Ed Miliband's latest relaunch avoids policy details and economic credibility

By Matthew Barrett
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Ed Miliband's much-talked-about relaunch speech today (his sixth relaunch, which is Iain Duncan Smith territory and worse than John Major) is, on the face of it, an attempt to square the social democratic principle of redistribution (or "fairness") with the harsh reality of there probably not being much to redistribute after the next general election.

The speech was lacking in specific policies, because Mr Miliband decided to pull his punches:

"In short, where the Government is stripping demand out of the economy, we would go less far and less fast. We call for these things not because we aren’t interested in dealing with the deficit. We call for them because we are. The sooner growth and jobs return the easier it is to reduce the deficit we face. That action to get growth moving must be combined with balanced cuts. And to get Britain’s budget back into balance and the national debt back on a downward path, we will set out tough new fiscal rules. But as I said earlier, the deficit will persist well into the next parliament, well beyond 2015. So today I want to focus on that horizon."

Here we see he has the opportunity to "set out tough new fiscal rules", but then refuses to do so, instead telling us about "the principles which will guide the Labour Party under my leadership" - far safer ground, because it contains no specifics and is subjective. 

In the week of the Autumn Statement, Ed Balls is under attack from business groups, economists, his own party, and the public

By Matthew Barrett
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In the week of George Osborne's Autumn Statement, you might think the Shadow Chancellor, Ed Balls, would be able to score the open goals and publicity that Opposition politicians can usually manage. 

Instead, Ed Balls and his economic plans are under attack from all sides. From the left, the Shadow Cabinet and Labour insiders are trying to set the Labour Party on a different economic course. Economists and business groups continue to support the government and reject Balls' alternative economic plans. The public still blames Labour for the economic crisis. 

Labour blogger Dan Hodges tweeted this morning: "Just spoke to a shadow cabinet member; "Ed Ball's strategy is hurting but it isn't working"." Shortly after that tweet, he added: "The shadow cabinet's concern about Labour's economic stance is about to become a story".

Labour's five-point economic plan would add over £20billion to the deficit

By Matthew Barrett
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In a Parliamentary Question released on Thursday, the official Treasury estimate of the cost of Labour's five-point economic plan was given - it totalled more than £20 billion, which would be added to the budget deficit. 

Michael Meacher, the veteran left-wing Labour MP, asked:

"To ask the Chancellor of the Exchequer pursuant to the contribution by the Chancellor of the Exchequer of 12 October 2011, Official Report, columns 366-82, what evidence he considered in concluding that adoption of the five-point plan would (a) increase the deficit by £27 billion and (b) raise interest rates by one per cent."

Chloe Smith, the recently appointed Economic Secretary to the Treasury, replied to Mr Meacher, listing the Treasury's estimation of the deficit-expanding measures featured in Labour's plans:

• Reducing the rate of VAT for a year "would increase the deficit by around £12.4 billion."
• A temporary reduction in VAT on home improvements would increase the deficit by £2.2bn
• A temporary reduction in employer national insurance contributions for small businesses taking on extra workers is estimated to increase the deficit by around £1bn
• "The cost of bringing forward capital spending would depend on the specific proposal. The estimate given in the debate reflected an illustrative assumption that the policy would imply no real terms cuts in capital departmental expenditure limits in 2011-12. If this were the case, the increase in the deficit would be £5.5 billion"

Labour sides with the energy industry and Conservatives side with the energy consumer in hopeful shift of policy

By Matthew Barrett
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On Monday, Minister of State for Climate Change, Greg Barker announced that the Feed-in Tariff (FIT) level for solar installations would be reduced as a result of soaring take-up of FITs. FITs are subsidies for small-scale renewable electricity generation, paid for by ordinary households through their energy bills. The government has allocated an £867 million budget for FITs over the next four years. Without this limit, the cost of FITs to consumers would soar. 

Greg Barker has written to Labour's Caroline Flint, the Shadow Secretary of State for Energy, after she opposed the new measures to protect consumers from escalating subsidies for solar power.

Speaking in the House, Caroline Flint described the government's plan as "yet another example of a government which is out of touch", she called the move one that "threatens to strangle at birth the solar industry", and "a kick in the teeth for all those families who want to do the right thing by investing in solar". 

Labour Shadow Education Minister argues for the abolition of private schools

By Matthew Barrett
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Stephen Twigg, a Blairite reformer, was appointed to the Shadow Education brief in Ed Miliband's last reshuffle. As a former Education Minister who helped the drive for academy schools in the New Labour years, it was hoped his appointment might signal Ed Miliband's support for the Coalition's Free Schools programme. 

Indeed, Twigg said earlier this month:

"On free schools, I am saying that we need to apply a set of tests, that we are not going to take an absolute policy of opposing them. The tests should be: will the school raise standards for pupils and parents, will it contribute to a narrowing of the achievement gap between rich and poor and what is the wider impact of that school?"

Unfortunately, any credibility that Twigg may have in his brief will be undermined by the class war, anti-rich sentiments of his deputy, Kevin Brennan (pictured above), who last night spoke in favour of abolishing private schools - a proposal last seen in Labour's 1983 manifesto, aka the "longest suicide note in history".

Brennan was speaking at the Oxford Union, where he proposed the motion "This House Would Abolish Private Schools". Brennan had previously spoken in favour of the same motion in his debut speech to the Oxford Union - as a student.

Every Coalition spending cut is now opposed by Labour

By Matthew Barrett
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Labour politicians have long pointed to their "Plan B", and their deficit reduction strategy that would, apparently, be carried out slower than the Coalition plan, and be less "painful". Ed Balls, Labour's Shadow Chancellor, told the House on Thursday - in a debate on the Global Economy, during the recalled Parliament's sitting - that Labour's plan for the country was "a tough, medium-term plan to get our deficit down". (Read Ed Balls' contribution to the debate in Hansard here.)

Labour peer blames overspending under Labour for the recession

By Jonathan Isaby
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I am alerted by the beady eyes of the Tory press office via their Twitter feed to this article in the Guardian today by the Labour peer and economics professor, Lord Desai - currently a candidate for Lord Speaker.

Replying to an earlier article by self-confessed Keynesian Lord Skidlelsky, Desai is very straight about the cause of the recent recession:

"Unlike previous recessions, which were caused by lack of effective demand – the standard Keynesian case – it was due to overspending on the part of households and governments."

That would of course be the Blair and Brown governments.

He also debunks several of Labour's myths about how the Coalition Government is supposedly taking money out of the economy and cutting spending:

"Skidelsky contrasts former chancellor Alistair Darling's budget, which would have "taken out" £73bn from the economy, as against Osborne's budget whichwould take out £83bn over five years. But these numbers are hypothetical. Each represents a difference between what the pre-recession projection of the economy showed for 2010-15, and what in light of the recession and the debt situation each chancellor thought should be the revised path. No money has been taken out or will be from the economy.

"Osborne has frozen public spending, as planned by Darling for 2010-11, in real terms for five years. So public spending is not "cut": it has been prevented from rising, as normally happens in a growing economy. Where would the £83bn that Osborne has decided not to spend have come from if he did wish to spend it? Since households are in debt, as is the government, the money would be lent by the business sector. If Osborne does not spend, he does not borrow. So the money stays back in the business sector's balance. There is no question of 'transferring money to the private sector'. It is of not removing it in the first place."

Read the full piece here.

CCHQ publishes an illustrated guide to Labour's appalling economic legacy

By Jonathan Isaby

On the eve of the Budget, CCHQ has published a brilliant illustrated guide which puts into context just how appalling the economic legacy bequeathed by the last Labour Government actually is.

It demonstrates how debt interest payments cost us more each day than many of the traditionally highest spending departments...

...it highlights how the Government wasted billions...

...and notes how isolated the Labour Party is in its opposition to the Government's deficit reduction plan.

Click the above images to enlarge and click here to download the entire document as a pdf file.

Jesse Norman MP: Labour's economic relaunch was a car crash

Jesse Norman is Conservative MP for Hereford and South Herefordshire.

We should expect some party-political knockabout before a Budget.  But by any objective measure Labour's economic relaunch on Tuesday was a car crash.

First, on substance.  As my colleague Matt Hancock highlighted yesterday, the two Eds managed to promote a 2.5% VAT cut on fuel which would be illegal under EU law, supposedly funded by a bonus tax which would, even on optimistic assumptions, only raise £2bn, and only once.  Er, and in Year 2?

Secondly, on leadership.  As Ed Balls repeatedly emphasized later on the Daily Politics, the Eds have now banned any commitments from shadow ministers to reverse spending cuts.  But among other things, this includes Ed Miliband's own commitments to reverse the RPI-CPI switch and the Future Jobs Fund - which really cuts the Labour leader down to size.  So which Ed is really in charge?

Thirdly, on political message.  Until Tuesday Labour's strategy was pretty clear:  ignore economic reality, disavow Alastair Darling's own cuts and tax increases, attack the Coalition wherever possible - and hope the voters don't notice.

True, the two Eds had imposed formal controls on shadow ministers after February 16th, requiring them to clear all spending commitments with High Command.  But that fitted their strategy just fine, because no-one paid any attention to the new rules.  The result was £12 billion of unfunded spending commitments by Labour in the past month alone.

But now even this bizarre arrangement is in disarray.  For the Eds have said there are in fact no Labour spending commitments at all.  In other words those £12 billion of unfunded commitments aren't even verbal commitments.  So what are they?  How can any Labour shadow minister say anything credible on policy now?

In sum:  Labour's relaunch included an illegal, short-term and economically illiterate policy, an embarrassing reproof for their leader, and a confused and self-contradictory political message.  That's quite an achievement.

> Monday on LeftWatch: CCHQ's department-by-department guide to Ballsonomics

Defiant Geoff Hoon refuses to apologise for bringing Parliament into disrepute

By Jonathan Isaby

Remember how, last March, a variety of departing Labour ministers were caught boasting about how they could use their contacts to help change policy and provide access to ministers in return for money?

Geoff Hoon , the ex-Defence Secretary, spoke about hoping to translate his "knowledge and contacts" into "something that, bluntly, makes money".

The Sunday Times reported how he had told an undercover reporter that "he had already been offered a chairmanship of a foreign defence firm for an 'embarrassing' amount of money" and "he offered to find out information on the defence policy from civil servants and said he would introduce fee-paying clients to ministers".

In December, the Standards and Privileges Committee recommended that Hoon be stripped of his former MP's parliamentary pass for five years - a move that was endorsed by the Commons without a vote the following week.

Ex-Cabinet Stephen Byers - who infamously compared himself to being "like a cab for hire" - lost his pass for two years.

Byers has also complied with the Committee's request for him to write a formal apology for having brought Parliament into disrepute. But this week's Tribune magazine reports that Hoon is defiantly refusing to do so:

"Geoff Hoon, the former Defence Secretary caught in a Sunday Times/Dispatches lobbying sting, is refusing to accept the findings of Parliament’s most senior watchdog that he brought Parliament into disrepute. He told Tribune that rather than apologise for his conduct, he has written to House of Comons Speaker, John Bercow, contesting the way that Parliamentary Standards Commissioner John Lyon reached his conclusion."

"But Mr Hoon refused to accept he had brought Parliament into disrepute. He argued that he believed he was having a private conversation with a potential employer and was trying to impress them. Writing to the committee, he said: “The worst that could be said is that I suggested that I knew officials who were working on the defence review. I only knew that because the officials themselves had told me so.”

"In his letter to Mr Bercow, he said: “The committee never really looked at my representations, they just took the ruling of the commissioner. Their decision gives Rupert Murdoch a green light to pursue this type of journalism.”