Ed Miliband and Ed Balls at the Labour conference in Brighton last year. Photograph: Getty Images.
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Could flood prevention help Labour make the case for "good borrowing"?

Ed Balls's emphasis on the long-term benefits of investment in flood defences is an example of how the party could challenge the Tory narrative on public spending.

With the flood waters finally receding, the debate about how Britain copes with extreme weather in the long-term (the Met Office has just confirmed that this winter was the wettest since 1910) is beginning. Ed Balls has a notable piece in the Telegraph today committing the next Labour government to increased investment in flood defences (it "must and will be a priority," he writes). Having warned in his 2012 conference speech that "we must decide how we are going to protect our country from rising sea levels and exceptional rainfall", Balls, more than most, can claim to have seen this crisis coming.

In the piece, he makes the case for higher spending on flood protection (which, contrary to David Cameron's claims, was cut by 17 per cent in real-terms in 2010) as part of a wider shift towards long-term preventative spending (which can result in significant savings). He writes:

[T]he damage from the flooding of recent weeks is not only to people's lives and livelihoods, but the financial costs are expected to be over a billion pounds. Furthermore, the Committee on Climate Change warned last month that investment in flood defences is now £500 million below what's needed and that this risks £3 billion in avoidable flood damage.

How can this make economic sense? Rather than the short-termist salami-slicing of budgets we have seen, we need instead to make long-term decisions now that can save money in the future.

Next month's Budget must begin to set out that action, and I am also clear that investment in flood defences - preventative spending that can save money in the long-run - must and will be a priority for the next Labour government.

Balls is certainly right to argue for the long-term economic benefits of investment (alongside flood prevention, one could cite housing, childcare, transport and skills), which is why he has, crucially, left open the option of borrowing for this purpose, while achieving a current budget surplus.

In a recent Staggers piece, Julian Morgan, the chief economist of Green Alliance, made the case for running a capital deficit to pay for improved flood defences: "As flood defences provide protection for many years to come, it seems wholly appropriate to pay for them gradually with long-term borrowing by issuing 30 or even 50 year gilts, especially when the cost of financing is so low. This would mean that the burden would not only fall on the current generation of taxpayers, but would be spread across the current and future beneficiaries of the flood defences."

The shadow chancellor and his aides state both publicly and privately that no decision will be taken on whether to do so until closer to the election, when the state of the economy is clearer. But few in the party believe it will be possible for Labour to achieve its priorities – a mass housebuilding programme, universal childcare, the integration of health and social care – without doing so. As one shadow cabinet minister recently told me: "We all know that a Labour government would invest more." The question, rather is a tactical one: when and how does Labour make the case for "good borrowing"?

Owing to the Tories' framing of the crash as the result of overspending by the last government, the party starts from a position of weakness. In private, Ed Miliband’s advisers argue that the voters are able to distinguish between borrowing to fund day-to-day spending and borrowing for investment, just as they distinguish between “borrowing to fund the weekly shop” and “borrowing for an asset like a house”. But the Labour leader is not yet prepared to make this case in public. Since an ill-fated interview last year on Radio 4’s The World at One, in which he refused eight times to admit that Labour would borrow more than the Conservatives, Miliband has focused deliberately on market reforms that would not cost government money: freezing energy prices, expanding use of the living wage and restructuring the banking system. When he has made promises that would require new funding, such as the construction of 200,000 homes a year by 2020, the question of borrowing has been deferred.

But sooner rather than later, the party will need to return to it. After the deluge of this winter, flood prevention would be a good place to start.

George Eaton is political editor of the New Statesman.

Photo: Getty
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PMQs review: Jeremy Corbyn prompts Tory outrage as he blames Grenfell Tower fire on austerity

To Conservative cries of "shame on you!", the Labour leader warned that "we all pay a price in public safety" for spending cuts.

A fortnight after the Grenfell Tower fire erupted, the tragedy continues to cast a shadow over British politics. Rather than probing Theresa May on the DUP deal, Jeremy Corbyn asked a series of forensic questions on the incident, in which at least 79 people are confirmed to have died.

In the first PMQs of the new parliament, May revealed that the number of buildings that had failed fire safety tests had risen to 120 (a 100 per cent failure rate) and that the cladding used on Grenfell Tower was "non-compliant" with building regulations (Corbyn had asked whether it was "legal").

After several factual questions, the Labour leader rose to his political argument. To cries of "shame on you!" from Tory MPs, he warned that local authority cuts of 40 per cent meant "we all pay a price in public safety". Corbyn added: “What the tragedy of Grenfell Tower has exposed is the disastrous effects of austerity. The disregard for working-class communities, the terrible consequences of deregulation and cutting corners." Corbyn noted that 11,000 firefighters had been cut and that the public sector pay cap (which Labour has tabled a Queen's Speech amendment against) was hindering recruitment. "This disaster must be a wake-up call," he concluded.

But May, who fared better than many expected, had a ready retort. "The cladding of tower blocks did not start under this government, it did not start under the previous coalition governments, the cladding of tower blocks began under the Blair government," she said. “In 2005 it was a Labour government that introduced the regulatory reform fire safety order which changed the requirements to inspect a building on fire safety from the local fire authority to a 'responsible person'." In this regard, however, Corbyn's lack of frontbench experience is a virtue – no action by the last Labour government can be pinned on him. 

Whether or not the Conservatives accept the link between Grenfell and austerity, their reluctance to defend continued cuts shows an awareness of how politically vulnerable they have become (No10 has announced that the public sector pay cap is under review).

Though Tory MP Philip Davies accused May of having an "aversion" to policies "that might be popular with the public" (he demanded the abolition of the 0.7 per cent foreign aid target), there was little dissent from the backbenches – reflecting the new consensus that the Prime Minister is safe (in the absence of an attractive alternative).

And May, whose jokes sometimes fall painfully flat, was able to accuse Corbyn of saying "one thing to the many and another thing to the few" in reference to his alleged Trident comments to Glastonbury festival founder Michael Eavis. But the Labour leader, no longer looking fearfully over his shoulder, displayed his increased authority today. Though the Conservatives may jeer him, the lingering fear in Tory minds is that they and the country are on divergent paths. 

George Eaton is political editor of the New Statesman.

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