What a day for news, eh? Even overlooking Jo Yeates’ (apparent) killer being arrested, we’ve had an onslaught of political news over the past 24 hours, including Andy Coulson quitting Number 10, Tony Blair being hauled in front of Chilcot again, an apparently legendary battle between George Galloway and Alastair Campbell on Newsnight, and, finally, Alan Johnson resigning as Shadow Chancellor and being replaced by Ed Balls.
History may record this as the worst job move in some time.
You see, while I wasn’t a fan of him as Home Secretary (as all recent Labour HomeSecs, he was terrible, including the David Nutt debacle) and I made jokes about Johnson admitting that he would have to read Economics for Dummies after being appointed Shadow Chancellor, I was somewhat supportive of his role there. For one, it diffused tension between Balls and his wife Yvette Cooper. Johnson also gave an air of willingness to learn. Johnson’s resignation also seems unfair, as he’s paying a price to avoid the press attacking his wife. And finally, unlike Ed Balls, he’s not a “deficit denier”.
I don’t get this term, to be honest. It either implies a) there isn’t a deficit, or b) there is but we shouldn’t try to close the gap. Obviously, a) is completely wrong. The United Kingdom, like nearly every other country, runs a deficit, and so co-operates in the dance of lending and borrowing to other countries. For b), it’s less worrying, but still outside the political orthodoxy: all three major parties agreed to a cut in spending once we were out of recession, even Labour (although this is sometimes forgotten due to the virtues of being in opposition).
I may not be an economist, but I get that opposing closing the deficit to reasonable levels is a careless move, and dangerous for a (Shadow) Chancellor to believe. While it’s fine to run a deficit when the country is in a recession, it isn’t really good to do so when it isn’t. Yes, we ran a deficit in the 1940s and ’50s, when we set up the NHS. But that was in the immediate post-war period, when we needed to spend the money to rebuild the country and we owed the money to less belligerent countries such as the U.S.. Now, we owe the money to other countries who aren’t as friendly. While these countries, such as China, don’t really want to stop lending for fears of reprisals, it doesn’t do well for the health of the economy.
I get the opposition to cuts, I really do. Personally, I would’ve increased the tax rate on very high earners (say, £150,000+) to 50% to help plug the hole, as Labour, and cut spending away from education, health, and top-line public services (instead, getting rid of Trident, and decriminalising some drugs which cost a fortune in policing). But there are, after all, only three ways to plug the hole: more taxes (risky), less spending (risky), or printing more money (very risky).
Still, this development makes me less likely to support Labour (as a second preference, if AV passes). It shows another way in which Labour kowtow to the big unions instead of representing the middle class Miliband (and Clegg, and Cameron) claims to support. Deficit denial doesn’t help anyone at all.
Edit (5 Feb 11): It turns out, Ed Balls is a deficit denier of the first variety. Which is so far in fantasy land that even independent fact checkers have told him “don’t be stupid, you silly little man”.