Labour’s 2015 General Election Manifesto Starts With A Lie, And Then Gets Worse

Labour Party General Election Manifesto 2015 - Budget Responsibility Lock - Debt and Deficit Confusion

 

Much has been made of the fact that the Labour Party’s 2015 general election manifesto begins with a so-called “Budget Responsibility Lock” to fully fund all spending commitments and reduce the deficit every year – locks and ‘triple locks’ currently being all the rage in British politics.

But Labour’s manifesto also begins with a blatant lie, and nobody seems to have called them out on it. So here it is, straight from the preamble to Ed Miliband’s pitch to the voters:

We will get national debt falling and a surplus on the current budget as soon as possible in the next parliament. This manifesto sets out that we will not compromise on this commitment.

No, this manifesto does nothing of the kind. In place of honesty, Labour’s manifesto actually tries to hoodwink the British people by conflating the current budget and eliminating the current budget deficit with the overall budget and eliminating the overall budget deficit.

Eliminating the current deficit is simply not the same as getting rid of the deficit altogether and restoring a budget surplus. The current deficit refers only to the gap between tax receipts and day-to-day government spending (i.e. excluding capital expenditure). Therefore, it is quite possible to run a current budget surplus while still running an overall budget deficit. And why does this matter? Because you can’t begin to pay down the national debt so long as there is any kind of budget deficit!

To deploy one of those awful but ubiquitous credit card analogies:

Suppose you went on a spending spree using your credit card and came within a few hundred pounds of your credit limit, prompting the bank to send you a text alert. Resolving to mend your profligate ways, you begin repaying your credit card company everything that you spend each week on groceries, but continue to use the card to buy flat-screen TVs and iWatches, without including those sums of money in your repayment. Your debt to the credit card company is still increasing. And when you max out your limit and get a call from the collections department, they could not care less that you are now at least covering your weekly grocery bill. All they see is your balance increasing, your monthly outgoings continuing to exceed your repayments.

Labour’s claim that they will “get national debt falling” during the next parliament while not seeking an overall budget surplus is just a big, fat lie. There’s really no other word for it. It’s a blatant deception, printed proudly in large letters on the first page of their manifesto.

Labour Party General Election Manifesto 2015 - A Better Plan A Better Future

Fortunately, not everyone is willing to sit back and watch them get away with it. Fraser Nelson at The Spectator has been something of a voice in the wilderness calling for fiscal honesty from both parties, most recently taking the Conservatives to task for claiming to have “halved the budget deficit” when in fact they only cut it by a third, and then switched to a different metric to mask their failure.

Now, Fraser Nelson has turned his guns on Labour and shadow chancellor Ed Balls:

At Coffee House, we occasionally criticise George Osborne for stretching the truth when describing the deficit — but when it comes to hoodwinking broadcasters and deceiving voters, Ed Balls is the master. Three times on the radio today he lied about Labour’s plans, saying that he intends to have the national debt falling. He has no such plans: what he means is that he plans for the national debt to rise, but to rise more slowly than the economy is growing. What he means is that his plan is not for the debt to fall, but for a ratio to fall: the debt/GDP ratio. And it isn’t very ambitious, because that ratio already is falling.

Nelson concludes:

Britain now has, quite rightly, very strict standards on what insurers and bankers can say about their product: they are not allowed a word of exaggeration. It’s against the law. The ministers and politicians aspiring to get their hands on government and raise far greater sums in debt, with far bigger consequences, should be held to at least as high a standard.

That would be nice, though very unlikely to happen.

But was Labour right to place the deficit front and centre in their manifesto in the first place? Again, the answer is no.

One can understand the logic behind the move. Good stewardship of the economy has been Labour’s weakest point throughout their time in opposition. Anything that helps to neutralise the impression that Labour are profligate and careless guardians of the public purse makes good tactical sense – though Labour may never be seen as the natural party of hard-headed economic competence, they can at least neutralise their negative perceptions as far as possible. And to this extent, Ed Miliband and his shadow cabinet deserve a small sliver of credit for being brave, for taking the fight to the Tories and campaigning outside their comfort zone.

And yet it is profoundly depressing that either of Britain’s two major political parties is fighting the 2015 general election on a pledge to reduce the budget deficit, first and foremost. Is that really the best that we as a country can do? Must we now set our personal and national ambitions so low that the mere act of balancing our budget constitutes front-page-of-manifesto material?

Balancing the budget should be a hygiene factor, to channel Frederick Herzberg. All political parties should aim to do it, but it should not constitute the core ambition of any political movement – it is not a vote-winner, in and of itself. Of course, one can argue that Labour’s true goal, as previously suggested by Ed Miliband, is the creation of a “more equal” society. But if this were really a mission worth fighting for (as opposed to simply making political capital from) then it would take pride of place on the front of Labour’s manifesto, rather than a dull, technocratic “Budget Responsibility Lock”.

Our politics desperately needs someone to come along with a vision for Britain that amounts to more than just balancing our national chequebook, or “spreading the wealth around” a bit. But on this front, David Cameron is little better than Ed Miliband, offering targeted bribes to certain favoured voting blocs while entirely missing the bigger picture.

Criticising David Cameron’s recent campaign appearances, this blog noted:

Much like the vapid utterances of Ed Miliband, Cameron’s remarks are heavy on passion, but very light indeed on tangible goals and targets. And where specific targets do exist, they tend to be very pedestrian, the type of thing that a sitting Prime Minister should not be concerned about on a day to day basis. For example, GP appointment waiting times are a very important metric, but should and can not be the overriding preoccupation of a serious world leader, who must focus much of their time on strategic and geopolitical issues.

Of course politicians should take their share of the blame for this lack of grand vision – they have grown accustomed to offering very specific bribes to voters at election time – the tax free allowance raised by this much, so many pence off the price of petrol, five hundred more doctors for “our NHS”, et cetera. But in turn, the British public has grown accustomed to demanding these perks and bribes on a regular basis, forcing our leaders to continually focus on the small print rather than looking at the big picture.

As we approach the 2015 general election, the British people are becoming either fractious and resentful of all politicians, or supremely indifferent to anything that happens at Westminster. This is bad for our democracy, because with a fading sense of national identity and the lack of any compelling goal to strive toward, we are liable to end up choosing the political party that bribes us most effectively, that offers us the most “stuff”.

Labour’s 2015 manifesto has all the hallmarks of an exercise in box-ticking. Eye-catching attempt to address perceived lack of economic competence? Check. Jobs “guarantee”? Check. Bankers bonus tax? Double check.

I’m sorry, but it’s not good enough. Ours is a great nation, and we are capable of doing great things together when our efforts are properly harnessed around a suitably ambitious goal, when we are encouraged to think about what we can do for our country, rather than the other way around.

Be bolder. Set us a challenge.

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