How Labour can credibly pledge to outspend the Tories

While restricting current spending, the party should promise to invest the proceeds of growth into future-facing areas like skills, childcare and infrastructure.

Labour must make a fundamental choice; whether to broadly accept George Osborne’s fiscal plans or commit to spending more. Until that decision is made, the question of whether Labour is tacking to the left or hugging tight to the coalition will remain unanswered: 'follow the money', to use the old Watergate maxim.

A Fabian Society commission has spent the last year examining this choice by considering the impact of rolling forward the chancellor’s current plans, as well as asking how much more it might be possible for a future government to spend and what that money might do.

The inquiry concluded that the coalition’s existing plans for 2016 and 2017 would translate into an almost unthinkable decline in public provision. Councils would be able to deliver little more than their statutory social care and refuse collection duties. Some government departments would end up with less than half the budgets they started with in 2010. And a further round of deep social security cuts would be needed, with George Osborne’s proposal to remove benefits from young people only the start.

A future government should do everything it can to avoid making these choices, but it must also remain totally committed to deficit reduction, for both economic and political reasons. That leaves a tight-rope to walk, between fiscal denial and spending cuts which will cause huge harm. Exactly how much more money a future government will be able to spend will depend on how well the economy is doing, because rising GDP feeds through into extra tax revenue. But the Fabian commission concluded that any party wishing to offer a convincing alternative to the coalition should aim to spend £20bn more in 2017 than the government now intends.

This would be enough extra money to avoid the worst of the pain scheduled for after the next election. But an incoming government would still need to make some hard decisions, which could prove very uncomfortable for Labour activists. For example, it would probably be possible to avoid big new cuts, but most departments would see spending frozen or increased by inflation only. The government would also need to find money from social security, so some entitlements would need to be cut unless economic recovery creates unexpected savings. There will almost certainly need to be a debate about 'least bad' benefit cuts, with fresh attention to some of the more marginal pensioner benefits.

Labour won’t win the argument, however, if the fiscal debate is just about spending 'more' or 'less'. The left also needs to set out the positive case for spending, by arguing that the composition of public expenditure must change. Under the coalition, the spending priorities have been healthcare and pensions. Both are very important, but without enough money to go round, the result has been deep cuts to the sort of future-facing spending which brings long term prosperity: skills, childcare, infrastructure, innovation and job creation.

The Fabian commission proposes that in 2016 and 2017, spending on these areas should receive the same special protection as the NHS budget does today. It also argues for a permanent increase to capital spending. With these reforms a future government could show that higher expenditure is the only way to spend on the future without sacrificing the vulnerable, old and sick of today.

Labour will no doubt worry about the political attacks it will face if it is to promise more spending. And it is true that some of the extra money would probably need to come from tax rises, although these can be limited to high income groups. For example the Fabian commission heard that many billions could be saved through reform of pension tax relief, so that rich workers only receive the same public subsidy for each pound they save as everyone else.

But the improving economic outlook also offers some cover for the proponents of higher spending, since projections for tax revenue will soon be revised upwards. The coalition seems likely to commit the money to accelerating deficit reduction or pre-election tax cuts. Labour can promise an alternative; to recycle the 'proceeds of growth' into productive, pro-growth public expenditure. A promise to spend more after 2015 need not be seen just as a shift to the left. It is also a commitment to Britain’s long-term future.

2030 Vision: The final report of the Fabian Society Commission on Future Spending Choices is published today. Read it on the Fabian Society's website here 

Ed Miliband and Ed Balls at the Labour conference in Brighton last month. Photograph: Getty Images.

Andrew Harrop is general secretary of the Fabian Society.

Getty
Show Hide image

The struggles of Huma Abedin

On the behind-the-scenes story of Hillary Clinton’s closest aide.

In a dreary campaign, it was a moment that shone: Hillary Clinton, on the road to the caucus in Iowa, stopping at a Mexican fast-food restaurant to eat and somehow passing unrecognised. Americans of all political persuasions gleefully speculated over what her order – a chicken burrito bowl with guacamole – revealed about her frame of mind, while supporters gloated that the grainy security-camera footage seemed to show Clinton with her wallet out, paying for her own lunch. Here was not the former first lady, senator and secretary of state, known to people all over the world. This was someone’s unassuming grandmother, getting some food with her colleagues.

It might be unheard of for Clinton to go unrecognised but, for the woman next to her at the till, blending into the background is part of the job. Huma Abedin, often referred to as Clinton’s “shadow” by the US media, is now the vice-chair of her presidential campaign. She was Clinton’s deputy chief of staff at the state department and has been a personal aide since the late 1990s.

Abedin first met Clinton in 1996 when she was 19 and an intern at the White House, assigned to the first lady’s office. She was born in Michigan in 1976 to an Indian father and a Pakistani mother. When Abedin was two, they moved from the US to Saudi Arabia. She returned when she was 18 to study at George Washington University in Washington, DC. Her father was an Islamic scholar who specialised in interfaith reconciliation – he died when she was 17 – and her mother is a professor of sociology.

While the role of “political body woman” may once have been a kind of modern maid, there to provide a close physical presence and to juggle the luggage and logistics, this is no longer the case. During almost 20 years at Clinton’s side, Abedin has advised her boss on everything from how to set up a fax machine – “Just pick up the phone and hang it up. And leave it hung up” – to policy on the Middle East. When thousands of Clinton’s emails were made public (because she had used a private, rather than a government, server for official communication), we glimpsed just how close they are. In an email from 2009, Clinton tells her aide: “Just knock on the door to the bedroom if it’s closed.”

Abedin shares something else with Clinton, outside of their professional ties. They are both political wives who have weathered their husbands’ scandals. In what felt like a Lewinsky affair for the digital age, in 2011, Abedin’s congressman husband, Anthony Weiner, resigned from office after it emerged that he had shared pictures of his genitals with strangers on social media. A second similar scandal then destroyed his attempt to be elected mayor of New York in 2013. In an ironic twist, it was Bill Clinton who officiated at Abedin’s and Weiner’s wedding in 2010. At the time, Hillary is reported to have said: “I have one daughter. But if I had a second daughter, it would [be] Huma.” Like her boss, Abedin stood by her husband and now Weiner is a house husband, caring for their four-year-old son, Jordan, while his wife is on the road.

Ellie Foreman-Peck

A documentary filmed during Weiner’s abortive mayoral campaign has just been released in the US. Weiner shows Abedin at her husband’s side, curtailing his more chaotic tendencies, always flawless with her red lipstick in place. Speaking to the New York Observer in 2007, three years before their marriage, Weiner said of his future wife: “This notion that Senator Clinton is a cool customer – I mean, I don’t dispute it, but the coolest customer in that whole operation is Huma . . . In fact, I think there’s some dispute as to whether Huma’s actually human.” In the film, watching her preternatural calm under extraordinary pressure, you can see what he means.

In recent months, Abedin’s role has changed. She is still to be found at Clinton’s side – as the burrito photo showed – but she is gradually taking a more visible role in the organisation overall, as they pivot away from the primaries to focus on the national race. She meets with potential donors and endorsers on Clinton’s behalf and sets strategy. When a running mate is chosen, you can be sure that Abedin will have had her say on who it is. There’s a grim symmetry to the way politics looks in the US now: on one side, the Republican candidate Donald Trump is calling for a ban on Muslims entering the country; on the other, the presumptive Democratic nominee Hillary Clinton relies ever more on her long-time Muslim-American staffer.

Years before Trump, notable Republicans were trying to make unpleasant capital out of Abedin’s background. In 2012, Tea Party supporters alleged that she was linked to the Muslim Brotherhood and its attempt to gain access “to top Obama officials”. In her rare interviews, Abedin has spoken of how hurtful these baseless statements were to her family – her mother still lives in Saudi Arabia. Later, the senator and former Republican presidential candidate John McCain spoke up for her, saying that Abedin represented “what is best about America”.

Whether senior figures in his party would do the same now remains to be seen.

Caroline Crampton is web editor of the New Statesman.

This article first appeared in the 26 May 2016 issue of the New Statesman, The Brexit odd squad