What Osborne is getting wrong

When the Conservatives and their Liberal Democrat partners took office, no one could be in any doubt about what they regarded as their central purpose. "This new coalition is founded", George Osborne said, "on an agreement to significantly accelerate the reduction in the deficit". It was, he proudly pointed out, "the very first item on the first page of the coalition agreement". Much was made of the need to secure Britain's credit rating - and when Standard and Poor's affirmed the UK's triple-A status later in 2010, Osborne proclaimed it a "vote of confidence".

But the Chancellor's attempt to eliminate the deficit in one parliament has failed - because if you cut spending and raise taxes too far and too fast, and don't have people in work and businesses succeeding, you can't get your deficit down, because your tax take falls and your benefit bill goes up.

Last month, Moody's switched its outlook on the UK's triple-A rating to "negative", citing concerns over the impact of rapid fiscal tightening on growth prospects. It's debatable whether we should be setting policy according to the dictates of credit-rating agencies who proved such a poor guide in the run-up to the financial crisis and who were quick to call for austerity measures, the consequences of which they now decry. But it was their verdict Osborne wanted to live or die by.

The longer we languish in low gear, the more permanent damage is done to our productive capacity. Around 860,000 people have been out of work for more than a year now - losing hope, motivation and skills - a huge waste in benefits today and in growth potential for the future.

As we approach next month's budget, Liberal Democrats are trying to regain support by reviving their pre-election arguments about fair taxation. But people will take this with a large pinch of salt, given that the Lib Dems put up VAT within weeks of joining the coalition - and are supporting huge cuts to tax credits for working parents.

It's because we want to see the deficit reduced that we are urging the Chancellor to take measures in the Budget to help hard-pressed families, revive business confidence and get people back into work. Even with growth back on track, Labour's approach to deficit reduction would involve tough decisions on spending, tax and pay. We have to be ready to make those tough choices, because we've seen what happens if they are left to Osborne - measures in his autumn statement took three times more from families than the banks, and we know that he'd rather use any spare cash to abolish Labour's 50p rate on incomes above £150,000, than give a boost to middle- and lower-income households.

The big freeze

Labour would make very different choices - repeating the tax on bank bonuses to fund a youth jobs programme, lowering tuition fees for students instead of lowering corporation tax for banks, and doing more to crack down on tax avoidance. And while we think continued pay restraint in the public sector is necessary to minimise job losses, we would freeze pay at the top so we can offer larger increases to those on lower pay.

Times are tough and constraints are tight but we can choose to ensure the heaviest burdens are borne by those with the broadest shoulders, rather than those already struggling to make ends meet. We can choose to support jobs and growth, to help get the deficit down as well as prevent further long-term damage to the next generation, and our country's ability to pay its way in the world.

Those are Labour's values and priorities - and I believe they are also the values and priorities of the British people.

Rachel Reeves is shadow chief secretary to the Treasury

This article first appeared in the 27 February 2012 issue of the New Statesman, The God Wars

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No, David Cameron’s speech was not “left wing”

Come on, guys.

There is a strange journalistic phenomenon that occurs when a party leader makes a speech. It is a blend of groupthink, relief, utter certainty, and online backslapping. It happened particularly quickly after David Cameron’s speech to Tory party conference today. A few pundits decided that – because he mentioned, like, diversity and social mobility – this was a centre-left speech. A leftwing speech, even. Or at least a clear grab for the liberal centre ground. And so that’s what everyone now believes. The analysis is decided. The commentary is written. Thank God for that.

Really? It’s quite easy, even as one of those nasty, wicked Tories, to mention that you actually don’t much like racism, and point out that you’d quite like poor children to get jobs, without moving onto Labour's "territory". Which normal person is in favour of discriminating against someone on the basis of race, or blocking opportunity on the basis of class? Of course he’s against that. He’s a politician operating in a liberal democracy. And this isn’t Ukip conference.

Looking at the whole package, it was actually quite a rightwing speech. It was a paean to defence – championing drones, protecting Britain from the evils of the world, and getting all excited about “launching the biggest aircraft carriers in our history”.

It was a festival of flagwaving guff about the British “character”, a celebration of shoehorning our history chronologically onto the curriculum, looking towards a “Greater Britain”, asking for more “national pride”. There was even a Bake Off pun.

He also deployed the illiberal device of inculcating a divide-and-rule fear of the “shadow of extremism – hanging over every single one of us”, informing us that children in UK madrassas are having their “heads filled with poison and their hearts filled with hate”, and saying Britain shouldn’t be “overwhelmed” with refugees, before quickly changing the subject to ousting Assad. How unashamedly centrist, of you, Mr Prime Minister.

Benefit cuts and a reduction of tax credits will mean the Prime Minister’s enthusiasm for “equality of opportunity, as opposed to equality of outcome” will be just that – with the outcome pretty bleak for those who end up losing any opportunity that comes with state support. And his excitement about diversity in his cabinet rings a little hollow the day following a tubthumping anti-immigration speech from his Home Secretary.

If this year's Tory conference wins the party votes, it’ll be because of its conservative commitment – not lefty love bombing.

Anoosh Chakelian is deputy web editor at the New Statesman.