We Must Take the Fight to The Coalition
Blog / August 27, 2010 / Comment now
This week, Britain’s most respected independent economic research institute branded George Osborne’s emergency austerity Budget as “clearly regressive”, saying that it would be the poorest families that would lose out most due to the Con-Dem Coalition’s tax and benefit reforms.
The Institute for Fiscal Studies is a charity. It does not carry out consultancy work; it isn’t part of a university or funded by a few politically partial donors. It is for this reason that the rebuttal of Deputy Prime Minister, Nick Clegg – who wrote off the IFS’s conclusions as “partial” – now cement ‘Cleggy’ as no more than the chief PR man to the most right-wing Tory government since Thatcher.
George Osborne labelled his Budget with the terms: responsibility, freedom and fairness. His Budget speech said that “everyone will be asked to contribute” and “everyone will share in the rewards”. The Institute for Fiscal Studies has said that tax and benefit changes between June 2010 and April 2014 will cost the poorest 10% of households £422.83 yet those earning at the top end will be only £339.12 worse off. This Budget is not asking people to pay their ‘fair share’, but asking the poorest in society to pay for the mistakes of the richest. In percentage terms, the poorest 10% will lose 5% of their income, whilst the richest 10% will lose less than 1% of their income.
The IFS report goes as far to say:
“Our analysis shows that the overall effect of the new reforms announced in the June 2010 budget is regressive, whereas the tax and benefit reforms announced by the previous government for introduction between June 2010 and April 2014 are progressive”. From this analysis it clear to see why Nick Clegg felt the conclusions of the report were partial; however the Institute for Fiscal Studies is not making a value judgement between Labour’s Budget and the Con-Dem Budget, it is rather stating the economic impact of one Budget against the other.
The Treasury’s response was to claim that the IFS had ignored “budget measures such as helping households move from benefits into work, and reductions in corporation tax”. This line of argument is a shocking throwback to the failed Tory economic ideology of the 1980s. It is the flawed belief that wealth will ‘trickledown’ to the poorest if only government can reduce the amount of tax big business pays. It is also laughable that the Con-Dem Budget contained measures to help people off benefits and into work. Britain is now facing record graduate unemployment, hundreds of thousands of public sector job losses, and support for industry – such as the Sheffield Forgemasters in Nick Clegg’s own constituency – wiped out. Burgeoning unemployment as a direct effect of this Budget will put the economic recovery at risk and resulting benefit payments will negate any increased tax revenue or economic growth.
It is worth remembering that David Cameron’s Conservatives – with the full backing of the right-wing press, millions of pounds of Ashcroft money and a Labour Party considered to be in disarray – failed to win a majority of seats and could only muster 36.1% of the vote. However, the Tories have been able to implement their smorgasbord of true-blue regressive policies courtesy of a Liberal Democrat party that actually lost 5 seats in the House of Commons in the General Election.
The Labour Party is at present considering its political lexicon in response to the Tory and Liberal Democrat coalition. Labour strategists are pondering the possible political advantage of Lib Dem attacks or Tory bashing. How we decide to rebuke each of the two parties will be crucial to our revival and future electoral success. Shying away from attacking the Lib Dems that are propping up the Tories in power and voting through each and every policy is misguided. As is a full-blown Lib Dem offensive which pays little heed to the Tory gang masters.
Instead, we must look at the short game and the long game. The Con-Dem Coalition is only in its infancy with the consequences of cuts yet to be felt in earnest. However, it is already plain to see cracks emerging in a growing number of Lib Dem MPs feeling ever more uncomfortable as the lobby-fodder for Tory policies. I know that my constituents do not want to see the effect of five whole years of Tory policies in a community only beginning to recover from the decimation caused by Thatcher.
Therefore we have to consider how best we can pull apart this marriage of injustice otherwise we will be letting down those people who voted for Labour’s progressive policies and neglecting our duty of Opposition. Many Liberal Democrats have taken solace in the promise of reform of the voting system. I have never been convinced by the merits of the Alternative Vote or for that matter Proportional Representation. I know that there will be many in the Labour Party who do believe in voting reform, however it cannot be the right time or the right circumstances now to work with this Lib Dem coalition partner to their own end. The greater need is the need of those people who we seek to represent that will lose so much if we fail to stop the regressive policies of this Con-Dem Coalition.
I want to see the Labour Party under its next Leader take the fight to the junior partner of this government and show itself to be a strong committed opposition fighting tirelessly in parliament for the most vulnerable in society. Every effort must be made to destabilise this government and pull it apart at the seams. Pressure must be put on each and every Liberal Democrat MP in their constituencies and they must be made to face up to the real life impact of the policies they are supporting. Pressure must be applied in parliament where the Labour Whips can ensure we organise a gruelling schedule of late-night sittings when it is possible to do so – for instance on issues of constitutional reform. And a newly invigorated Shadow Cabinet that will face down the Con-Dem coalition from morning ‘til night on television and in the press.
If five years do pass and this coalition still remains then its regressive policies will have made an indelible mark on society. At this point we would face a General Election and our strategy would be determined by how best to beat a heavily discredited government. For now, we must fight with optimism to prevent the destruction of our communities and the destruction of our young people’s future by tearing down this marriage of injustice.
