Budget for the Millionaires

George Osborne used to say “we are all in this together”. Well, not any more.

Because today he gave a Budget where - as Ed Miliband said in the House of Commons - millions were asked to pay more, so millionaires can pay less.

Medway people were asked to pay for the millionaires elsewhere

In tough times the choices this Tory-led government is making tells you everything you need to know about them.

They prove that George Osborne and David Cameron are totally out of touch with what life is like for people in our country.At a time when bills are going up for families on middle and low incomes George Osborne has added to them all. Fuel duty is going up this summer, even though petrol prices are at a record high. He’s even added to the cost of a sausage roll from Greggs.

And at the very same time the Budget gave a tax cut to the very richest people in our country. Just 14,000 people earning £1 million or more will get a Budget boost of over £40,000 each year.

David Cameron and George Osborne could have used the money to cut fuel duty or reverse unfair and perverse cuts to tax credits – which will see thousands of working parents better off quitting work from next month. They could have used the money to reduce the cuts to police officers or help pay the down the deficit.

Instead they chose to cut taxes for the 300,000 people earning over £150,000 - the richest one per cent. How can this be the right priority now?Whatever he says about increasing the income tax personal allowance a family with children earning just £20,000 will still lose around £253 a year from this April.

And shockingly he slipped out a £3 billion tax raid on pensioners over the next four years. Nearly four and a half million pensioners who pay income tax will lose an average of £83 per year next April. And people turning 65 next year will lose up to £322. And all this comes from a government whose economic policies have utterly failed on jobs, growth and the deficit.

Of course there have to be tough decisions on tax, spending and pay. But we won’t get the deficit down unless we have a plan for jobs and growth to get our economy moving again and get people off the dole and into work.

And that was the gaping hole in today’s Budget. It wasn’t just unfair, it had no plan for jobs like Labour’s plan which includes a guaranteed job for every young person out of work for more than a year – fully funded by a tax on bank bonuses.Instead in Tory Britain unemployment is at a 17 year high, with a record one million young people out of work. Our economy has stalled as America races ahead. And this slower growth and higher unemployment means the government is set to borrow an extra £150 billion to pay for this economic failure.

George Osborne's plan has failed. Trying to raise taxes and cut spending too far and too fast has backfired. And with his tax cut for millionaires he is piling insult upon injury for millions of families and pensioners across Britain.

In the Budget debates Labour will vote against this unfair tax cut for millionaires.

Cameron's Trap

Christmas is such a good time of year; not only do you get to catch up with family and friends but the blackberry stays silent. It happens once every twelve months and by goodness it is welcome.

I have spent lots of days catching up with friends, family and former political campaigners and have been careful to drop the politics for a week or so.

I note today two interesting pieces of news that are on the face of it bad news for the Labour Party but are actually nothing of the sort given the position in the electoral cycle. Firstly the relative failure of the 'registered supporter' project established in September 2010, and secondly the paper by Gregg McClymont and Ben Jackson published today on the 'Cameron Trap' which has some very strong warnings on Labour economic re-positioning which does need to take place.

Firstly, I shall deal with the obvious Tory spin on the membership question.

Whilst it is true that the number of registered supporters are small it is worth remembering this was established only last year and as a result of the relative success of the French scheme and those in North America. It is worth noting that the French scheme has seen success as a result of over a decade of right-wing dominance in France and at a time when the French left are selecting a potential presidential candidate. In North America, the established political networks and partisan support base is particularly pronounced; unlike in the UK people actually register their political alliegiance and fund parties through 'Action Committee's.' It is therefore utterly inappropriate for journalists (who are currently fawning over Cameron) to compare the scheme in the UK with other countries when we have had 18 months of Labour opposition. Keep the scheme in place and nurture it; it will reap rewards slowly and surely...

Incidentally what the right wing journalists wont tell you, because that would be balanced, is that whilse the Labour membership (those that pay) has increased from 156,000 (2009) to 193,000 (2011) the Conservative Party membership has actually been declining since the election of David Cameron. The Tories have been clever not to reveal membership figures but it is almost certainly going in the wrong direction - as a result of ageing / death of the blue rinsers and the unattractiveness of the Tory brand to young peoply. So for sake of clarity the Conservative Party membership number is carefully guarded, but we can guess it is below the 177,000 reported in September 2010. I would hazard a guess that it even could have gone below the 156,000 figure.

What should worry the Conservatives is that Labour now has a period in opposition to attract new members (and we see them locally just on twitter alone); the same was not said for David Cameron who lost a third of his own parties support as a result of stitching up local selections and gerrymandering A-lister selections (who failed to get elected in the most part). As a result the modern Conservative Party is totally reliant on money from the financial services sector (that is the same bankers who caused the crash) and very rich hedge fund speculators. There is a rich seam here to be reaped by Labour at a better time...

Incidentally, whilst we are talking about membership figures; the Rochester & Strood CLP last tally was higher than the local Conservative Association and more importantly we know where the funding comes from; so Boris Island believe me is worth the Tories worrying about. We know the numbers and the contributions from moles and sources. The talent attraction that has occured locally to the Medway Conservatives almost exclusively comes from the English Democrats. Hoovering up extremists on the right is a dangerous move...

Which brings me onto the second question is the conclusions of 'Cameron's Trap' paper from Policy Exchange, which are endorsed I would add by the majority of Labour members.

Whenever I am told the membership of the Medway Labour Party is very left wing (which is not often) I merely point to the the CLP votes at the leadership elections in 2010. The Blairite candidate won the majority of member support across Medway and second was the next most Blairite candidate.

That tells you that the Medway Labour membership is wedded to the centre and is distrustful of very left wing positions.

The message therefore from Gregg and Ben can not and should not be ignored by those who want a Labour Government and who also want to appeal to our membership support.

The conclusions are not to be driven into a Council of despair:

•Refuse to be driven into a simple defence of the public sector and public spending and instead mount a patriotic appeal to the nation to improve growth and living standards.

•Put forward a more convincing strategy for private sector growth than the Conservatives. A key element of a credible growth strategy would need to be a widely-supported active industrial policy. In this way “Labour can evade the trap of the ‘tax and spend’ argument of 1992, by making the key measure of governing competence the creation of new and sustainable jobs that improve living standards. Labour is more comfortable than the Conservatives with the idea of an activist state: the Conservatives have reason to fear a political contest organised around which party can best promote growth rather than which party can best reduce spending.”

•Aggressively highlight the Coalition’s preference for regressive charging mechanisms to fund public services. Labour can counter this by offering more progressive funding mechanisms, and developing new welfare policies that reduce economic insecurity by pooling risk. Crucially, these approaches need not require significant additional spending.

Labour must: “embrace the successful electoral pitches of victories in 1945, 1964 and 1997. Each of these elections involved an attack on a Conservative party that had presided over a period of economic decay. 1964, with its focus on economic underperformance and relative decline, presided over by an out of touch Tory elite, is particularly resonant given the likely electoral battleground in 2015. A patriotic, national growth appeal is therefore essential to highlighting the inadequacy of Conservative political economy.”

Following on from my post on the economy on growth I believe the above to be absolutely correct; the Tories will of course try and de-stabilise Ed Miliband because they realise the threat.

Rule number one; ignore your opponent if they do not represent a threat. The fact Tories are moving onto rule number two, which is to undermine Ed Miliband, shows full well they can see the threat. And so they should; they see the same polling we do...

Beyond the Bubble: Ipsos MORI at the Labour Party Conference

View more presentations from Ipsos MORI

What the papers wont tell you is that most people think Labour actually the argument right on the economy since 2010 and the warning of the double dip. Most people also think Labour are articulating their views and is the party most alligned to them. They also rate Labour as united as it was under Tony Blair (a record for us given the usual period of lefty antagonisms which come about after loosing government).

The Tories can also see the economy worsening and the electorate warming to the economic argument from the left on the squeezed middle. The Tories also know (and it is constantly trumpeted by the right wing press) that they have a lead on economic trust or credibility which they must maintain at all costs.

The issue is trust on the economy but it is one best solved by reasoned change on deficit reduction and continuing to bang the drum on growth, spreading fair deficit reduction on the broadest shoulders and listening to people. Remember; the last spending review announcement in November saw George Osborne move the goal-posts to effectively following the Darling deficit reduction strategy... so no lectures required.

Ed Balls is the most effective spokesperson on finance Labour has and we have articulated the correct economic argument. Regaining the trust of the electorate will take time and is best reinforced by a stable and united party not gazing inwardly, at either safety first positions, or by having another leadership election. Irrespective of who wins in London in May 2012; we have the best team at the helm for the times we are in, and are polling well given the underlying lack of trust in the economy the electorate still has with Labour (see time based polling demographics above on government satisfaction).

There will be no leadership election just a sensible and rational opposition articulating the sensible middle ground and undermining the Tory argument from a position of sense.

Keep on focusing on the econony; set out a vision for growth and continue to highlight the Tory failures on the squeezed middle and remember Cameron didnt get a majority last time with all the fair winds at his disposal; 2015 will be even harder and a united Labour team with a consistent and strong message to the voter segment most targeted by the current, out-of-touch Tories may see us win.

Tory Economic Failure

After months of saying it, the sad fact is the Conservatives have been caught exposed as the predicted double-dip recession awaits us all. This was an utterly avoidable downturn had the Conservatives listened and accepted they were wrong on the recovery.

Labour has warned for months, including in the General Election, that the George Osborne plan was totally and utterly flawed.

He simply cut too far and too fast.

The Tory argument that Labour was being risky with the British Economy has been blown away with the Conservative Chancellor moving towards a Plan B. We have already seen fiscal stimulus with Quantitative Easing with the Bank of England, we note the infrastructure investment projects.

You wont hear this tomorrow but George Osborne is moving towards our position.

Unfortunately it comes too late. Today the OECD predicted the second recession; instead of apologising to the British Public we have Tory Ministers antogonising Unions and 'itching for a fight.' CCHQ even put out a most rediculous of attacks claiming that Labour would increase your mortgage interest by £5,000 per year.

It is utterly desperate stuff from a Party that is loosing its economic credibility after only 18 months in power.

Despite all the crap from Conservative Councillors about borrowing and investing; their own Chancellor is to rack huge amounts of debt - even more than Labour - so no pious lectures required. You lot have mucked up the recovery; 7 out of 10 voters think so.

The fact is the Tory government is set to borrow £46bn more than they originally planned – in March the Office for Budget Responsibility (OBR) increased its forecast for net borrowing by £45.6bn for 2011-12 to 2015-16. Goodness knows where we sit tomorrow.

Voters will remember this double-dip is a Conservative recession and it is a result of their mistakes. They were warned.

Labour stimulus during the last recession ensured the UK returned back to an even keel; Car scrappage, boiler scrappage, future jobs fund and government led construction made sure that the deficit began to shrink. And shrink it did. Before a single penny of the Tory cuts had even been implemented £39,000,000,000 had been wiped off the deficit.

This was not magic 'wot dunnit'. It was growth. The Deficit was only £136.7bn by the end of last financial year. The thing that we knew all along was that investment led growth would cure the deficit of its own accord.George Osborne will tacitly admit that when he institutes his £30bn infrastructure boost tomorrow.

He has accepted the Keynesian argument that you need investment led growth to shrink the deficit. It seems the only people who still hanker after deep cuts are the Thatcherites... and sadly we have a few of those in Rochester & Strood.

Ed Balls MP on Youth Unemployment

Ed Balls MP visited Chatham today to meet young unemployed on the day the figures by the ONS saw youth unemployment above 1m.

A Tory legacy of failure as they led on cuts to the Future Jobs Fund and the EMA. They trebled tuition fees and took the ladder of opportunity away from our young people.

Further videos:

Labour's plan for jobs

This is a really worrying time for families and businesses; struggling with higher food prices and gas bills and worried about their jobs and their children’s futures.

The Tory-led Government are cutting too far and too fast and risk choking off economic recovery. Unemployment is rising again and is currently at the highest level in 17 years. One in five young people are out of work and now more women are unemployed than at any time since 1988.

We need to act now to show the Tory-led Government that there is another way.

Labour has set out a clear five-point plan for jobs, to help struggling families and support small businesses. Our jobs plan includes:

1. A £2 billion tax on bank bonuses to fund 100,000 jobs for young people and build 25,000 affordable homes

2. Bringing forward long-term investment projects, like new school buildings

3. Temporarily reversing the VAT rise – a £450 boost for families with children

4. A one year cut in VAT to 5% on home improvements and repairs to help small businesses

5. A tax break for every small firm which takes on extra workers

GDP Growth Shock

This morning’s growth figures show that – as expected – the economy grew by just 0.2 per cent in the second quarter of 2011. Given that the economy flat-lined in the six months after September, it means that growth has been anaemic for the last nine months as the chart below shows.

For Medway residents it shows that the Conservative austerity plan which is seeing over-aggressive cuts has resulted in a decline in consumer confidence. Unemployment, benefit payments and future prospects remain bleak.

It is time for the Tories to accept that they need to focus on growth and jobs. Time and time again the opposition has made it clear that the doom-mongering and negative language from the Chancellor would spook investment. It clearly has.

The OBR’s latest prediction for 2011 growth of 1.7 per cent now looks virtually impossible to achieve. Even if the economy gets back on track in Q3 and Q4, 2011 growth will barely hit 1.2 per cent – under half its original prediction of 2.6 per cent which it made in June 2010. The OBR has already been forced to downgrade its growth predictions on three previous occasions and will have to do so for a fourth time when it releases its forecast evaluation report in the autumn. Alongside this, they will be forced to raise their borrowing predictions.

Tories can not hide now from their failure to mismanage growth in the economy. They have taken the wrong and over aggressive course and the longer this continues the longer that residents across Chatham, Rochester, Gillingham, Rainham and Strood will suffer.

Deficit Reduction Poll

An interesting poll from Harris Interactive which shows that a clear majority of people in the UK still support the argument that we need spending reductions

Labour nationally has taken a sensible approach of supporting cost and deficit reduction strategies whilst also emphasising that cutting too far and too fast could damange the economic recovery and lead to unncessarily high unemployment.

It is clear that this argument has led to a chunk of support moving from 'the emphasis on cuts' column to the 'emphasis on tax rises column'.

Whilst Harris polls are not to be believed in isolation Labour needs to be careful that it continues to articulate a deficit reduction narrative but one which emphasises fairness and which is not as aggressive.

The Tory cuts agenda is leading to pessimism and a real growth issue and there is a very valid argument which suggests they need to slow down.

Most of the public accept the need for cost constraint as family budgets tighten; government is no different if it is to once again return to an even keal.

It isn't Brown, its Balls.

And so finishes the front-line political career of Alan Johnson.

A much loved and respected politician but one who was clearly feeling the heat on the political and personal front in recent weeks.

Given his 'personal' situation it was sensible for Alan to step down. Odd though that Alan did not wait until a re-shuffle announcement, but suspicions tonight it may be related to a suspected affair with a civil servant that may have been revealed in the press.

This blog was cautious about the appointment of Alan Johnson to the position of Shadow Chancellor, instead overtly favouring the eminently qualified Yvette Cooper for the job.

Yvette has a future herself, but Ed Balls is the next best choice. He is intelligent, charming, caustic, discerning and has far more raw intelligence than George Osborne. Intellectually George will face a master across the dispatch box who will pick up on every inconsistency, every nuanced slight-of-hand and every decimal point in the budget box.

George himself has grown into the position but many in financial circles still feel he is too political and light weight. Someone with an incomplete and lack of grasp on economic detail. The Tories know this which is why they wheel out Michael Fallon (the man who did not get the Chairmanship) to tackle Labour.

Ed Balls will be able to challenge George on the minutiae as well as the bigger issues.

Interestingly neither men is particularly popular with the public. Both appeal to the partisan bases so expect red meat from both.

And what about the latest CCHQ-inspired attack of Ed Balls having worked for Gordon Brown. Cameron of course worked (or spun) for both John Major and Norman Lamont - that CCHQ line simply doesn't wash.... but well, 15% interest rates, werent, cough, that bad.

Ed Balls is the best choice for the job at this time. He will strengthen a formidable front-line team which is already 5% ahead in the national polls.

Tory Academy cuts Averted

It is only a tad two-faced for senior Conservative MPs to be taking credit, in full public, about the fact that our Medway Academies have finally been granted the funding to build new buildings.

It was a Conservative Government which threatened the funding in the first place and which has caused head teachers, parents and pupils untold stress and heart ache for months.

The credit, if any, should go to the tireless head teachers, school staff and Academy Sponsors who have had to wait, on every baited breath, from that call from the Department for Education indicating that Michael Gove had saved them from the Tory axe. The credit should also go to all those cross-party campaigners who worked hard to represent the Academies.

As we can now see, the funding for the Medway Academies was never a slight of hand by the previous Labour Government.

It was always costed and totally fundable.

The threat to these Academies had always and only come from a Conservative Government which had quite clearly rushed through, on what now can be seen by the public, to be a monumental mistake of judgement. The fact that Michael Gove himself has had to apologise for a litany of errors and the Department for Education has had to publish half a dozen (at least) corrected versions of the BSF cuts list highlights the total ineptitude of this current administration.

The next step is to identify what went wrong in government.

According to the Sunday Telegraph, it has seen internal memo's showing that Mr Gove was repeatedly warned by top officials that the £55 billion Building Schools for the Future (BSF) programme was a minefield which could not simply be abandoned at a stroke. He ignored the advice.

The general public can spot a mistake of this kind and identify its cause.

Everyone knows that Gove has managed this process so appallingly that a school-child with half his supposed IQ could have stepped in and got it right, after the first list of BSF cuts. Gove simply and carelessly rushed out lists of cuts to prove a political point, that Labour had made-up the funding for the Academies. The fibs that Labour had pledged money before the election that the government did not have, now stand totally hollow.

The announcement this week that our Medway Academies have secured funding is a welcome u-turn for sure, but this whole process highlights why Michael Gove, a former journalist, simply is not qualified to manage a major department of state.

The numerous errors point to one judgement. Michael Gove is simply not up to the job.

Local Tory MPs should be careful to take the credit for this process too quickly. The public, Academies and sponsors are under no illusion that the threat came from a Tory Government. The Academies and head teachers will remember the stress and hurt caused by the process. They will remember who gloated to celebrate and who apologised for the pain caused.

Lastly, they will remember the man who managed this process so poorly; one named Michael Gove.