Johnson begins the attack

After the defeat of the general election, and the necessary internal campaigning to select our new leader, it feels good to see Labour out on the attack again. I know some will say Ed Balls took us on the attack already, but there was always a faint smell of electioneering going on there, especially when the shadow cabinet posts were all interim ones.

But today Labour are on the march again. Taking the fight to this shambles of a coalition with Alan Johnson leading this particular charge. Johnson gave a speech today in the City of London where he began to outline Labour’s alternative to the Government’s ideologically driven cuts to the economy.

AJ made one last attempt to urge the Government to reconsider their plans to push through £83 million of cuts over the rest of the current Parliament. He went on to confirm that the first piece of Labour policy of the Miliband era is to stick to its original plan to halve the deficit over the next four years as opposed to eliminating it in five years, while making a change to the balance between taxation and spending. Under Alistair Darling, that balance was going to be 66% of the reduction from cuts and 33% from taxes. Johnson has said today that 60%-40% was

“about the right balance.”

He went on to say that he was ruling out any further increases in personal taxation, while looking at making targeted tax changes to aid economic growth. Part of this would be making banks take a greater share of the nation’s tax burden to cut the deficit. This will probably take the form of a further tax on bonuses, as instigated by Alistair Darling, and in conjunction with increases to the banking levy. This bank levy would allow Labour to alter the balance closer to 50% tax and 50% cuts. Johnson also said that Labour would support the rise in capital gains tax.

When talking about the reality of the numbers of cuts, the Shadow Chancellor said:

“[T]here is another way, a balanced approach that gets the deficit down, but recognises that growth and jobs are not a sideshow to an economic strategy, they are what it is for. And that approach requires thinking again about the role that capital investment plays and prioritising it. Without growth, attempts to cut the deficit will be self-defeating. A rising dole queue means a bigger dole bill. And less tax coming in. The Tory plan, for all its Liberal Democrat cheerleaders, is a huge gamble with growth and jobs.”

With the pledges not to increase personal taxation and to work with the Government on welfare reform where it could, Johnson wasn’t going for outright automatic opposition to everything the coalition announces on Wednesday, but with popular measures such as increasing the taxes of those who can most afford it, Labour is giving itself the political ability to oppose specific measures, campaigning against the harsher cuts.

Economist Ed Miliband knows that if he had not altered the balance of deficit repayments, he would have been caught in the trap of being asked where he would make savings instead. By altering the balance to a possible 50-50, Labour can now campaign without being labelled unrealistic. It seems that Miliband and Johnson are beginning to retrench the party’s policy and retake the centre-ground, setting themselves up nicely for the battles ahead.


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