Last night Hopi Sen dreamt of a politics where Conquest’s third law was repealed. He reports back on what he saw.
It is 5 December. The chamber of the House of Commons is full. George Osborne gets up, his hands shaking a little. The opposition benches notice his nervousness and the noise in the Commons builds.
After what seems like an age, Osborne begins to speak.
‘Mr Speaker, I am pleased to report to the house that after four hard years the economy is growing, the deficit has been cut, inflation is falling, employment is up, investment is increasing and inequality is down.
‘Today, Britain is growing faster than France, faster than Germany, faster than Japan, faster than the United States, the eurozone and the average of the OECD nations.
‘But this is time to plan for the future, not congratulate ourselves on recovery.
‘This recovery has far to go, and we have much to do to secure it.
‘It will be years before the burdens of debt and recession are fully lifted from our backs,
‘But we are now seeing a recovery built by the responsibility, good sense and hard work of the British people.
‘So I want to place on the record my thanks to all those who have made this possible.
‘The families who have worked hard.
‘The public servants who have made sacrifices.
‘The entrepreneurs who have hired new employees.
‘The businesses who have invested for the future.
‘To them, we owe a deep debt of gratitude.
‘For them we can now look to the future.
‘However, there is one group of people who said all this was impossible.
‘Who said that if we were responsible with the public finances, jobs would be lost, the economy would collapse, and recession would turn to depression.
‘Their only solution was not to trust the British people, but to spend, spend and spend again.
‘Sadly, to the party opposite I cannot offer thanks.
‘To them I can only say: Never again.
‘Mr Speaker, after several hard years, Britain is recovering from the catastrophic errors of the last government.
‘Now we must help the British people build a secure future on the solid foundations of hard work and enterprise, not the quicksands of borrowing and speculation.
‘Today I will set out the government’s national agenda, agreed by both parties in this coalition in the national interest.
‘First, we must secure the public finances for good. Never again must irresponsible governments run deficits in years of growth.
‘Second, we must build an economy that supports sustainable growth. We need the roads and rail to travel on, the science and skills to innovate, the homes to return to.
‘Finally, we must help families, businesses and workers gain a fair share of the recovery, as our thanks for their sacrifice in saving Britain from disaster.
‘These are our values. Responsibility. Sustainability. Shared recovery.
‘First, we will return the government finances to surplus by the end of the next parliament.
‘This is the foundation of all sustainable growth.
‘It is the restraint we show here that gives Britain the security to invest for the future.
‘I am able announce today that as the deficit is falling faster than expected, we are in a position to authorise further investment for the future.
‘We will offer businesses who invest in British science and technology new incentives by doubling our support for applied research in high technology areas, matched by private investment.
‘Next, we will build a new generation of technical and vocational colleges, with public and private support, to give apprentices and their employers a chance to boost their careers.
‘And we will increase investment in the infrastructure that keeps Britain’s economy growing.
‘Today I am able to announce that the falling deficit means we can build new roads, extend Britain’s rail network and increase the funding for building new private and social housing.
‘The reward of growth is the chance to lift the burdens on hard-working families.
‘Mr Speaker, this government knows that you do not help families with an easy bribe. Every bit of help must be paid for. There are no free rides, no magic money trees.
‘Sadly, this is a lesson some have still not learned.
‘They are the snake-oil salesmen of modern politics, peddling remedies with no chance of working, in the hope that people will fall for the promise and find it too late to regret the cost.
‘The help we offer is built on the rewards of a steady growth that they denied could ever happen.
‘To help those working hard, we will increase the minimum wage above inflation each year for the next five years, subject to the advice of the Low Pay Commission.
‘To further help working families, as long as deficit reduction meets our targets, we will increase the tax free personal allowance by £500 each year. This will lift millions of people from the burden of tax.
‘However, I seek to go further.
‘So today I can announce that we are correcting another mistake of the last government.
‘We will introduce a temporary 10p rate of tax, which by 2015 will apply to all pay of full-time workers on the minimum wage.
‘Currently, that is 13,000, and this will increase as the minimum wage increases.
‘The cost of this will be met from the increased tax income we have gained as a result of growth, and by holding down welfare budgets.
‘Crucially, delivering these changes will be subject to meeting our deficit reduction targets. We cannot promise people what we have not earned as a nation.
‘This means that we must be vigilant on expenditure. We will not undo the savings we have made on welfare budgets. We will not undo the cap on benefits. We will not introduce symbolic taxes that actually cost us money. Instead, we will go further in reducing the welfare bill, and any money gained will go directly into the pockets of working families
‘There is one final decision I wish to announce to the House.
‘Some have called for a freeze in domestic energy bills. I have carefully examined that proposal, and have rejected it.
‘As leading economists have said, a merely legislative freeze would not work, and, even if it did, every family knows it would not go far enough.
‘Thanks to deficit reduction and growth, we are in position to fund green measures through general taxation. This will have undo the recent price increases, while still preserving our environmental commitments
‘But I want to go further. So, this government will deliver an immediate cut in domestic energy bills, funded by a tax on overseas buyers of expensive property. Further, we will increase the value of the winter fuel allowance.
‘This will at one stroke, deflate a bubble in housing, redistribute funds from the wealthy to working families, and make a real difference to families who work hard and play by the rules.
‘Mr Speaker, these are the rewards of responsible recovery.
‘It has been a hard-earned recovery, and there is far to go.
‘But at last we can turn our back on the false promises of the past, and concentrate on building a real future together.’
At which point I woke up. Surely he wouldn’t be so shameless, so irresponsible, so … smart?
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Hopi Sen is a Labour blogger who writes here, is a contributing editor to Progress, and writes a fortnightly column for ProgressOnline here
He might not go as far as that – I suspect that he’ll want to save something for the next Budget and a bit of wriggle room to trump anything that Miliband dreams up in his next Conference speech, but I would be unsurprised if Osborne didn’t just lift this…
There’s an eery sense of Hopi having captured exactly the speak-bold-but-say-nothing-meaningful house style of the government front bench. is he perhaps a speech writer for the government in his day job?
The one thing Osborne cannot admit is that, had he not damped out of sight the growth that was happening in the spring of 2010, the growth we are now seeing would have been from a higher base that it is. The lost growth of the last 3 years – and the lost tax receipts that would have flowed and helped reduce the deficit – should be a lasting indictment of his unfittedness for high office. The public should be told in plain terms that the National Debt has been rising and not falling under Osborne, and the closing of the deficit has been pitifully slow because of and not despite his chancellorship.
DF. In your analysis, did the Eurozone crisis have any negative impact on UK growth, or would it have continued unaffected with the policies you were suggesting?
All things are connected so it should not be thought I am suggesting socialism in one country can wholly succeed. The effect of general European malaise has been to depress demand generally and that doesn’t help the British economy. But pursuing austerity on a recession has been no more successful there than here, and in some countries catastrophic. It is interesting to note that Ireland which has one of the worst debt/GDP ratios has not gone in for savage austerity and is now coming out of needing special basket-case funding, even if not yet exactly buoyant.
What planet are you on?
Ireland hasn’t gone for austerity? There were massive wage cuts across the board! That’s why it is coming out of from being fcrisis funded.
As for socialism not being able to succeed alone it can certainly fail together or alone it always does, look at the basket case economy Hollande has created in France.
Ireland did not go in for savage austerity? A good example of a political philosophy based on misdirection and untruths. Brown good, Osborne bad – the facts don’t fit so change the facts to fit your point of view? Shameful.
‘funded by a tax on overseas buyers of expensive property’
Expect could not be levied on other EU nationals, and with them gone would meaningful amounts be raised…
Yes because the majority (70% plus in London) are bought by buyers from SE Asia. Though I suppose it could be done via a shell company set up in Europe?
Then there are the top end buyers – middle east and Russians dominate there.
I don’t know of any data to dispute what you say, but interested to know how you know 70% plus are non-Euro buyers
A mansions tax is related to the property and so unavoidable by non-doms etc if a charge is placed on the property for non-payers with accumulating interest and, I hope, penalties for late payment. Doubtless the embassies would escape, but few else.
This would not be a universal mansions tax, but a tax on foreign buyers of property, some of which may not be resident in the UK at all. And not all of it in the millions. Half of new build properties in the capital are sold to overseas buyers who dont live in the UK and maybe dont visit but hold it and rent it out as an invesment
Britain’s deficit is reducing so slowly, and things like housing benefit rising so quickly due to ever rising private rents (up by £5 billion a year in 5 years – from £20 billion to £25 billion a year) and population increases with limited supply, that removing the deficit by 2020 seems extremely difficult.
It went down from £150 billion to around £120 billion in the first year of the govt then has flatlined around £120 billion for the past 3 years. It is going down but so slowly – around £115 billion this year even with high growth – but the tax incomes aren’t matching that growth. Extremely optimistic it will go in a few years.
I waited for the final line and expected it to be a Labour Chancellor named George Osborne. It had to be a dream as GO would never make such a speech, never be so smart, never fail to give 90% of any savings to his own, already rich, class. Apart from that, tell Ed Balls to start practising this speech in front of the mirror and stop practising telling the people that Labour will have to continue with austerity.
“the deficit has been cut”
is it not the case that the rate of growth of the deficit has been cut, not the sum itself.
the point thats still being ignored by all sides is … western nations have been living beyond their means for decades and that has to end. doesnt matter how politicians or commentators whine … the entitlement culture is over, there simply isnt enough in the system to continue deficit spending.
No, you’re wrong. The deficit is being reduced. It is debt that continues to rise.
That £180-100Bn is the amount they are overspending by, each year, not the amount of debt; this is currently around £1.25Tn (roughly 82% GDP).
The deficit in 2010 was around £180bn and is around £100bn now so it has indeed been cut. The debt increases by the sum of the deficit every year which is Brown’s poisoned legacy to us and our children. Unfortunately, reducing the deficit to zero on day one of the coalition, or even by reducing much faster than they did, would have plunged us into a severe depression as is what happened in Ireland, Greece, Spain, Portugal and is occurring now in Italy and France. This is the problem with Balls’ argument – he states the cuts were too far and too fast, when they weren’t, and then complains of flatlining in the economy. One is a factor of the other, which even a fool like him knows only too well.
Hopi Sen [mahfgw] should have more such eerie and enlightening deams. [Send them post-haste to Ed’s advisers/scriptwriters in their eyries.]
Cameron’s adviser, the Wizard of Oz, tremble! Tories look after Tories – fini. Their shambolic CURTAIN is about to be ripped down in May 2015. Never to be re-hung. Deo Gratia.
Vive la Hopi Sen.
Hopi is 100% right: I’ve been around for quite a few decades and I know the Tories will say anything, promise anything to grab and keep power.
If anyone doubts it, just see their current crass attempts to retard access to the evidence for this hypocrisy: look at their efforts to erase from the web archives all their speeches before they came to power.
In the past, the One Nation Tories wrapped themselves in the Union Jack to win elections. In 2015, the neo-liberal Tory wolf will don the fleece of the One Nation Labour lamb.
So Hopi is right. But just condemning the wolf for being shameless, irresponsible and smart won’t help the lamb.
Yes, Labour must stick to its policy narrative: One Nation; producers not predators; responsible capitalism etc. Yes, it must continue to roll out ‘taster’ policies like re-setting the energy market during a price freeze. Yes its members need to engage in community action.
But we must also go for the heart of the beast: the neo-liberal ideology to which Cameron has now finally succumbed with his volte face in favour of ‘permanent’ austerity.
Our narrative must demonstrate that it is Labour that bases its policies on evidence while the Tories base theirs on a failed ideology that the rest of the world is abandoning, that knows the cost of everything but the value of nothing.
Today, our rejection of neo-liberalism is only implicit (we’re against irresponsible capitalism). It needs to become explicit if the electorate is to be able to see through the Tories.
I thought AD’s plan was balance by 2017 or 8. In any case we haven’t had the reversal on UC yet.