Thursday, January 6, 2011

Ed Miliband's Credibility Deficit

"Watch my nose grow out to here when I talk about the deficit"

Ed Miliband writes in Thursday's Times newspaper that the deficit that the Government (or Conservative-led government as he insists on spinning it, in a pathetic and transparent attempt to alienate Lib Dems) is grappling with, is not the fault of the last Labour mis-led government.

In continuing his attempts to convince voters, who he clearly thinks are as gullible as 4 year olds, that this is the case, he is demonstrating what a poor leader he is and how he hasn't a clue about creating a credible narrative for his party that could return the credibility required to make them electable again.

In attempting to sell the lie that the deficit was caused by a "global economic crisis" he merely invites Coalition supporters to remind everyone, as if they needed reminding (sorry), that it is the structural deficit that is being addressed. In other words, the difference between what is spent from and earned in taxes after the economic cycle is taken into account.

The deficit wasn't created by the evil bankers, as some would have us believe. The bail outs of the banks, something Labour and Gordon Brown are quick to claim were part of their "save the world" strategy, certainly have added to the overall debt levels but not to the yearly structural overspend (a better word for deficit in my opinion). Eventually, those banks will be sold off (presumably just before the next election) and the taxpayers money spent on buying them out will be returned with interest. So, even the bank bail outs are only temporarily inflating the debt level that is being added to by the tune of £150bn a year, currently.

It is the £150bn overspend that needs eliminating if we are to start to tackle to frightening level of debt already racked up. The overspend has been caused by reckless and politically motivated structural spending increases that were unaffordable and now have to be brought back under control.

If you cast your minds back just a few years, you will remember a time when the word "cuts" was political poison. Labour's electoral strategy (something Ed Miliband was heavily involved in) was to keep spending more and more and then dare their opponents to suggest spending was too high. If they did, as the Tories had done in previous elections, the cry of "cuts in hospitals, nurses, doctors, police, schools, teachers, etc etc" would go out and voters were duly repelled. It was a successful strategy until the growing recession hit the banks and sparked the banking crisis. After that, people looked to government to spend more on supporting the economy and on social welfare for those cast into economic difficulty. But they saw a Government that had spent all the money during the good times and now had to rack up enormous debts to act to support an economy during, what was an inevitable downturn. We, the electorate, have to take some of the blame for being taken in by Labour's strategy and
the Tories learnt they had to avoid talking about cuts if they were to "detoxify" their brand.

So, the one thing Little Miliband gets right in his Times article was this lack of political clarity from Labour's opponents back then. That is regrettable but not an excuse to ignore the crisis now, as he proposes. His approach would leave us continuing to add to the £4.8 trillion debt mountain that is already a millstone around our childrens' necks.

2011 will be a testing year for the Coalition. It's on the right economic path but it starts getting rocky and is uphill for most of the rest of the Parliament. Let's hope it can keep itself together during the coming dark days of unpopularity and political tests, like the forthcoming AV referendum. The only way a clown like Ed Miliband will get elected is if the Coalition drops the ball in the middle of the game. The inbuilt electoral bias will return a Labour government with them just a few points ahead (or even possibly one or two points behind) the Tories. So, it's time for Tory and Lib Dem politicians and supporters to gird their loins and battle through the next couple of years while doing everything they can to counter the deceits put out by Labour such as "the deficit wasn't our fault"

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