The Labour campaign bus. Photo: Christopher Furlong/Getty Images
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Leader: Political cross-dressing – how the Tories and Labour are fighting to cover faults

The party manifestos fight hard to cover up perceived weaknesses. Labour don't want to admit they'll borrow to invest; the Tories don't want to explain the welfare cuts.

The perception that Labour cannot be trusted to control the public finances has hardened into received wisdom. This might be unfair – Gordon Brown used to operate with considerable fiscal discipline and preach “prudence with a purpose” in the early years of the New Labour government – and it is largely a consequence of the aftermath of the financial crisis and the effectiveness of George Osborne’s rhetorical assault on Labour’s economic record. But it is a fact.

Distracted by a protracted and bitter leadership contest in 2010, Labour feebly allowed the Tory-led coalition to frame the fundamental economic argument as one of Labour profligacy v Tory competence. Fatuous and alarmist comparisons were made between Britain and Greece (which was trapped within the eurozone and, because it did not have an independent central bank, unable to use monetary policy to mitigate the effects of the downturn). While the Miliband brothers set about fighting each other, the Tories were winning over the British public to the view that Labour was to blame for the debt crisis afflicting the country.

It is this perception that Ed Miliband very belatedly attempted to address with his front-page manifesto promise of “fiscal responsibility”: that each of Labour’s policies would be fully funded and require no additional borrowing and that he would eliminate the deficit by 2020, notwithstanding another recession or economic crisis.

The trouble for Labour is that the public has very little trust in politicians’ promises or “vows”, which is why Nick Clegg is so loathed, why Labour has become so unpopular in Scotland, where the SNP styles itself as an anti-austerity party, and why Tony Blair has never been forgiven for the Iraq war.

Mr Miliband’s mission in politics is to reduce inequality and to use the tax system and structural reforms of the economy to close the gap between the richest and the rest of us. Polling shows that his crackdown on “non-doms” commands widespread public support even if it might not raise much revenue, as does a rise in the minimum wage. Yet it is a sign of Labour’s weakness that it has felt obligated to offset every policy in this vein with tough talk about cutting benefits and the deficit. Mr Miliband knows that his party is vulnerable to caricature as a group of old-school socialists.

By contrast, the Tories have been spraying around unfunded commitments as if they had been subject to a secret takeover by Scandinavians. Individual ministers may struggle to explain where the extra money pledged for the NHS will come from but Mr Osborne’s calculation is that his economic credibility is sufficiently strong that a little wooziness will be forgiven. In the Tory manifesto, however, the party has moved from the arena of unachievable promises to downright regressive ones. Inheritance tax is currently paid by 6 per cent of estates, so raising its upper limit will benefit only the wealthy. And while “Right to Buy” was popular in its first incarnation under Margaret Thatcher, it has had devastating consequences. The social housing stock was never replenished; it created a new rentier class (a third of Right to Buy homes are rented out) and the state now subsidises more working families to rent in the private sector, causing the housing benefit bill to swell. It is to Labour’s credit that it has pledged to tackle this crisis at its source – lack of supply – with a housebuilding programme. There is also a cap on rent increases and a mansion tax, a move towards the asset taxes for which we have long argued. Earned income for low and middle earners is taxed too heavily (as is consumption; VAT is a regressive tax) and unearned income and static assets too little.

If there is a lesson to take from the Tory and Labour manifestos, it is that both are intent on neutralising their perceived weaknesses. Labour will not admit that it would borrow to invest (a necessary flexibility, as all Keynesians would understand) nor set out where serious cuts would be, and the Tories will not explain how they intend to make £12bn of welfare cuts and more – their numbers are so absurd as to be almost beyond discussion. The war of the weak is ending with both parties trying desperately to feign strength.

This article first appeared in the 17 April 2015 issue of the New Statesman, The Election Special

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The 7 brilliant arguments Theresa May once made against Brexit

Just in case you missed them. 

“Just listen to the way a lot of politicians and commentators talk about the public,” the Prime Minister Theresa May told the Conservative party conference in October. “They find your patriotism distasteful, your concerns about immigration parochial, your views about crime illiberal, your attachment to your job security inconvenient.

“They find the fact that more than seventeen million votes decided to leave the European Union simply bewildering.”

Of course, there was a time not that long ago, when May too found the idea of Brexit pretty bewildering herself. Nicknamed “submarine” during the EU referendum campaign for her low-key support for Remain, she nonetheless had made up her mind it was the right thing to do. 

In a recording obtained by The Guardian, she told an audience at Goldman Sachs that “the economic arguments are clear”. She continued: 

“I think being part of a 500m trading bloc is significant for us. I think one of the issues is a lot of people invest here in the UK because it’s the UK in Europe. 

“I think if we were not in Europe, there would be firms and companies who would be looking to say do they need actually to develop a mainland European presence rather than a UK presence.

But if that hasn’t convinced you, luckily May also made a public case for Remain on 25 April 2016. Here are some of her best points:

1. There’s no such thing as total sovereignty

At conference in October, May said Britain was leaving “to become, once more, a fully sovereign and independent country”. 

But in April, she said that “no country or empire in world history has ever been totally sovereign”. Nation states, she said, have to make a trade off between agreeing to cede some sovereignty “in a controlled way” to prevent a greater loss of sovereignty in an uncontrolled way, such as “military conflict or economic decline”. 

2. It's safer to Remain

In her conference speech, May said she wanted a Brexit deal to include “co-operation on law enforcement and counter-terrorism”. 

In April, though, the then-Home secretary thought it would be a lot simpler just to stay in the EU. She predicted that while a Brexit Britain would still share intelligence, “that does not mean we would be as safe as if we remain”.

For example, May helpfully pointed out, a Britain outside the EU would have no access to the European Arrest Warrant, which allowed her department to extradite more than 5,000 people from Britain to Europe in the last five years. 

She also distinguished between the EU’s freedom of movement rules, and border checks, declaring: “Some people say the EU does not make us more secure because it does not allow us to control our border. But that is not true.”

3. Rules are better than no rules

At conference, May said Brexit would mean “our laws made not in Brussels but in Westminster”. Anyone who believed they were a “citizen of the world” was in fact “a citizen of nowhere”. 

Back in April, she had a more nuanced view. She said Europe had “stumbled its way to war in 1914” because of the “ambiguity of nations’ commitments to one another”. 

She declared: “Nobody should want an end to a rules-based international system.” Although, she did add that reconciling these international systems with democratic government was “one of the great challenges of this century”. 

4. It could break up the UK

In her speech at conference, May took aim at the Scottish Nationalist Party when she blamed “divisive nationalists” for threatening to drive the UK apart. 

When she spoke in April, though, it seemed she might be talking about a different set of nationalists. “If Brexit isn’t fatal to the European Union, we might find that it is fatal to the Union with Scotland,” she warned. 

Scots are more likely to be in favour of the EU than voters in England and Wales, she noted: 

“I do not want the people of Scotland to think that English Eurosceptics put their dislike of Brussels ahead of our bond with Edinburgh and Glasgow. I do not want the European Union to cause the destruction of an older and much more precious Union, the Union between England and Scotland.”

5. Brexit endangers Britain’s financial services industry

In her conference speech, May described London as “the world’s leading financial capital”. 

But according to May circa April 2016, it might not be for much longer. She warned that outside the EU: “There would be little we could do to stop discriminatory policies being introduced, and London’s position as the world’s leading financial centre would be in danger.”

6. Negotiating trade deals won’t be easy

May is a believer in free trade – her conference speech was peppered with references to it – and she has appointed Liam Fox as International Trade secretary to broker new deals.

And she knows how hard that will be. In her April speech, she noted Britain would have to replace 36 existing trade agreements with non-EU countries: “While we could certainly negotiate our own trade agreements, there would be no guarantee that they would be on terms as good as we enjoy now.”

7. Nor is staying in the single market

Even in April, May was clear she thought Britain could survive Brexit, but she was not sure whether it would do so better off.

As she put it: 

"The reality is that we do not know on what terms we would win access to the single market.  We do know that in a negotiation we would need to make concessions in order to access it, and those concessions could well be about accepting EU regulations, over which we would have no say, making financial contributions, just as we do now, accepting free movement rules, just as we do now, or quite possibly all three combined.  

"It is not clear why other EU member states would give Britain a better deal than they themselves enjoy."

Couldn't agree more, Prime Minister. 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.