Mirror article by Ed Balls, Shadow Chancellor of the Exchequer - 24 January 20112011 is going to be a critical year for the economy. Growth is again in the balance and millions of jobs, businesses and homes are again under threat.
We’ve been here before. Three years ago we faced the meltdown of the world’s banking system, and the worst recession in a century. In the 80s and early 90s, we lived in constant fear of the next economic storm.
What matters most when times are hard is whether the government is trying to shield you from the storm, or leaving you to fend for yourself.
And what do people hear now from this Tory-led government? “It’s nothing to do with us,” says George Osborne, “It’s all Labour’s fault. You’re on your own.”
His attitude seems to be – if he’s not going to get the blame for anything that happens to the economy, why should he care?
When Osborne or his Lib Dem lackeys say: “It’s all Labour’s fault, we inherited a mess” and “There is no alternative”, what they’re really saying to the British people is: “We’re not ¬responsible: don’t ask us for help.”
So let’s destroy those myths, then start holding this government to account for the decisions they take.
THE Tories say that because Labour was not tough enough in regulating the banks, the economic crisis is our fault.
They forget that every time the Labour government tried to tighten regulation, it was the Tories who protested we were strangling enterprise with red tape, and David Cameron who accused Gordon Brown of being The Great Regulator.
Of course we should have been tougher, but the truth is that – however tough our regulation was in London – we couldn’t have stopped British banks investing in American banks which were up to their necks in bad mortgages.
That’s why what we really needed was an international system of financial regulation and an international crackdown on bad banking.
We spent 10 years trying to make that happen, and warning about the consequences of failure, but other countries would not agree.
Since George Osborne took over, he has not only let that international agenda fall apart, he has failed to renew Labour’s £3.5billion tax on bank bonuses, and dropped our legislation which would have forced banks to be transparent about their pay.
THE Tories want you to believe Labour spent too much money on services like schools, hospitals and the police, and that is why we have today’s budget deficit. That way they can justify drastic cuts in those services in order to bring down the deficit, and say it is all Labour’s fault.
They ignore the fact that at the time David Cameron vowed to match Labour’s spending plans pound-for-pound.
The truth is that, up to 2008, our debt levels were the second lowest of all major industrial nations. When the Exchequer received a windfall from the sale of the 3G mobile spectrum, we used every penny to pay down national debt.
When the financial crisis hit, we were badly affected by the loss of tax revenues from the City, and we had to inject huge sums of money to protect people’s mortgages and savings and stop the British banking system from collapsing.
On top of that, we cut VAT for a year, introduced the car scrappage scheme, funded apprenticeships and job ¬creation schemes, and subsidised mortgages – all to stop people losing their jobs, homes and businesses.
That is what caused the deficit, not spending on schools, hospitals and the police.
EVERY time they take an unpopular decision, the Tories say the same thing: it’s not our fault, we inherited a mess.
In reality, they inherited an economy which was beginning to recover strongly, with unemployment falling, interest rates at historic lows, and the public finances better than the Treasury’s forecasts.
Britain had weathered the economic storm of 2008 and was on track for jobs, growth and – with tough choices to support growth, spend less in some areas, and increase tax on those who could best afford it – a credible path to deficit reduction.
That is why Britain’s international credit rating was still Triple-A even before the better-than-expected figures for growth and the public finances came in last summer.
Instead of staying on that path, the Tories have deliberately and needlessly taken Britain down a different path with cuts that go too far and too fast, and tax rises which directly hit family budgets.
THE Tories say the decisions they’ve made are unavoidable. But they did not have to cut the deficit at this speed and scale. They did not have to cut jobs programmes, withdraw government investment from the economy or raise VAT.
They have made a choice, and it is the wrong choice.
There is another way – which puts jobs and growth first, just as Labour did in 2008.
Of course we don’t oppose every spending cut, but getting the economy moving again – with more people in work and paying taxes – is the best way to get the deficit down.
The Labour Party has a responsibility to stand up for millions of Mirror readers across the country who are already being hit by rising unemployment, rising inflation and the rise in VAT – with deep cuts to public services still to come.
That is why Ed Miliband and I are determined to expose the Tory myths and show that there is an alternative to the reckless, carefree gamble the Tories are taking with our economy.
George Osborne may not remember the economic misery of the 80s – he once said he could not even remember the miners’ strike.
But every time he repeats the mistakes of that era, every time he condemns another business to close, another job to be lost, and another home to be repossessed, we will be there and we will fight him every inch of the way.