Gideon Scissorhands Speaks

George Osborne reared his head in the Guardian today to turn the tables on Ed Balls and deflect attention from their own lack of a growth plan. He can sense that the public are beginning to loose confidence in the coalition, though they still retain a significant lead.

Today's article was clearly hastily written and full of inaccuracies:

1. Osborne claims that Labour ignored the structural deficit, despite warnings from the IMF, OECD and the IFS.

There is a simple response to this: if the Conservatives were so worried about the structural deficit then why did they pledge to match Labour’s spending plans until the end of 2008? If Labour ignored that advice – so did Osborne, for quite a number of years.

Secondly, no one except politicians talk about the 'structural deficit' because it is very difficult to define. It is a figure which can be picked from the air.

And of course, as I have indicated, there is a broader point that Labour could afford to let the UK national debt rise after bringing it down massively after 1997. Not only that – our debt repayments were higher as a percentage during the Thatcher years than under Labour, a point many Tories conveniently forget, so yes the debt repayments remain very affordable.

The markets were never considering a run on the UK AAA rating in April/May 2010. The Tories talked down the economy because it suited the political argument for dogmatic cuts and they talk up debt because once again it suites the ideological agenda to cut services.

The diagramatic below shows the cuts and tax rises both Parties have indicated, it highlights that the Tories are taxing more and cutting more. No wonder the public think this is too far and too fast.

(September 2010)

2. He says the second contradiction is that, “we know everything about the cuts Labour opposes but nothing about the cuts it supports”. He also says: “The Darling plan contains £14bn of cuts this coming financial year – just £2bn less than our plan.”

On the first point here – Labour has no need to set out a detailed plan; it cannot predict what the economy will be like in 2015. Besides, the Conservatives never spelled out most of their agenda while in opposition either. Remember the pledge to protect the NHS?

Secondly Osborne pledged a £23bn cut in his first full Parliament but this has since reduced this to £16bn. Labour would probably have done something similar. Obviously his figure may change in the budget coming shortly, but any revelation on this number shows that George has had to come out early because he has an exposed weakness.

The latter point on Darling’s plan is correct. But Osborne is also being disingenuous, he planned a massive £40bn worth of cuts more than Darling over four years and indeed if you take account of the £6bn cuts made in the 'Emergency budget' with the £23bn cuts he announced would happen in his first full Parliament, we can see that the Tory cuts are double Labour's to be accurate. We will not know until March the true figure.

3. Osborne claims he is not doing all this for “ideological reasons” – citing others such as the IMF, IFS, Libdems and CBI in support.

The most laughable of all the fibs because it clear that the Tories could manage the cuts over a longer period.

The IMF’s backing for Gideon has also been very contradictory, with some reports pointing out that cuts will damage growth.

The IFS have supported the deficit reduction plans but frequently attacked other key Conservative claims: that they were highly unfair to the poor, would lead to more child poverty, that it made no sense to cut EMA, the marriage policies were rubbish and so on.

Lastly, Osborne cites support from the US. This is also dishonest: Obama hasn’t signed any budget plan to cut the deficit, primarily because he believes they will harm the economy and kill more jobs. Obama is still fighting for the exact opposite of what the Republicans there and Conservative here want to do.

Gideon has an exposed weak flank; Labour need to expose this.