4 May 2012

If I hear “Too far, too fast” one more time….

The Labour dialogue seems to have the phrase “too far, too fast” pasted into every other sentence. It is, of course, a popular line with many people who have suffered a financial loss due to the essential austerity plans of the government. But what does “too far, too fast” actually mean? Would Labour really do that much different? Is there anything to differentiate the two main parties in Westminster? Do they have a credible alternative?

George Osborne has stated that Alistair Darling’s Labour plan before the election was for spending cuts only £2bn smaller than the £16bn he was proposing for 2011-12. Furthermore, as John Rentoul of the Independent pointed out, ‘the Tories want to cut the deficit by 69 per cent in five years; Labour wanted to cut by 50 per cent in four.’ Since the parties have moved politically closer to battle for Britain’s more central, ‘swing’ voters, it could easily be argued that there is actually very little difference between the parties and their plans, and the “too far, too fast” slogan is little more than a political stunt to gain cheap, opportunistic votes.

There has been, during Ed Miliband’s reign over Labour, mounting calls for him to state his own economic plan. So far, his leadership seems to be characterised by general statements aimed at opposing every government proposal for political points, with little idea of how to tackle the potentially catastrophic issues that face our country in the future. We do, however, now have the ‘5 Point Plan’ for ‘jobs and growth’ (and more debt), a rather pragmatically named phrase that does sound attractive to a country trying to cope with the burden caused by Labour’s years of over-spending. Cutting VAT; taxing banks; a National Insurance Tax break: these all sound rather attractive on the face of it, but they are simply not feasible in the current situation.

The facts are simple: anyone knows that a person, much like a government, cannot indefinitely spend money they do not have. As unpleasant as it sounds, we need to acknowledge that we need to tighten our belts and spend less. It is not ideal, but it is necessary. Labour’s leaders, students that went to Oxford and are undeniably clever, seem naïve and illogical when they suggest spending even more, which will inevitably make the long-term consequences even worse. It is simple logic that spending more, when in debt, will make the situation even worse. The short-term, introspective policies of Ed Miliband’s party seem, to many, to be nothing more that insubstantial, pragmatic and opportunistic ways to conjure support for an unsupportable leader. 

1 comment:

  1. You say it's simple logic - like running a country is the same thing as running a household. But this is a false equivalence - in a household there is no such concepts as unemployment, income tax, public/private sector spending.

    The real danger with austerity economics is that it may damage our economy to the point that tax income to the government will fall considerably - this will make the deficit harder to reduce, and lower everyone's living standards while we're at it.

    So Labour's arguments are not without merit. We have to reduce spending, yes, but we must balance this against causing the minimum damage to the economy. What logically follows from this is that we should lower the deficit as fast as possible *without* causing damage to the economy - but the current austerity policies of the Tories pay no attention to the economy. You simply need to look at unemployment/underemployment statistics to see the proof of this.

    Keynes once said "Look after unemployment and the budget will look after itself." Keynes' economic policies were responsible for the post-war economic boom, during which time many governments were in massive debt. Cameron has reversed this logic, and will suffer the consequences.