Quite apart from the fact that they didn't have the courage of their convictions to actually sign their name (though I can probably have a stab at the author), I felt the letter warranted a reply. I wrote into the Guardian, and am hoping to have my letter printed tomorrow. For the purposes of space, I had to reduce my original argument by about half, so the longer version is included below.
Personally, I think it is extremely foolish for Labour to continue to frame their economic argument in the crass terms of 'cuts vs. investment', though I imagine those like Ed Balls will continue to do. Given Ed Miliband used his debut speech yesterday to state that the Opposition will not fight against cuts they think are necessary/right, it brings up an interesting point of conflict between the two. Balls' name is, of course, being widely touted for the Shadow Chancellorship. Surely Labour would not get themselves into another situation where the Leader is saying one thing, and the Shadow Chancellor is thinking something different?
Anyway - the letter:
I read with interest the anonymous contribution in your last issue, (‘Budget Will Put People Out of Work‘).
The letter, as with much of Labour’s reaction to the Emergency Budget, seems to be based on the fallacy – in part put forward by a recent Institute of Fiscal Studies report - that cuts in the public sector will automatically lead to vast, lasting unemployment. A closed argument that fails to take account of the Coalition’s welfare and business policies; the emphasis placed on getting people off benefits and back into the workplace, and on rebalancing our economy.
This economic recovery will be one fostered within the private sector, and to ignore this forms a circular argument that implies the public sector is the only possible workplace in this country. Given the grossly swollen public sector that they inherited, with its accompanying pension liabilities to the tune of £1 trillion, not included in any Labour deficit projections, shifting the balance away from the public sector would seem sensible, and crass attacks such as this are unhelpful.
The argument also seems to fly in the face of the figures. The UK’s GDP grew by 1.2 per cent in the last quarter. The additional cuts announced by the Coalition that your writer finds so unpalatable amount to 0.1 per cent of GDP by quarter. Cutting in this way is not a cut in economic revival, it is merely a cut in the size of the State. A European Commission study on defecit reduction found that out of 74 consolidations, economic growth accelerated in 43 cases. You need only look at the examples of Finland and Sweden to see the benefits of growth in this way.
However, this private sector recovery will not succeed if, as your writer alleges, the Government is ‘pulling the plug’ on business. I think a local example will serve to oppose this. When the local franchise of Puccino’s risked going out of business due to rent increases, it was the Coalition’s rate cuts that ensured it could keep trading. Cuts in business rates to small and large businesses alike are offering real support whilst the recovery gets underway.
In a week when the IMF has said the Government’s plans for defecit reduction are ‘strong, credible and essential’; in a month when Moody’s Investors Service has endorsed George Osborne and stated that not sticking to his plans could affect our AAA credit rating; in a Conference season where Alistair Darling comes out in favour of a strong deficit reduction plan, it seems a nonsense to view the economic measures currently being taken by the Coalition as ‘reckless’. What this country needed after thirteen years of fiscal profligacy and staggering beurocracy was a Government prepared to take the tough decisions in order to ensure economic revival. In the Coalition government, I feel we have it.
James Tarbit
Deputy Chairman, Political
Epsom and Ewell Conservative Future
P.S. There is one thing the writer and I can agree on, however; their analysis of why ‘most people join the Tory party’ – because they wish a smaller state. After thirteen years of beurocratic interference with front-line services and degradation of civil liberties, I think many people would sympathise!
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