greater detail than before, other, larger cuts and efficiency savings that a Labour government would seek to make. Since the shadow chancellor wants to give himself maximum flexibility in 2015, they were proposed in the form of questions (as was the winter fuel allowance cut) but, for now, they are the best guide we have to where Balls's axe would fall. Here's my summary:

- Not opening new free schools in areas with excess places. Balls derided "vanity schools projects" and suggested that Labour would not open new free schools in areas with a surplus of secondary school places. ("With primary school places in short supply in many parts of the country, and parents struggling to get their children into a local school, can it really be a priority to open more free schools in 2015 and 2016 in areas with excess secondary school places?")

- Scrapping Police and Crime Commissioners. ("When we are losing thousands of police officers and police staff, how have we ended up spending more on police commissioners than the old police authorities, with more elections currently timetabled for 2016?")

- Cancelling the new 2,000-place "Titan" prison recently proposed by Chris Grayling. ("Has the Ministry of Justice properly made the case for a major new 'Titan' prison, at a time when the prison population is falling?")

- Abolishing High Speed Two Limited, the company developing the new rail network. Balls suggested that this role could be performed more effectively by Network Rail ("Should we be spending millions on a separate company to deliver High Speed 2 when we already have Network Rail, which after all is responsible for rail infrastructure?")

- Cutting the number of army officers and admirals. ("Do we need more admirals than ships and more officers in our forces than our international counterparts at a time when frontline armed forces are under pressure?")

- Merging the four separate government motorist agencies. ("Do we really need four separate government agencies delivering services to motorists?")

- Combining management functions. in government departments, agencies, fire services and police forces. ("Does it really make sense to have separate costly management and bureaucracy for so many separate government departments, agencies, fire services and police forces - the same number as when this Government came into office - all with separate leadership structures and separate specialist teams?")

- Requiring industries to contribute more to the cost of regulation. ("Should industries pay a greater share of the costs of their regulators?")

The aim of these cuts and savings will be to free up funds for Labour's priorities (which Balls promised a "relentless focus" on): employment, housing, childcare, the NHS and social care. Based on his speech today, it is likely that Labour will go into the election promising to spend more than Tories in areas such as infrastructure (borrowing to invest), while giving itself the political cover to do so by adopting new fiscal rules, independently monitored by the OBR, and promising to control welfare spending (Miliband will announce his support for a cap on structural benefits, such as housing benefit, in his speech on welfare on Thursday). The defining political question is whether this will be enough to reassure a sceptical electorate, less than a third of whom believe Labour can be trusted to manage the nation's public finances, that it wouldn't "crash the car" all over again.

Ed Balls emphasised that Labour would have to plan "on the basis of falling departmental spending". Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Labour can be populist and English without copying Donald Trump

There's nothing deplorable about discussing the common interests of the people.

As Labour’s new populism gears up for Copeland and Stoke-on-Trent, it will be tested on voters who are, by a significant measure, more likely to see themselves as English. In the 2011 census, both constituencies scored "English" identity nearly 10 per cent higher than the English average and still 5 per cent higher than England outside of London.

It’s no surprise that both Ukip and the Tories have polled well in these places. In the 2015 general election there was strong correlation between feeling "English", or feeling "more English than British", and voting Ukip and Conservative. Indeed, amongst the "English not British" Ukip took about a third of the votes across England, and the Tories a fifth. Labour lagged below 15 per cent.

Labour’s problems may be getting worse. A recent YouGov poll, commissioned by the Centre for English Identity and Politics at Winchester University, showed "Englishness" gaining at the expense of "Britishness" in the year of Brexit. At the extremes, "English not British" rose by 5 per cent (from 14 per cent to 19 per cent), with ‘British not English’ falling by a similar amount. If past relationships hold, these voters will become harder for Labour to reach.

Although most people in England would favour an English Parliament, or English MPs alone voting on English issues, these have not yet become the political demands of an explicit nationalism as we might find in Wales, Scotland or Catalonia. Indeed, there’s no actual evidence of a direct link between feeling English and the way people vote. It well be that the underlying factors that make someone feel English are also those that incline them, overwhelmingly, to vote Brexit or to support Ukip.

We may identify the drivers of English identity - the declining power of the idea of Britain, the assertiveness of devolution, rapid migration and the EU - but we know little about the idea of England than lies behind these polls. There’s almost certainly more than one: the England of Stoke Central imaginations may not be identical to the Twickenham RFU car park on international day.

One of the most persistent and perceptive observers of alienated working class voters sheds some light on why these voters are turning towards their English roots. According to The Guardian’s John Harris:

"When a lot of people said ‘I’m English’, they often meant something like, ‘I’m not middle class, and I don’t want to be…. I’m also white, and coupled with the fact that I’m working class, I feel that somehow that puts me at the bottom of the heap, not least in the context of immigration. But I am who I am, and I’m not apologising for it.'" People who said "I’m English" seemed to be saying, 'I’m from somewhere' in a ways that politicians and the media did not."

Given Labour’s history in seats where support is ebbing away, it’s reasonable to think that the party’s target must be the voters who Martin Baxter of Electoral Calculus describes as "left-wing nationalists". In this definition, "left-wing" attitudes tend to be be anti-capitalist, hostile to business, generous on benefits, support the welfare state and redistributive taxation. "Nationalist" attitudes are seen as isolationist, against immigration, disliking EU freedom of movement, thinking British means "born here" and that Britons should be put first.

For many in Labour, those nationalist attitudes might bring "a basket of deplorables" to mind.  In recent days both the Corbyn left, and centrist MPs like Alison McGovern and Wes Streeting, have warned against meeting these voters’ concerns. Progressive Labour populists must also calm those fears. But Labour will be doomed as a party of government it it can’t reach these voters (even if it does hang on in the forthcoming by-elections). The obstacles are formidable, but with the right language and framing, Labour may find an appeal that could cut through without alienating the party's more liberal support.

Just acknowledging that England, and the English, exist would be a start. The reaction to Birmingham mayoral candidate Sion Simon’s appeal to England in a campaign tweet simply emphasised how much of Labour prefers to say Britain, even when they mean England. We don’t need a swirl of St George crosses at every event; we just need to use the word in normal everyday conversation. At least we would sound like we live in the same country.

The defiant cry to be recognised and heard should trigger another Labour instinct. The demand that the nation should be run in the common interests of the people runs deep through radical history. Jeremy Corbyn reached for this with his talk of "elites rigging the system". But no ordinary English conversation ever talks about elites. Instead of "mini-me Trumpism", English Labour populism needs careful framing in the language of day-to-day talk. Labour's target should be not be the wealthy per se, but those powerful people whose behaviour undermines the national interest and by doing so undermines the rest of us.

This language of national interest, both conservatively patriotic and politically radical, meets the mood of the moment. The select committee challenges to Amazon, Google, Philip Green and Mike Ashley struck a chord precisely because they revealed something deeply true and unpleasant about this land. We can defend the national interest without invoking a racist response. Why are our railways sold to other governments, and our companies sold abroad for quick profit? Why should it be easier for a foreign gangster to buy a house in Surrey, and hide their ownership overseas, than for an English family to get their own home?

By asking what any change means to the people of England, we might bridge the divide on immigration. If the impact of migration is exacerbated by the pressure on housing and service, let Labour make it clear that the rate of immigration should not exceed the pace we can build homes for those already here, as well as any newcomers. The government must be able to expand services to meet additional needs. If every policy should work in the interests of the people of England, migration which improves our services, creates jobs and grows the economy is to be welcomed. It is hard to see a genuine liberal objection to posing the migration challenge in that way. With the exception of refugees, immigration policy cannot be designed to benefit the migrant more than the resident.

Let the test of every policy be whether it works in the interests of the people of England, or works only for a few. That’s a simple test that would appeal to widely shared values. It could be the foundation of a genuine Labour populism that speaks to England.

 

John Denham was a Labour MP from 1992 to 2015, and a Secretary of State 2007 to 2010. He is Director of the Centre for English Identity and Politics at Winchester University