Attempting to regain the public’s trust on the economy was hardly optional, but I’m impressed by Labour’s approach here and that they’ve recognised that 3.5 years before the election isn’t too soon to start this process. Maybe I’m just happy to hear some actual policies from them.
Mr Balls will make two new pledges in his speech.
He will say: “First, before the next election - and based on the circumstances we face - we will set out for our manifesto tough fiscal rules that the next Labour government will have to stick to - to get our country’s current budget back to balance and national debt on a downward path. And these fiscal rules will be independently monitored by the Office for Budget Responsibility.”
This is not just good politics but good policy, and I’ve been wondering if the Coalition should create guidelines or legislation to avoid long-running deficits in coming decades. The fact that Labour need to introduce independent oversight to reassure the public is a demonstration of their current economic credibility, but then Balls goes on the offensive:
“And second we know that, even as bank shares are falling again, David Cameron and Nick Clegg are still betting on a windfall gain from privatising RBS and Lloyds to pay for a pre-election giveaway.
“We could also pledge to spend that windfall.
“But - just as with the 3G mobile phone auction - we will commit instead in our manifesto to do the responsible thing and use any windfall gain from the sale of bank shares to repay the national debt. That will be Labour’s choice - fiscal responsibility in the national interest.”
He also says that “Labour cannot promise to reverse every spending cut by the coalition” but I imagine that doesn’t mean they’ll stop opposing every single cut.
Another concrete policy from Labour’s conference has been on tuition fees. Interestingly, they seem to be supporting the new system - which resulted from the Browne Report that they commissioned - but with a £6k instead of £9k cap (or uncapped as Browne recommended). I’m surprised they didn’t try to cash in on student votes by scrapping fees (which they introduced) or introducing a graduate tax (this is essentially what the new system is, but a proper graduate tax was judged unworkable). Personally, I can’t see students being impressed by Miliband’s pledge to only double, rather than treble, the cap. But the fact that this change in cap would make no difference to the amount most students will actually pay back only goes to show - again - how badly the new system was packaged and presented. What kind of marketing is it to have a price-tag higher than what the customer will actually end up paying back?