THE BLOG

The State of British Debate

14/04/2015 11:38 BST | Updated 13/06/2015 10:59 BST

The Labour Party Manifesto has produced some very good, much needed ideas: raising the minimum wage to £8 an hour, the creation of a British Investment Bank, providing more free childcare, instituting a jobs guarantee, and guaranteeing apprenticeships for school leavers. These policies are much to be praised, although they could go further, that should help the British economy and British people.

However, the state of debate in this country is so poor that the very first line of the manifesto is a "budget responsibility lock," which promises that "every policy" in the manifesto is "paid for" with no "additional borrowing." The budget deficit will be cut "every year" and a surplus will be reached "as soon as possible in the next parliament."

This budget promise is even before Ed Miliband's forward and the page of contents, showing the obsession British politicians have with abstract financial statements. This paints the picture that we will solve the real problems facing us, only if we can satisfy some self-imposed financial constraint. Not that Ed Miliband has much choice. If he were to first outline the actual policies Labour has, then he would be branded "fiscally irresponsible" by the Conservatives and their supporters. Instead, he must pander to the neoliberals, adopting their assumptions.

The reality is that the "budget responsibility lock" is rhetoric, and nothing more. Since the budget deficit is dependent on many factors--tax receipts, spending, the foreign sector--it is premature to promise a budget surplus. This is evident from the current Conservative governments promises to cut the deficit when they came into office. Suffice to say that the Conservatives have run a greater deficit in 5 years than Labour did in 13--their promises in ashes. However, this is not something to criticise. The Conservative government realised that if they were to achieve economic growth, they would have to sacrifice their supposed "fiscal responsibility." That is, they would have to run a budget deficit, as they did.

The point is this. Labour have made real policy promises, ranging from jobs to childcare. The budget deficit does not precede these policies, but will result from them. If Labour must spend more in order to achieve these policies, then so be it. Tax receipts will rise, and the budget deficit will be whatever it will be, without concern for any "locks." This comes from the fact that budget deficits are ad hoc accounting tools. In and of themselves, they do not mean anything.

Debate in Britain needs to change: deficits are not inherent evils that any "serious" politician must promise to eradicate before proposing anything meaningful.

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