Ed Miliband speaks at Senate House on November 13, 2014 in London. Photograph: Getty Images.
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Miliband confronts Labour's deficit problem and opens new dividing line on the state

Labour leader attacks the Conservatives' plan for "a dramatic shrinking of the state and public services" to 1930s levels. 

Ed Miliband's speech at this year's Labour conference is best remembered for his failure to mention the deficit. His amnesia served to magnify a bigger problem: that the party hasn't come close to regaining the economic credibility it lost during the crash.

Despite George Osborne's multiple failures (the deficit is forecast to be £91bn this year, £54bn higher than promised in 2010) the Tories' lead as the best custodians of the public finances has grown, rather than shrunk. Shadow cabinet ministers fear that Labour's inability to win back economic trust is obscuring Miliband's promise of a better tomorrow. As long as voters doubt the party's competence, they won't believe in its ability to raise stagnant living standards. While Labour has bound itself to fiscal rectitude by pledging to eliminate the current account deficit by the end of the next parliament and to reduce the national debt as share of GDP, many have long believed that this message will only gain credence when it is delivered prominently by the leader. 

Miliband's address tomorrow morning in London is aimed at answering these criticisms. Having failed to mention the deficit once in Manchester, he is now devoting a whole speech to the subject - the first time he has done so. He will say: "My speech today is about the deficit. Its place in our priorities, how a Labour government would deal with it, and how we would do so consistent with our values." Miliband will go on to declare that those who think "the deficit simply doesn’t matter to our mission and should not be our concern" are "wrong". He will warn that "unless there is a strategy for dealing with the deficit, it is working people who will end up paying the price of the economic instability that is created. It is also necessary for funding our public services because higher debt interest payments squeeze out money for those services and for investment in the long-term potential of our country. 

"There is no path to growth and prosperity for working people which does not tackle the deficit. What we need is a balanced approach which deals with the deficit - but does so sensibly."

His aim is to convince voters that Labour wll reduce the deficit but will do so in a different and better way than the Tories. Rather than relying on cuts alone, the party will also impose new tax rises on the wealthy and will stimulate growth and wages in order to raise flagging Treasury receipts. The party cites the slump in tax revenues owing to inadequate pay as a vindication of its economic analysis. A Labour strategist told me that reducing the deficit and solving the "cost-of-living crisis" were "not separate projects, but the same project".

The speech will be welcomed by the party's deficit hawks although some will question why such an intervention wasn't made earlier in the parliamentary cycle. Others on the left are likely to complain that by devoting an entire speech to the issue, Miliband is reinforcing George Osborne's frame of choice. 

To underline Labour's commitment to fiscal responsibility, Ed Balls has written to all shadow cabinet ministers warning those responsible for unprotected areas (everything excluding the NHS and international development) that "you should be planning on the basis that your departmental budgets will be cut not only in 2015/16, but each year until we have achieved our promise to balance the books": his grimmest statement yet of the lean times ahead for Whitehall. Balls promises, however, that "We will set out for our manifesto other priority areas of spending which will be protected" (schools are one likely candidate). 

Alive to the danger of appearing to embrace Conservative-style austerity, as Labour sheds left-wing voters to the Greens and the SNP, Miliband will also carve a new dividing line with Osborne. Following the OBR's forecast that public spending will fall to just 35.2 per cent of GDP by 2019-20, the lowest level since the 1930s, he will rule out ever making cuts of this scale. 

In an ironic allusion to his alleged minimalist electoral strategy, he will declare: "There is only one 35 per cent strategy in British politics today: the Tory plan for cutting back the state and spending on services to little more than a third of national income." The Tories' plan to continue cutting even once the deficit has been eliminated has given Labour the opening it needs to accuse them of an ideological drive to shrink the state. One strategist told me that the Conservatives were now in "a dangerous place". 

Miliband will say: "They have finally been exposed by the Autumn Statement for what they really are: not modern compassionate Conservatives at all - but extreme and ideological, committed to a dramatic shrinking of the state and public services, no matter what the consequences."

"They are doing it, not because they have to do it, but because they want to. That is not our programme, that will never be our programme, and I do not believe it is the programme the British people want.

"This is a recipe for public services that will disintegrate and for a permanent cost of living crisis because we won’t be investing in the skills and education people need for good quality jobs, and indeed for sufficient tax revenues. And we know what the result will be: the Tories might be able to deliver the cuts they have promised, but they won’t be able to cut the deficit as they promised."

Miliband will outline the "five principles" that will guide Labour's alternative approach to the deficit: "These are the principles of deficit reduction a Labour government will follow: balancing the current budget, not destroying productive investment; an economic strategy to bring the deficit down, not drive it up; sensible reductions in spending, not slash and burn of our public services; the wealthiest bearing the biggest burden, not everyday people; and fully funded commitments, without additional borrowing, not unfunded tax cuts that put our NHS at risk."

The Tories have long sought to create a narrative of risk around a future Labour government by warning that the opposition would "crash the car again". By warning of the consequences for public services of another Conservative-led government, Miliband aims to construct a centre-left equivalent. The defining passage of his speech tomorrow is his declaration that "We will deal with the deficit but we will never return to the 1930s. We won’t take risks with our public finances. And we won’t take risks either with our public services, our National Health Service." 

The Conservatives' aggressive response to the BBC's coverage of the Autumn Statement revealed the extent to which they fear that the cuts to come could jeopardise their election chances. Osborne and other senior Tories partly blame their failure to win a majority on his "age of austerity" conference speech in 2009, which triggered a poll slump from which they never recovered. Labour was able to win back support as it warned of cuts to tax credits, reductions in child benefit, Sure Start closures and a rise in VAT (all denied by the Tories during the campaign only to be introduced immediately afterwards). By warning of the threat now posed to the NHS and to schools by a return to levels of public spending that existed before the creation of the welfare state in 1945, Miliband is attempting to do the same. It is a powerful frame that he is likely to return to repeatedly before the election (although some will attack it as a repeat of the "good cuts vs. bad cuts" strategy that Gordon Brown felt trapped by in 2010). 

A Labour aide promised that there would be new announcements in the speech tomorrow. Whether they are on protecting public services or on cutting deficit will reveal much about the message that Miliband wants to take priority. 

George Eaton is political editor of the New Statesman.

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The most terrifying thing about Donald Trump's speech? What he didn't say

No politician uses official speeches to put across their most controversial ideas. But Donald Trump's are not hard to find. 

As Donald Trump took the podium on a cold Washington day to deliver his inauguration speech, the world held its breath. Viewers hunched over televisions or internet streaming services watched Trump mouth “thank you” to the camera, no doubt wondering how he could possibly live up to his deranged late-night Twitter persona. In newsrooms across America, reporters unsure when they might next get access to a president who seems to delight in denying them the right to ask questions got ready to parse his words for any clue as to what was to come. Some, deciding they couldn’t bear to watch, studiously busied themselves with other things.

But when the moment came, Trump’s speech was uncharacteristically professional – at least compared to his previous performances. The fractured, repetitive grammar that marks many of his off-the-cuff statements was missing, and so, too, were most of his most controversial policy ideas.

Trump told the crowd that his presidency would “determine the course of America, and the world, for many, many years to come” before expressing his gratefulness to President Barack Obama and Michelle Obama for their “gracious aid” during the transition. “They have been magnificent," Trump said, before leading applause of thanks from the crowd.

If this opening was innocent enough, however, it all changed in the next breath. The new president moved quickly to the “historic movement”, “the likes of which the world has never seen before”, that elected him President. Following the small-state rhetoric of his campaign, Trump promised to take power from the “establishment” and restore it to the American people. “This moment," he told them, “Is your moment. It belongs to you.”

A good deal of the speech was given over to re-iterating his nationalist positions while also making repeated references to the key issues – “Islamic terrorism” and families – that remain points of commonality within the fractured Republican GOP.

The loss of business to overseas producers was blamed for “destroying our jobs”. “Protection," Trump said, “Will lead to great strength." He promised to end what he called the “American carnage” caused by drugs and crime.

“From this day forward," Trump said, “It’s going to be only America first."

There was plenty in the speech, then, that should worry viewers, particularly if you read Trump’s promises to make America “unstoppable” so it can “win” again in light of his recent tweets about China

But it was the things Trump didn't mention that should worry us most. Trump, we know, doesn’t use official channels to communicate his most troubling ideas. From bizarre television interviews to his upsetting and offensive rallies and, of course, the infamous tweets, the new President is inclined to fling his thoughts into the world as and when he sees fit, not on the occasions when he’s required to address the nation (see, also, his anodyne acceptance speech).

It’s important to remember that Trump’s administration wins when it makes itself seem as innocent as possible. During the speech, I was reminded of my colleague Helen Lewis’ recent thoughts on the “gaslighter-in-chief”, reflecting on Trump’s lying claim that he never mocked a disabled reporter. “Now we can see," she wrote, “A false narrative being built in real time, tweet by tweet."

Saying things that are untrue isn’t the only way of lying – it is also possible to lie by omission.

There has been much discussion as to whether Trump will soften after he becomes president. All the things this speech did not mention were designed to keep us guessing about many of the President’s most controversial promises.

Trump did not mention his proposed ban on Muslims entering the US, nor the wall he insists he will erect between America and Mexico (which he maintains the latter will pay for). He maintained a polite coolness towards the former President and avoiding any discussion of alleged cuts to anti-domestic violence programs and abortion regulations. Why? Trump wanted to leave viewers unsure as to whether he actually intends to carry through on his election rhetoric.

To understand what Trump is capable of, therefore, it is best not to look to his speeches on a global stage, but to the promises he makes to his allies. So when the President’s personal website still insists he will build a wall, end catch-and-release, suspend immigration from “terror-prone regions” “where adequate screening cannot occur”; when, despite saying he understands only 3 per cent of Planned Parenthood services relate to abortion and that “millions” of women are helped by their cancer screening, he plans to defund Planned Parenthood; when the president says he will remove gun-free zones around schools “on his first day” - believe him.  

Stephanie Boland is digital assistant at the New Statesman. She tweets at @stephanieboland