The backdrop to the Labour leadership election is the consensus across the coalition Government and the New Labour candidates that the £150 billion budget deficit must be reduced largely by public spending cuts. The main difference between them is the timescale in which the deficit must be reduced. The Fiscal Responsibility Act committed the then New Labour Government to cutting the deficit by 50 per cent in four years, while David Cameron and Nick Clegg now propose to eliminate the whole deficit in one Parliament, with a taster of £6 billion cuts being brought forward immediately.
None of them are willing to look at a serious increase in the tax take from either redistributive tax increases such as the Robin Hood tax or seriously tackling tax evasion and avoidance.
No one believes that significant economic growth will materialise in the next two years to lift tax revenues and ease the deficit. The Organisation for Economic Co-operation and Development is predicting no more than 1 to 2 per cent growth up to 2011 and David Blanchflower, a former member of the Bank of England’s Monetary Policy Committee, cautions that the coalition’s plans risk a double-dip recession. The result is a consensus across all the leadership elite of all the main parties that demands a cutback in public spending not seen in this country since the 1980s.
We will discover in the autumn’s Comprehensive Spending Review that to achieve cuts in public expenditure on this scale will result in real job cuts including health service workers, teachers, police officers and firefighters. Welfare benefits and pensions will inevitably come under attack to secure this level of savings.
I am standing in this leadership election specifically to call for a break in this cross-party consensus on who is to pay for the economic crisis.
The only hope of Labour regaining office is to demonstrate a radical change in political direction of our party so that we lead the resistance to the coalition’s cuts and challenge the economic orthodoxies of the coalition and New Labour neo-liberals.
Why should our people pay for a crisis not of their own making and why should they have to stand by watching their jobs and services being cut while the bankers are still paying themselves obscene pay levels and the bonuses have returned? People are not stupid. They can see that we are all paying for the casino economy to be started up again.
Of course, we need to provide a convincing alternative. Our alternative programme should set out a radical new course to challenge the consensus. Rather than cutting spending, we should be seizing control and stimulating our economy with large scale public investment, ending privatisation, creating and protecting jobs with trade union rights, increasing the national minimum wage, state benefits and pensions, building the homes we need, really committing to tackling climate change, developing our green industrial base, and promoting peace in the world with withdrawal from Iraq and Afghanistan, and confronting the corporate tax evasion scandals and tax injustices and the waste of public resources on Trident and national identity cards to pay for our programme.
These are the policies and the arguments I want to put before party members and the wider community in the leadership election. If we are to have a fully democratic election for the leader of our party, surely these views should be heard? That is why I am urging Labour MPs to nominate so that we can have a full range of candidates on the ballot paper and have a real debate about the future of our party and our country. Not much to ask in a democratic party, is it?
