Firstly a small recap. The last Labour governments, under Tony Blair and Gordon Brown, lost control of spending and in an unprecedented inept profligate splurge wasted hundreds of billions of pounds. There wasn’t enough tax income to pay for this so we borrowed like crazy, saddling this country with immense debt that will take decades to pay off and which are costing as much as education costs us in interest payments.
Enter George Osborne who has done the only thing possible in increasing taxation to increase income whilst cutting spending (the so called plan A). It is called balancing the books. This involved lots of hard decisions. But then we live in difficult times and there really is no more money. Osborne’s approach has been widely praised by any economist with any credibility, such as the IMF. It is only the occasional deficit denying nutter who has suggested anything else. One of which is Ed Balls, who wants to continue the profligate spend that got us into this trouble in the first place (the so called plan B).
Now obviously Ed Balls’ ideas are totally discredited and would not work. Not only that, Osborne’s policies can be seen to be working. Steering the supertanker that is our economy away from the precipice is a mammoth task, but we are getting increasing signs that it is responding to the helm. This is leaving Balls with no ground to attack the coalition, it has become so obvious that he is wrong and they are right.
So now, suddenly and overnight Ed Balls has dragged the Labour party into a massive policy switch, from the nutty left of politics to the right. He has, presumably on a whim, decided to back what is known as Plan A+. This was postulated by the IMF as a possible variation on what Osborne is already doing and consists of a temporary tax drop to stimulate the economy. To be effective you would reduce income tax on the poorest by raising personal allowances. The downside is that it delays balancing the books so leaves the government in a financial hole for far longer.
Now it is a simple fact that George Osborne is already doing this as much as he can, it is a matter of delicate balance. He is massively and permanently increasing personal allowances in this parliament, to Â£10,000, in a move that favours the poorest in our society. It is far, far more progressive than anything that Blair or Brown did in all their years in power. Yes, the Conservatives are looking after the poor better than Labour did. Which is just as interesting as seeing Ed Balls drag the Labour party so radically to the right.
So we have a Conservative party that is to the left of Labour in looking after the poor and a Labour party that is suddenly to the right of the Conservatives on handling the deficit. Presumably Ed Milliband will be calling for the return of public hanging at Tyburn next.