The first part of this article was originally posted in the Guardian, on Thursday 6 January 2011:
Ed Miliband accuses the Conservatives today of a “great deceit” in blaming Labour for the national deficit and warned that they have concocted a false narrative to justify politically driven cuts. Speaking at Labour’s campaign centre in Oldham yesterday, the Labour leader attacked the Tories for rewriting history.
In announcing a raft of swingeing public spending cuts the coalition government has repeatedly sought to portray that its hands are tied because of the size of the deficit it inherited from the last government.
The same argument was rolled out this week to defend this week’s rise in VAT from 17.5% to 20%, after warnings of the likely impact on low and middle-income families and the fragile economy. Amid Labour concerns that the opposition has not been forcefully contradicting the coalition’s narrative on the deficit, Miliband insisted that it was not caused by Labour overspending but by the global financial crisis.
“My concern is that a great deceit designed to damage Labour has led to profoundly misguided and dangerous economic decisions that I fear will cause deep damage to Britain’s future,” he writes in today’s Times (paywall).
The Labour leader says that by blaming the deficit on overspending the Conservative-led government is seeking to win consensus for its policy of cutting the deficit “as far and as fast as possible”. But he accuses the chancellor of “gambling on a rapid rebalancing of the economy” and says he is going “too far and too fast on the deficit”.
Accusing the Tories of attempting to rewrite history, Miliband points out that Britain’s debt at the outset of the economic crisis was the second-lowest in the G7 and lower than it was under the Conservatives in 1997 and says neither of the parties in the coalition government called for lower spending at the time.
Miliband repeats his warning from earlier this week that the VAT increase will squeeze families on middle and low incomes and says growth will be restricted as a consequence. He argues that while some would argue those are prices worth paying in the short-term, the effect will be to store up greater problems for the future.
He says Labour is not opposed to every cut, but that he does oppose those being inflicted on the county’s poorest. He added: “but neither is it true that Labour is to blame for the deficit or that the deficit-reduction programme being pursued by this government is necessary and fair. Because this Conservative-led government is trying to deceive people about the past, it is making the wrong judgments about the future”.
David Cameron said yesterday that the joint impact of increases on duty and VAT meant things were “very painful and difficult” and raised the prospect of introducing a fair fuel stabiliser which would keep fuel duty down when oil prices rise. He also admitted that the rise in VAT to 20% this week was regressive in terms of people’s income but “might not be if it was looked at in terms of people’s spending.”
The claims made by the Conservatives that Labour “left a mess” don’t stand up to scrutiny. Here is a little evidence which demonstrates that the Tories have a track record of lying, and of blaming everyone else for their own ideological preferences, policy decisions and economic incompetence:
Thanks to Richard Murphy, who produced this graphic, all data is from the HM Treasury Pocket Bank for 30 September on the Government’s own website.
OBR head rebukes Osborne: the UK was never at risk of bankruptcy. Osborne was rebuked by the Office for Budget Responsibility (OBR) for telling the great big lie about Labour leaving the country “near bankrupt”, yet Cameron has used that same lie in the televised leaders debates. You’d think that a near “bankrupt” country would have had the Fitch and Moody triple A credit ratings downgraded …oh hang on, didn’t that happen … under the TORIES?
And haven’t the Tories borrowed more in 5 years than Labour did in 13? Surely we must be bankrupt now, by the Tories’ own reckoning.
Then there is the oft-cited Liam Byrne note. The jest recalls a similar note left by Tory Reginald Maudling to his Labour successor James Callaghan in 1964: “Good luck, old cock … Sorry to leave it in such a mess.”
Byrne clarified at the time that the note was meant in jest: “My letter was a joke, from one chief secretary to another,” he said. “I do hope David Laws’s sense of humour wasn’t another casualty of the coalition deal.”
Treasury sources said the full text of the letter from Byrne – dated 6 April, the day Gordon Brown called the general election – was: “Dear chief secretary, I’m afraid there is no money. Kind regards – and good luck! Liam.”
Byrne’s notes have caused bemusement before. When he was promoted to the cabinet in 2008, he gave officials a set of instructions entitled “Working with Liam Byrne”, which included the lines: “Coffee/Lunch. I’m addicted to coffee. I like a cappuccino when I come in, an espresso at 3pm and soup at 12.30-1pm … If I see things that are not of acceptable quality, I will blame you.”
Gary Gibbon of Channel 4 News remembers that former chancellor Alistair Darling had also left a note for his successor, George Osborne, as well as a bottle (how very civilsed) – but, in Gibbon’s words, “no revolver.”
It’s an indication of how desperately determined this government are to blame the previous government for the consequences of their own policy decisions and economic catastrophe, that the Tories have to seize on a traditional and humorous exchange between outgoing and incoming ministers as “proof” to bolster their spurious claims and to prop up such deception.
The Office of National Statistics (ONS) has said that David Cameron has presided over an economy with the weakest productivity record of any government since the second world war, and revealed that output per worker fell again in the final three months of 2014.
In a separate blow to the credibility of the government, two-thirds of leading UK economists said they believed George Osborne’s austerity strategy had been damaging for the economy.
The Centre for Macroeconomics polled 50 leading economists, asking them whether they agreed that the government’s deficit-reduction strategy had a positive impact on growth and employment. One third disagreed and a further third strongly disagreed.
Furthermore, 77% feel that the outcome of the general election will have serious (“non-trivial”) consequences for the economy, and are clearly not in favour of the Conservatives’ “long-term economic plan.”
The Tories seem to think we have forgotten that it was they that lost the Moody’s Investors Service triple A grade, despite pledges to keep it secure. Moody’s credit ratings represent a rank-ordering of creditworthiness, or expected loss.
The Fitch credit rating was also downgraded due to increased borrowing by the Tories, who have borrowed more in 4 years than Labour did in 13.
I remember that we were very well sheltered from the consequences of the global banking crisis by the last government. It’s remarkable that despite George Osborne’s solid five-year track record of failure, the Tories still mechanically repeat the “always cleaning up Labour’s mess” lie, as if increasing the national debt by 11% of GDP in 13 years, mitigated by a global recession, caused by bankers, as Labour did, is somehow significantly worse than George Osborne’s unmitigated record of increasing the national debt by 26% in just 5 years. Osborne has ironically demonstrated that it is possible to dramatically cut spending and massively increase debt. Austerity doesn’t work as a means of reducing debt, but works exceptionally well as a smokescreen for an ideologically-driven reduction of the state.
The Tories have seized an opportunity to dismantle the institutions they have always hated since the post-war social democratic settlement – institutions of health, welfare, education, culture and human rights which should be provided for all citizens. The Tories attempt to destroy fundamental public support for the health, education and welfare of its people. Offering and inflicting only regressive, punitive policies and devastating cuts, the Tories lie, lie and lie some more to attempt to justify the unustifiable.
The Conservatives have not encouraged investment in the UK either:
The Tories have told many lies. Here’s a list of those that have earned them official rebukes – A list of official rebukes for Tory lies.
The Austerity Con – Simon Wren-Lewis