Ed Balls at the Labour conference in Manchester last year. Photograph: Getty Images.
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We're only cutting spending to 1964 levels - Balls mocks the Tories' new defence

Shadow chancellor says the Conservatives have blundered by admitting day-to-day spending will be reduced to its lowest level for more than 50 years. 

The biggest of the Labour foxes that George Osborne sought to shoot in his Budget was the line that he's taking public spending "back to the 1930s". After last year's Autumn Statement exposed him to this attack (with the state forecast to shrink to just 35.2 per cent of GDP in 2019-20), the Chancellor announced that expenditure would now stand at 36 per cent: merely the lowest level since 1999-2000. As I noted earlier, this was before any of Labour's major spending increases to health, education and other areas, but it's a more comfortable comparison for the Chancellor than The Road To Wigan Pier

But at his usual post-Budget briefing for lobby journalists, Ed Balls (who I recently profiled) highlighted an OBR table which he said showed "spending on day-to-day public services by 2018 falls to its lowest share of GDP since 1938". Midway through Balls's take, the Tory Treasury Twitter account riposted that spending actually falls to its lowest level since 1964

Labour have since pointed out that the Tories have "clearly misread the OBR’s print. The OBR were referring to the 2019 level when making the claim on 1964." 

The relevant passage in the OBR document states

Relative to the size of the economy, nominal government consumption is forecast to fall from 19.7 per cent of GDP in 2014 to 16.1 per cent of GDP by 2019. This is less of a fall than we forecast in December, but would still leave government consumption as a share of GDP equal to its level in 1964 and would be the joint lowest level in consistent National Accounts data going back to 1948. On a quarterly basis, government consumption falls to 15.9 per cent of GDP at the end of 2018. This is marginally above its previous low of 15.8 per cent, again in 1964.

Alerted to the Tories' ripsote by a journalist, Balls immediately spotted a chance to open a new line of attack. "Is that a boast?" he asked incredulously. "What was the David Cameron thing about too many tweets make a .... too many tweets make a Treasury special adviser would be the way I would put it", he quipped, before clarifying (with his past job in mind): "A Tory Treasury special adviser". 

He concluded: "If I was George Osborne I would have said: 'Don't press send'". A Labour aide later told me: "If the Tories want a row about whether this is the lowest level of day-to-day spending on public services for 50 years or 80 years, it’s fine by us." 

And Balls has another new line to deploy: that there is (in the words of the OBR) "a sharp acceleration" in the pace of spending cuts after 2015-16.  As chart 1.3 of the OBR document makes clear, the planned fiscal tightening dwarfs anything seen in this parliament.

For Cameron and Osborne, who have sought to give the impression that most of the pain is over, it is an uncomfortable truth. Expect Balls to raise it repeatedly between now and election day. "I have to say, I thought George Osborne would try and find ways to change things and he's actually left it all the same," he told journalists. "It was extreme yesterday, it's extreme today and it will be extreme tomorrow."

P.S. Here are Labour's calculations, based on data from the House of Commons library, in full. As they show, spending in 2018 falls to 16.068 per cent of GDP, lower than the 16.073 per cent seen in 1964. 

George Eaton is political editor of the New Statesman.

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We still have time to change our minds on Brexit

The British people will soon find they have been misled. 

On the radio on 29 March 2017, another "independence day" for rejoicing Brexiteers, former SNP leader Alex Salmond and former Ukip leader Nigel Farage battled hard over the ramifications of Brexit. Here are two people who could be responsible for the break-up of the United Kingdom. Farage said it was a day we were getting our country back.

Yet let alone getting our country back, we could be losing our country. And what is so frustrating is that not only have we always had our country by being part of the European Union, but we have had the best of both worlds.

It is Philip Hammond who said: “We cannot cherry pick, we cannot have our cake and eat it too”. The irony is that we have had our cake and eaten it, too.

We are not in Schengen, we are not in the euro and we make the laws that affect our daily lives in Westminster – not in Europe – be it our taxes, be it our planning laws, be it business rates, be it tax credits, be it benefits or welfare, be it healthcare. We measure our roads in miles because we choose to and we pour our beer in pints because we choose to. We have not been part of any move towards further integration and an EU super-state, let alone the EU army.

Since the formation of the EU, Britain has had the highest cumulative GDP growth of any country in the EU – 62 per cent, compared with Germany at 35 per cent. We have done well out of being part of the EU. What we have embarked on in the form of Brexit is utter folly.

The triggering of Article 50 now is a self-imposed deadline by the Prime Minister for purely political reasons. She wants to fix the two-year process to end by March 2019 well in time to go into the election in 2020, with the negotiations completed.

There is nothing more or less to this timing. People need to wake up to this. Why else would she trigger Article 50 before the French and German elections, when we know Europe’s attention will be elsewhere?

We are going to waste six months of those two years, all because Prime Minister Theresa May hopes the negotiations are complete before her term comes to an end. I can guarantee that the British people will soon become aware of this plot. The Emperor has no clothes.

Reading through the letter that has been delivered to the EU and listening to the Prime Minister’s statement in Parliament today amounted to reading and listening to pure platitudes and, quite frankly, hot air. It recalls the meaningless phrase, "Brexit means Brexit".

What the letter and the statement very clearly outlined is how complex the negotiations are going to be over the next two years. In fact, they admit that it is unlikely that they are going to be able to conclude negotiations within the two-year period set aside.

That is not the only way in which the British people have been misled. The Conservative party manifesto clearly stated that staying in the single market was a priority. Now the Prime Minister has very clearly stated in her Lancaster House speech, and in Parliament on 29 March that we are not going to be staying in the single market.

Had the British people been told this by the Leave campaign, I can guarantee many people would not have voted to leave.

Had British businesses been consulted, British businesses unanimously – small, medium and large – would have said they appreciate and benefit from the single market, the free movement of goods and services, the movement of people, the three million people from the EU that work in the UK, who we need. We have an unemployment rate of under 5 per cent – what would we do without these 3m people?

Furthermore, this country is one of the leaders in the world in financial services, which benefits from being able to operate freely in the European Union and our businesses benefit from that as a result. We benefit from exporting, tariff-free, to every EU country. That is now in jeopardy as well.

The Prime Minister’s letter to the EU talks with bravado about our demands for a fair negotiation, when we in Britain are in the very weakest position to negotiate. We are just one country up against 27 countries, the European Commission and the European Council and the European Parliament. India, the US and the rest of the world do not want us to leave the European Union.

The Prime Minister’s letter of notice already talks of transitional deals beyond the two years. No country, no business and no economy likes uncertainty for such a prolonged period. This letter not just prolongs but accentuates the uncertainty that the UK is going to face in the coming years.

Britain is one of the three largest recipients of inward investment in the world and our economy depends on inward investment. Since the referendum, the pound has fallen 20 per cent. That is a clear signal from the world, saying, "We do not like this uncertainty and we do not like Brexit."

Though the Prime Minister said there is it no turning back, if we come to our senses we will not leave the EU. Article 50 is revocable. At any time from today we can decide we want to stay on.

That is for the benefit of the British economy, for keeping the United Kingdom "United", and for Europe as a whole – let alone the global economy.

Lord Bilimoria is the founder and chairman of Cobra Beer, Chancellor of the University of Birmingham and the founding Chairman of the UK-India Business Council.