Playing for the highest stakes

Whenever we journalists describe something as a "political gamble," or even a "huge political gamble," I sometimes think we need to go and take a lesson in the avoidance of cliché.

The fact is, all political decisions require an assessment of the balance of risk, and in that sense, all political decisions are gambles to some extent or another.

Delaying the general election until moreorless the last possible moment was a gamble for the then Prime Minister Gordon Brown, for instance.

He was gambling on the fact that the economy would pick up sufficiently before 6 May to show the electorate that his prescriptions were working. It wasn't that far away from coming off.

The gamble unveiled by Chancellor George Osborne in his first Budget on Tuesday, however, was of an entirely different order.

This wasn't just a gamble with his own future, or that of the Con-Lib coalition. It was a gamble with the future of the whole country and the jobs and livelihoods of millions of its people.

The debate over the Budget has thus far focused on two issues. First, whether it could reasonably be called "fair" and "progressive," and secondly, whether or not the £40bn extra spending cuts and tax rises were avoidable.

All I would say on the first point is that it depends how you define fairness. Some will say that the rise in VAT to 20pc is fair because it will affect everyone in the same way, while others will say it's unfair because it will disproportionately hit the poor.

The more illuminating debate surrounds the second point – whether this Budget was indeed unavoidable, or whether these cuts are at least in part ideologically motivated.

As I noted last week, the government's attempts to lay the blame for the cuts at Labour's door has aroused the opposition from its post-election slumber and forced it to stand by its own, more limited deficit reduction plan.

The really difficult thing is that no-one knows who is right about this. There is no clearer consensus among the economists about how fast the deficit should be cut than there is among the politicians.

In short, it's a case of suck it and see. We will only find out the answer once we have been there and done it.

Whatever the outcome, it is no exaggeration to say that the politics of the next decade and beyond will be shaped by it.

If Mr Osborne's strategy works, and he succeeds in bringing down the deficit without causing another recession, then David Cameron will almost certainly win a second term and probably, this time, with an outright majority.

But if it he is wrong, the current political status quo will be transformed

The coalition's political honeymoon will come to a swift end, and Mr Brown will start to look not so much like a failed leader as a lost leader, or a prophet without honour in his own country to use a Biblical analogy.

A vindicated Labour Party would then be on course for a victory at the next election every bit as crushing as the one it achieved in 1997, four years after the last Tory government's claim to economic competence was swept away by Black Wednesday

The Conservatives could be out of power for another generation, while their Liberal Democrat collaborators may well be wiped off the political map entirely.

While some on the left might welcome this apocalyptic scenario on the grounds that it would be good for the fortunes of the Labour Party, the cost in terms of human misery would surely be too great.

For that reason, we'd better all hope that Mr Osborne's great gamble does indeed pay off.

Labour's would-be leaders must not stand for this

And so at last the real cutting begins. A new hospital in Hartlepool. A business loan that would have guaranteed hundreds of jobs in Sheffield. A huge modernisation programme for libraries.

All gone in a flash, along with another £2bn worth of projects apparently approved by Labour in its last few months in office, though in the case of the hospital, it seems to have been in the pipeline for rather longer than that.

And at last, too, some real passion from Labour in opposing the Con-Lib coalition's programme of cutbacks - both from Liam Byrne on the floor of the House on Thursday, and later from David Miliband in the BBC studios.

The defeated party finally found its voice as Mr Byrne, the man who came close to making it a laughing stock with his 'sorry, there's no more money' note to his successor, managed to redeem his own somewhat battered reputation.
The shadow chief secretary told Lib Dem opposite number Danny Alexander: "The country....will be aghast at your attack on jobs, your attack on construction workers, your attack on the industries of the future and the cancellation of a hospital.

"In five minutes this afternoon you have reversed three years of Liberal Democratic policy of which you were the principal author. What a moment of abject humiliation."

Mr Miliband went even further, when invited onto the BBC's Newsnight that evening to discuss the cuts - in particular the cancellation of the £80m loan to Sheffield Forgemasters.

"We were looking to facilitate a genuine industrial revolution in the North of England. It's been thrown away by an act of gratuitous economic vandalism," he said.

The sense of outrage that finally welled-up from senior Labour politicians this week has been long brewing.

As I wrote last week, the government is making a very determined effort to construct a political narrative in which "irresponsible" Labour is blamed for wrecking the economy and leaving a mess for the coalition to clear up.

It is, however, in danger of gilding the lily - just as New Labour's own 'repeat messaging' of its achievements ultimately caused people to disbelieve everything it said.

Indeed, the new Office for Budget Responsibility this week found that, far from being irresponsible, previous Chancellor Alistair Darling had been too cautious in his borrowing forecasts, and that it will actually be £22bn lower over the next five years.


Some of Labour's leadership contenders have appeared reluctant to defend the previous government's record, two of them even claiming they were against the Iraq War even though they were government advisers at the time.

But rather than let the coalition traduce its economic legacy and use that as a justification for cuts, Labour needs to take the fight to its opponents.

Sure, the Brown government was not perfect. But it was doing no more than following classic Keynesian economic theory - that you stimulate spending to achieve recovery, then wait for tax revenues to eat into the deficit before making cuts.

I for one am pleased that at least one of the contenders is prepared to defend that perfectly respectable position.

One of the main criticisms against David Miliband as a leadership candidate has been that he is simply too cerebral, that he lacks the moral passion to energise a movement which Harold Wilson rightly termed "a moral crusade or nothing."

Well, on Thursday night, we saw the South Shields MP try to answer some of those criticisms.

Some called his Newsnight performance a "rant." Some even questioned his fitness for office. But for me, it was no more than a recognition of one of the iron laws of politics.

Namely, that before you can be Prime Minister, you have first to make a success of being Leader of the Opposition.

Where is the mandate for 'Canadian-style' cuts?

Are the Tories economic saviours - or are they just opportunistic ideologues using the deficit crisis as an excuse to finish Thatcher's work. Here's today's Journal column.

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One of the shortest-lived and least successful political advertising campaigns of recent times was Labour's general election poster featuring David Cameron as fictional 80s TV cop Gene Hunt.

"Don't let him take Britain back to the 1980s," said the catchline, as the Tory leader was depicted astride Hunt's famous red Audi Quattro.

The campaign, which was swiftly pulled, ignored two important facts. Firstly, most people thought Gene Hunt was quite cool. Secondly, many would jump at the chance to go back to the 1980s were it really possible.

For all the bitter folk-memories of the 1984/5 miners' strike, unemployment topping 3m in 1981 and the Toxteth and Brixton riots that summer, it was an altogether gentler age than the one we live in now.

If anyone is in any doubt about this, Mr Cameron's speech on Monday in which he sought to prepare the public for spending cutbacks the likes of which have never been seen before ought to disabuse them of it.

Lib Dem leader and Deputy Prime Minister Nick Clegg is insistent that it won't mean a return to "Thatcher-style policies," and he's quite right. It’s going to be far worse than that.

For all that the Tories still worship the Iron Lady as the premier who began the rolling-back of the state with her 1980s privatisations, there are some parts of the public sector she would have never dared touch.

That is emphatically not the case now. The message coming out from Mr Cameron and Chancellor George Osborne is that no item of public expenditure can now be considered sacrosanct.

Is this a bad thing? Well, not necessarily. All parties are agreed after all on the need to reduce the country's £156m budget deficit, and however many reviews of government 'waste' are carried out, it seems there are always new savings to be found.

But for me, the biggest question mark against the government's plans to adopt the 'Canadian Solution' and radically shrink the size of the state concerns its lack of political legitimacy.

It should not be forgotten that the Tories did not win an outright majority at the election, and that most people who voted Lib Dem certainly did not vote for huge public spending cuts.

While the coalition partners can claim a strong policy mandate in areas such as civil liberties where they fought the election on similar ground, that was decidedly not the case when it came to economic policy.

History is written by the winners, of course, and the government is already busy constructing a political narrative which seeks to justify the drastic economic remedies it now proposes.

Gordon Brown's government, we will be told again and again over the coming months, has left the country practically bankrupt and on the verge of 'doing a Greece.'

It already seems forgotten that Mr Brown's additional spending 'stimulus' designed to get the economy moving again in 2008/09 was met with widespread public approval at the time.

Such rewriting of history is nothing new. The Tories ensured the Callaghan government was remembered not for repaying the 1976 IMF loan within two years and stabilising the nation's finances, but for the Winter of Discontent.

What, if anything, have Labour's five leadership contenders got to say about all this?

Well, the fact that they have thus far been uncharacteristically muted in their criticisms of the coalition's plans goes to show how far it has already succeeded in shifting the terms of the debate.

The truth is that the deficit crisis has presented the Tories with a chance to do something some of them have wanted to do for decades, and take the axe to large parts of the state.

Is it the harsh medicine the country needs? Or is it rather just a blatant piece of ideology-driven opportunism?