Labour will turn things around and deal with the deficit in a fairer & more balanced way – my Tribune column

After three years of falling living standards and a flatlining economy it’s clear that this government’s policies have failed. Britain desperately needs a change of direction now. But the longer David Cameron carries on like this the more difficult the challenges will be for the next Labour government. These are the three key arguments Ed Miliband and I made in our speeches last week.

First, the backdrop to this month’s spending review is this government’s economic failure. While the very highest earners have been given a tax cut, for ordinary people life is getting harder. Prices are rising faster than wages, the economy is flatlining and long-term unemployment has reached levels not seen since the Tories were last in power. And this is why the government isn’t even succeeding in getting the deficit down.

Second, we need a change of direction now. The purpose of the spending review should be action to boost jobs and growth this year, next year and the years after. Action now on growth is the best way to mitigate the scale of the cuts the government says it has to make to public services in 2015-16 and beyond.

With thousands of construction workers out of work and interest rates at record lows, investing now in improving our infrastructure would give an immediate boost to the economy, encourage more private sector investment, and give us a long-term return as we strengthen our economy for the future.

For instance, if the entire infrastructure boost recommended by the International Monetary Fund was spent now on housing it would allow the building of around 400,000 affordable homes across the country, and support over 600,000 new jobs in construction, including 10,000 apprenticeships.

But my third argument is that we cannot rely on George Osborne to see sense and so Labour must start planning now for what will be a very difficult inheritance in 2015.

We will need to have an iron-discipline on spending and a relentless focus on our priorities. We will inherit tough day to day spending plans for 2015/16 and they must be our starting point. But we will make difference choices from this government. We will have to find efficiency savings and switch resources to Labour’s priorities and that means answering big and immediate questions for 2015 in our manifesto.

With primary school places in short supply in many parts of the country, and parents struggling to get their children into a local school, can it really be a priority to open more free schools in 2015 and 2016 in areas with excess secondary school places?

With family budgets stretched and living standards falling, surely it makes sense to introduce a mansion tax on properties worth over £2m to pay for a lower 10p starting rate of tax?

And as Ed Miliband argued in his speech on Thursday, social security spending cannot be exempt from that iron discipline.

So we are setting out reforms that are rooted in Labour values – a compulsory jobs guarantee for all those who can work, doing more to tackle low pay so that taxpayers aren’t picking up a growing bill, shifting spending from housing benefit to bricks and mortar and steps to better reward contribution even when there’s less money around.

We support the triple lock on the state pension, but any long-term fiscal plan to monitor and control structural social security spending must look at overall spending on pensioners and the impact of an ageing society. That’s why we have supported increases in the retirement age as people live longer and said that, when the NHS and social care are under such pressure, it cannot be a priority to continue paying the winter fuel allowance to the richest 5 per cent of pensioners.

And finally, we will also need to set out plans to invest in the infrastructure we need to strengthen our economy for the years to come and identify the right priorities for investment like new homes.

Our task is to show we can turn things around on growth and living standards and deal with the deficit in a fairer and more balanced way. Where this government’s failure on living standards, growth and jobs has led to their failure on the deficit, Ed Miliband and I are clear that the next Labour government will get things back on track to finish the job.

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Posted June 14th, 2013 by Ed