Why Labour has not "surrendered" on public spending

Contrary to what conservatives suggest, Balls hasn't capitulated to Osborne. He supports stimulus now and investment after 2015.

Daniel Finkelstein is the latest fiscal conservative to hail Labour's apparent Damascene conversion to austerity. In today's Times he writes of Ed Balls's alleged "intellectual surrender", "the argument he once boldly made, that deficits don’t matter, has gone". 

Balls's speech last week was a significant moment. Not only did he reaffirm that Labour would have to keep most or all of the coalition's spending cuts, he stated that it would have to make its own (and suggested some too). But Finkelstein is wrong to present this as an epoch-defining capitulation to compare with 1976. 

To begin with, Balls's support for stimulus now remains unwavering. Under the political cover of the IMF, he called for the coalition to bring forward capital spending increases from 2015, "financed by a temporary rise in borrowing", in order to promote growth. Contrary to what Finkelstein suggests (recalling Jim Callaghan's famous words), he still believes that you can "spend your way out of recession". More borrowing, more spending remains the Keynesian remedy  prescribed by Balls. The consistent error of the right has been to equate support for stimulus with support for a larger state. As Balls has always acknowledged, a stimulus is, by definition, temporary. In the words of his hero Keynes, "The boom, not the slump, is the right time for austerity at the Treasury." The true intellectual surrender would be for Labour to endorse Osborne's strategy of piling cuts on cuts, a path it has rightly rejected. 

But Finkelstein also overstates the extent to which Labour has committed itself to austerity after 2015. For Balls, Osborne's spending limits are a "starting point", not a blueprint. With growth of just 1.1 per cent since 2010 (compared to 2.9 per cent in Germany and 4.9 per cent in the US), he has adopted the prudent stance of preparing for the worst. But should growth surprise on the upside, he will be able to raise the baseline.

Nothing in Balls's speech precluded the possibility of Labour spending significantly more once a genuine recovery is underway. After all, the surge in expenditure under the last government (an average annual increase of 3.4 per cent) only came after Gordon Brown had stuck to the Tories' "eye-wateringly tight" spending limits. In the case of capital spending, Balls has already hinted that Labour will pledge to invest more than Osborne. As he said, "And for the future, we need to invest in the homes, transport and infrastructure Britain needs and ensure a recovery made by the many. Of course, here too we will only set our plans for investing in Britain’s future in the light of the economic circumstances at the time, and the needs of economic growth". 

Last week was not an "intellectual surrender"; it was an attempt to give Labour the political cover to be radical. 

George Osborne and Ed Balls attend the State Opening of Parliament on 8 May, 2013 in London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Meet Anne Marie Waters - the Ukip politician too extreme for Nigel Farage

In January 2016, Waters launched Pegida UK with former EDL frontman Steven Yaxley-Lennon (aka Tommy Robinson). 

There are few people in British political life who can be attacked from the left by Nigel Farage. Yet that is where Anne Marie Waters has found herself. And by the end of September she could well be the new leader of Ukip, a party almost synonymous with its beer-swilling, chain-smoking former leader.

Waters’s political journey is a curious one. She started out on the political left, but like Oswald Mosley before her, has since veered dramatically to the right. That, however, is where the similarities end. Waters is Irish, agnostic, a lesbian and a self-proclaimed feminist.

But it is her politics – rather than who she is – that have caused a stir among Ukip’s old guard. Former leader Paul Nuttall has said that her views make him “uncomfortable” while Farage has claimed Ukip is “finished” if, under her leadership, it becomes an anti-Islam party.

In her rhetoric, Waters echoes groups such as the English Defence League (EDL) and Britain First. She has called Islam “evil” and her leadership manifesto claims that the religion has turned Britain into a “fearful and censorious society”. Waters wants the banning of the burqa, the closure of all sharia councils and a temporary freeze on all immigration.

She started life in Dublin before moving to Germany in her teens to work as an au pair. Waters also lived in the Netherlands before returning to Britain to study journalism at Nottingham Trent University, graduating in 2003. She subsequently gained a second degree in law. It was then, she says, that she first learnt about Islam, which she claims treats women “like absolute dirt”. Now 39, Waters is a full-time campaigner who lives in Essex with her two dogs and her partner who is an accountant.

Waters’s first spell of serious activism was with the campaign group One Law for All, a secularist organisation fronted by the Iranian feminist and human rights activist Maryam Namazie. Waters resigned in November 2013 after four years with the organisation. According to Namazie, Waters left due to political disagreements over whether the group should collaborate with members of far-right groups.

In April 2014, Waters founded Sharia Watch UK and, in January 2016, she launched Pegida UK with former EDL frontman Steven Yaxley-Lennon (aka Tommy Robinson). The group was established as a British chapter of the German-based organisation and was set up to counter what it called the “Islamisation of our countries”. By the summer of 2016, it had petered out.

Waters twice stood unsuccessfully to become a Labour parliamentary candidate. Today, she says she could not back Labour due to its “betrayal of women” and “betrayal of the country” over Islam. After joining Ukip in 2014, she first ran for political office in the Lambeth council election, where she finished in ninth place. At the 2015 general election, Waters stood as the party’s candidate in Lewisham East, finishing third with 9.1 per cent of the vote. She was chosen to stand again in the 2016 London Assembly elections but was deselected after her role in Pegida UK became public. Waters was also prevented from standing in Lewisham East at the 2017 general election after Ukip’s then-leader Nuttall publicly intervened.

The current favourite of the 11 candidates standing to succeed Nuttall is deputy leader Peter Whittle, with Waters in second. Some had hoped the party’s top brass would ban her from standing but last week its national executive approved her campaign.

Due to an expected low turnout, the leadership contest is unpredictable. Last November, Nuttall was elected with just 9,622 votes. More than 1,000 new members reportedly joined Ukip in a two-week period earlier this year, prompting fears of far-right entryism.

Mike Hookem MEP has resigned as Ukip’s deputy whip over Waters’ candidacy, saying he would not “turn a blind eye” to extremism. By contrast, chief whip, MEP Stuart Agnew, is a supporter and has likened her to Joan of Arc. Waters is also working closely on her campaign with Jack Buckby, a former BNP activist and one of the few candidates to run against Labour in the by-election for Jo Cox’s former seat of Batley and Spen. Robinson is another backer.

Peculiarly for someone running to be the leader of a party, Waters does not appear to relish public attention. “I’m not a limelight person,” she recently told the Times. “I don’t like being phoned all the time.”

The journalist Jamie Bartlett, who was invited to the initial launch of Pegida UK in Luton in 2015, said of Waters: “She failed to remember the date of the demo. Her head lolled, her words were slurred, and she appeared to almost fall asleep while Tommy [Robinson] was speaking. After 10 minutes it all ground to an uneasy halt.”

In an age when authenticity is everything, it would be a mistake to underestimate yet another unconventional politician. But perhaps British Muslims shouldn’t panic about Anne Marie Waters just yet.

James Bloodworth is editor of Left Foot Forward

This article first appeared in the 17 August 2017 issue of the New Statesman, Trump goes nuclear