The Guardian view on Ed Miliband: splitting the difference
|
Version 0 of 1. Ed Miliband’s speech on the deficit on Thursday was dogged by a paradox. The way through Britain’s fiscal mess that he envisages probably fits pretty closely with what most cautiously minded swing voters would want – more measured debt reduction, with a better mix of taxes and expenditure cuts, in place of the quick-fire, lopsided retrenchment set out in George Osborne’s autumn statement. But few voters trust him to run the economy well, a position that led him to downplay, rather than accentuate, his differences with the government. The Labour leader was at his most assertive in attacking the nature of a recovery characterised by sluggish wage growth and – as a result – disappointing receipts. If Britain could give itself a sustainable pay rise the deficit may indeed begin to take care of itself. But of course, this is something that is more easily said than done, and particularly without a more fundamental macroeconomic rethink, of which Labour gives no sign. The welcome steps that the party proposes on the minimum wage and zero-hours working will affect things only at the low-paid margins. There were more substantive promises of change, but partly conveyed in code. Mr Miliband was reasonably upfront about wanting to tighten the purse strings more slowly. The experience of this parliament – where so many borrowing targets have been set, and then missed – has demonstrated the wisdom of retaining a little more discretion to deal with the known unknowns. On the desirable endpoint, however, he was less than explicit. He rejected the Conservative demand for overall surplus, and the accompanying rolling back of the state to the 1930s – promising merely to balance the “day-to-day” budget, excluding capital spending. The Institute for Fiscal Studies says that this dull accounting distinction may allow Labour to spend up to £50bn more than the Tories by 2019-20. But there was no such figure from the Labour leader, and because he has now vowed that there will be no unfunded plans in his manifesto, any specific “invest to grow” proposals will have to wait till after polling day. Something similar is true on tax, which every opposition frontbencher – like every independent expert – privately concedes will have to rise after the election. John Major’s Conservatives filled roughly half the black hole of the 1990s by raising revenue and only half through expenditure reductions. David Cameron promises tax giveaways and says: “I am confident we will find the savings we need through spending cuts alone,” revealing himself as a fiscal extremist. Ever since his leadership campaign, Mr Miliband has indicated he might like to redress the imbalance, but he shrinks from explaining how. Taxes on top-end housing and City bonuses will make small, if welcome, contributions. Beyond that, we’re left with the intriguing hint that those “who have done best, under this government and indeed under the last” will at last pay their fair share. Labour is preserving the room to do things differently in government, without sharing the detail of its thinking before voters make their choice. They deserve better. |