After Next Week's Budget, We Must Expose the Chancellor's Record and Make It Stick

11/03/2016 08:51

In five days, the Chancellor will deliver his eighth budget. He will be six years into his job. We already know that in almost every paragraph there will be a reference to "Labour's recession"/"clearing up Labour's mess"/"13 years" All designed to deflect from his own choices and decisions and to put the focus back on the last Labour government.

And all in the Labour movement will reflect on that, as we have always done since we entered opposition, because we do have to work out how to regain the trust of the electorate on the economy so that they will allow us to govern the country again. We have to craft an alternative that the public can believe in and trust us to deliver.

But we also have to expose this Chancellor's record AND make it stick. And on the Chancellor's record, it's this second bit, the making it stick, that we have struggled with since 2010. Its not for want of trying or lack of effort. But before you can successfully expose a record, you have to wait for there to be record. And you have to allow for a long enough period of time to let the Chancellor do what he said he would; for him to succeed or fail on his own terms. (Even if politicians don't want to do this, the British public do). But the Chancellor has now been in his job for long enough, he is failing on his own terms, and we finally have an opportunity to not only say it (loudly, and on repeat) but to make it stick.

Next week, the Chancellor will point to GDP growth (sluggish, but he probably won't mention that), low unemployment and a budget deficit which is going down. But beyond that we have a lot to go at on the economic front. The Chancellor may be fixing the roof, but he, more than anyone, knows he is on shaky economic foundations.

Why? Because our economic recovery is overly dependent on consumer spending and services, the kind of growth that George Osborne himself said he didn't want. We are having a B&Q bounce-back. According to the ONS we splurged on furniture and furnishings in the last quarter of 2015 and in so doing propped up the nation's finances.

Stronger economic foundations would be based on increasing our exports. But the Chancellor's export strategy is a sorry tale of woe. By 2020 we're supposed to have doubled exports and increased the number of exporters by 100,000. But exports have only increased from £497,079million in 2011 to £511,213million; the number of exporters fell by 7,500 from 2013 to 2014; the value of Export Finance Guarantees has fallen; and UK Trade and Investment (UKTI) is being "transformed" and "refocused" as of January this year because basically its unfit for purpose.

Emerging markets are obviously key and if we're actually going to succeed in getting their citizens to buy the stuff our citizens make then the government should at least know how many and which countries are in this group so that all efforts can be focused properly. But a National Audit Office report showed that the Foreign Office focused on 29 emerging priority markets; UKTI looked at 20; and the latest announcement in January determines that the magic number is 50. Good luck to anyone, particularly would-be exporters, trying to find out exactly which countries our government is targeting.

Perhaps the government doesn't want us to see the full scale of the disaster? Maybe they don't want us to notice that the FCO business plan in 2012 highlighted India, Kuwait, Qatar, South Africa, Turkey, Brazil, Mexico, Pakistan, Nigeria, and Colombia as countries where we would double trade by 2015; a task that we are on track to complete in exactly none of them.

Not surprisingly since our exports are so weak our trade balance is enough to make anyone wince and the size of the other deficit - the current account - is unprecedented. The OECD Forecast shows that as a percentage of GDP we have slipped from 22nd from bottom to fourth from bottom between 2011 and 2014. Thank goodness for South Africa, Turkey and Colombia who occupy the bottom spots in the table of 44 countries looked at.

Our economic foundations are shakier still when you consider that our productivity is 14% below the level that would have been achieved if pre-crisis trends had continued and in 2014 we were 18% points below the average of the rest of the G7 countries.

And it's not as if there aren't comparable advanced economies who are managing to sell stuff abroad. And it's not like there aren't policies out there that come under the category of 'no brainer'. If we want to make more stuff and need more skilled engineers to do it then we had better make sure we train them. As it is, the number of engineering degrees awarded has gone up - but three-quarters of the increase has been to students who will not have the right to stay here when they graduate. That's not no-brainer policy making, that's brainless policy making. If I had a billion quid to play with I'd spend it on measures like this to help with rebalancing the economy rather than tax changes which arguably put more money in the pockets of households who are already doing more than their fair share of propping up GDP growth.

The Chancellor is a smart man who managed to successfully sell the lie that the global economic recession was Labour's recession. He managed to successfully spin the line that the only measure of economic competency was the budget deficit. But this smart man knows that his luck is about to run out; his record is about to be exposed. It's not for nothing that he started the year (and in every public pronouncement since) warning about the Global Economic Cocktail Of Risk. He's clearly hoping that this will deflect attention from the failures and the weak foundations of the Long Term Economic Plan.

So the question for Labour is will we let him get away with it? The Chancellor wants to argue that only Labour politicians can affect the economy; on his watch it's global forces. In doing so he plays into a narrative that many people can relate to, which is about how little control they feel they have in their everyday lives. It's an easy pitch to make if we let him. The argument we have to make next week therefore is not about the detail; it's not even about austerity. It's about who's in charge. If we let the Chancellor shrug off that responsibility, then he will win the economic debate again.

Shabana Mahmood is the Labour MP for Birmingham Ladywood