Picking up the slack: Labour's economic doomsayers are proved wrong, again

By Mark Wallace
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There's always been something of the religious mantra about the Left's refusal to believe that the British private sector was capable of picking up the slack by creating jobs to replace those lost in the public sector.

Perhaps it's a lack of imagination which leaves them unable to conceive of jobs being created through mechanisms which they don't understand. Perhaps it's egotism, driving a belief that their actions in government will always be more effective than anything the private sector could do. Perhaps it's simply a desperate hope that economic suffering will help them to prosper politically.

Consider the following six quotes, from senior figures in the Labour Party, prominent commentators and Ed Miliband:

Ed Balls, Hansard, 12 October 2011:

"We were also told that public sector job cuts would be more than outweighed by the rise in private sector jobs, but I am afraid that employment is falling because the private sector has been unable to deliver the recovery we were promised. It has been a complete fantasy."

Ed Miliband's "predistribution" speech, 6 September 2012:

"I'm afraid the Government believed its own propaganda – that they could cut as far and as fast as they liked and the private sector would pick up the slack."

Alan Johnson's first speech as Shadow Chancellor, 18 October 2010:

"...in the current climate there's nothing inevitable about the private sector picking up the slack, when the public sector starts laying people off." 

 SImon Jenkins, The Guardian, 27 October 2010:

"David Cameron and business leaders claimed in unison that the private sector would "take up the slack" of some half a million workers ejected from the public sector. They cheered, but nobody could illustrate how that would happen."

Westminster Digested, The Guardian's "satirical" take on politics, 1 December 2011:

 "Cameron:...Only a moron would have imagined the private sector would suddenly pick up the slack in the worst depression since the 30s!"

David Blanchflower, in the New Statesman, 16 March 2012:

"The private sector isn't picking up the slack"

Then consider the new figures released today by the ONS, which show that:

"Private sector employment has jumped by 1.3million to a record high of 24.1million under the Coalition Government – while public sector employment has fallen by 423,000. But last year the increase in private sector jobs was almost five times the fall in public sector work."

So despite Ed Balls' fervent hopes, it turns out the private sector could and did take up the slack - and then some.

To paraphrase a great Norwegian: Karl Marx, John Maynard Keynes, Keir Hardie, Gordon Brown, Eddie Izzard, Len McCluskey...can you hear me, Polly Toynbee? Your boys took one hell of a beating.

Labour's Posh Boys (and Girls)

By Mark Wallace
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Back row: David Miliband, Ed Miliband, Ed Balls, Harriet Harman.

Standing in middle: Hillary Benn, Chuka Umunna.

Front row: Fiona McTaggart, Tristram Hunt, Tessa Jowell.

It's become a regular refrain from Labour ranks that the Tories are posh. The infamous Bullingdon photo, which Carla Millar today mimics above, is used as shorthand to pick at the number of privately schooled men and women in the Cabinet and in the Parliamentary Conservative Party.

The failed attempt by Labour to make class an issue in the Crewe and Nantwich by-election, with activists dressed up in top hats and tails, stands out as an example of their enthusiasm for the subject.

Labour's job advert for a new spinner reveals the holes in their operation

By Mark Wallace
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Guido reported a few days ago that Labour are seeking to hire a lobby journalist to become their new Deputy Director of Communications.

Now the job advert has gone online, and it reveals a few things about how Labour view the state of their operation at the moment:

Among the responsibilities are:

• "Sharpen and improve placement of attack stories..."

• "Ensure message discipline from the Shadow Cabinet and front bench teams..."

• "Improve language from the Shadow Cabinet and front bench teams..."

In other words, the Opposition isn't landing punches, Miliband is sick of frontbenchers rocking his boat and Labour doesn't feel its Shadow Cabinet are communicating properly - and they know it.

Europe, public spending, union power grabs...Labour have plenty of splits of their own

By Mark Wallace
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The media is intent on a "Tory splits" narrative. Given the obsessive focus on any hint of disagreement on the blue side of the House, it is surprising that there has been so little reporting of Labour's splits.

They do have them - three in the last four days, in fact. Here they are:

The EU

Yesterday, various figures from the left and right of the Labour Party launched Labour for a Referendum - only days after Ed Miliband publicly rejected the idea of giving the people a say on Britain's EU membership. The rebels aren't just eurosceptic "usual suspects" like Kate Hoey, they include Brussels fans like former Europe Minister Keith Vaz.

How has Ed Miliband's sixth re-launch progressed so far?

By Matthew Barrett
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A week on from Ed Miliband's sixth re-launch, it would be timely to review his progress. Has he managed to persuade the public of his credibility at last? Has he managed to thrash the Coalition in the polls? Is his Party settled and united behind his leadership? It seems not. 

• Ed Balls' big policy speech hinted at Labour wishing to earn economic credibility: "In a speech to the Fabian Society on Saturday, Balls said he accepted every spending cut being imposed by the coalition and endorsed George Osborne's public sector pay freeze, adding that it might need to continue beyond the end of the current parliament."
• Ed Miliband then supported this stance: "Ed Miliband has backed his shadow chancellor, Ed Balls, saying he cannot promise to reverse any spending cut at this stage, and dismissed criticism of his own leadership as "part of the gig"."
• ...But at the same time, Miliband said Labour opposes the cuts the Coalition is making: "If Labour was in power now we wouldn't be making those changes. We wouldn't be cutting as far and as fast as the government."
• Perhaps this best explains what Miliband's position seems to be: "Labour's newly calibrated position is that it opposes some spending cuts, on the basis they slow recovery, but cannot promise to reinstate any of them ahead of an election."

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 Shadow Foreign Secretary adopts "mature patriotism" towards Europe

By Matthew Barrett
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Labour's Shadow Foreign Secretary, Douglas Alexander, has written for the Guardian today, on Labour's new policy of "mature patriotism" towards Europe. Alexander writes: 

"Our task is instead to tell a new story about Britain and Europe, rooted in the need for reform revealed by new economic and political realities. To cut ourselves off from a market of 500 million customers wouldn't just imply we had lost faith in Europe, it would suggest we had lost faith in the ability of British companies to outcompete their European rivals. High-value services and high-skill manufacturing need to be underwritten by common standards and competition laws."

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 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.