What is Labour's Economic Policy?

Generali

LauraW10 wrote: »

So the current mess in US finances is due to the folly of whom?

President Bush for starting wars he didn't have the means to pay for and President Obama for continuing them in simple terms.

LauraW10

Generali wrote: »

Right but that wasn't where Labour spent money. They spent it on a massive scheme of redistribution of income via the tax credits system and on large pay increases for public sector employees.

Labour did spend a lot of money on infastructure.

But lets look at what really happened.

Conservatives believe Gordon Brown should not have run a spending deficit before the crash of 2008. He should have ‘fixed the roof while the sun was shining,’ as the Conservatives like to say. But this theory ignores the reality.

From around 2001, British businesses had started hoarding their cash rather than investing it domestically. The UK wasn’t alone in this, even Ben Bernanke said that:“many advanced economies… face an apparent dearth of domestic investment opportunities”. Labour ministers worried that the economy was heading for a ‘soft landing’ or maybe worse. Given that the UK’s debt level was at historic lows, a decision was made to invest money in public services to make up for the drop in business investment, and increase the UK’s long-term growth potential (investing in schools).


If Labour hadn’t spent that money, unemployment would have edged up and tax revenues down – so they would have faced a deficit anyway. Had Labour tried to be ‘fiscally responsible’ then, by cutting spending, unemployment would have inched higher anyway.


In fact, Adam Lent himself argued last year that the UK had been in good shape before the crash hit. So what would you conservative have done instead?


Here’s the other obvious point: even if Gordon Brown hadn’t spent that money from 2002, the impact would have been minimal. Debt as a % of GDP went from 29% to 36% or so, but was still well below western average.
The impact of the crash and credit crunch was unprecedented: unemployment shot up and tax revenues collapsed and debt levels shot up. There is very little any government could have done to prevent that.


Nevertheless, it’s clear that Osborne’s narrative (even though Conservatives planned to match Labour spending until 2009) prevailed with the public, thanks to a compliant media. The Lib Dems also developed collective amnesia about their deficit reduction plans (much closer to Labour than Conservative plans) and started castigating Brown after they signed the Coalition agreement.


I will say this Labour did not spend all its money wisely and made plenty of costly mistakes (IT projects, PFI projects).


So come on what would you do differently?

Generali

LauraW10 wrote: »

By the way London votes Labour.

Not always.



In the 2010 General Election, the Tories got 34.2% of the popular vote in Greater London, Labour 33.5%. Labour got a few more seats (28 vs 34) but that's hardly a massive win. As the Lib Dems got 7, the current coalition members got more seats than Labour too.

I realise that for your Labour buddies this simplistic crap works but it doesn't wash when you deal with people who are slightly more sophisticated. It's just like this derision of Tories as being 'posh boys'. If it was only the middle classes voting Conservative then they would never form a Government!

LauraW10

Generali wrote: »

Not always.



In the 2010 General Election, the Tories got 34.2% of the popular vote in Greater London, Labour 33.5%. Labour got a few more seats (28 vs 34) but that's hardly a massive win. As the Lib Dems got 7, the current coalition members got more seats than Labour too.

I realise that for your Labour buddies this simplistic crap works but it doesn't wash when you deal with people who are slightly more sophisticated. It's just like this derision of Tories as being 'posh boys'. If it was only the middle classes voting Conservative then they would never form a Government!

My point was that it's not just northerners that vote Labour.

I don't think my posts are simplistic? Are you suggesting that your posts are sohisticated?

The Tories are just a bunch of posh boys, no question about it.

Generali

LauraW10 wrote: »

So come on what would you do differently?

Not introduced tax credits, an expensive redistribution of income.
Not given public sector workers huge pay rises with no increase in productivity. IIRC, for the first time on record, Government productivity fell under the last Labuor Governments.
Not gone to war in Iraq and Afganistan. (total cost > £20,000,000,000 link).

Generali

LauraW10 wrote: »

My point was that it's not just northerners that vote Labour.

You probably should have said that then. Instead you said, "London votes Labour".

coastline

Generali wrote: »

Right but that wasn't where Labour spent money. They spent it on a massive scheme of redistribution of income via the tax credits system and on large pay increases for public sector employees.

If I remember correctly the salaries in the likes of hospitals needed to be upgraded because they were struggling to attract people..
As posted earlier...whos to say the Tories had the balance correct on general spend when they attempted to run it at 30% net debt to GDP.
The people I know who work hands on in local government were saying many areas had been run down in the 1990s...this was evident when all social housing was upgraded then of course schools and hospitals were improved.
Labour increased spending up to 35% net debt to GDP...which is a bit more than the Tories from the years 2000-2005...that amounted to around £100bn more on the national debt. ??.
When the financial crash hit the deficit surged...something no government could have avoided...the constant stream of words calling it Labours mess is directed at the whole affair ...when really its all about what %spend to GDP should be reckonised.
So what do we do....set fixed targets for %spend to GDP or simply try to run a balanced budget...and as we know theres only been 5 in 40 years...
Will that solve the problem...hard to tell...this idea of rainy day money doesn't exsist as all income is spent...I'm sure theres plenty of waste in the public sector but so far we've only had cuts across the board...when are they going to find some genuine savings...maybe they can't find them.

Same charts every week..

http://www.ukpublicspending.co.uk/spending_chart_1990_2011UKp_12c1li011mcn_G0t

http://www.flickr.com/photos/hmtreasury/5260056945/

Generali

LauraW10 wrote: »

I don't think my posts are simplistic?

Really. Good for you.

LauraW10 wrote: »

The Tories are just a bunch of posh boys, no question about it.

It's like shooting fish in a barrel.

Wookster

Generali wrote: »

President Bush for starting wars he didn't have the means to pay for and President Obama for continuing them in simple terms.

Not to mention Dubya's tax cuts for the very very very wealthy.

homelessskilledworker

The electorate need a Labour Government next election, and once and for all we will all know that you cannot spend your way out of the mess we are in.
I predict a winter of discontent or worse in the term of a next Labour Government.