Tribune leader, 20 November 1992

There is, of course, plenty in Norman Lamont’s public spending plans, an­nounced in his autumn statement last Thursday, with which Labour can make hay. It will give little in the way of a boost to the economy, as Mr Lamont’s own growth projections testify. He decided not to increase taxes or borrowing but to stick to the public spending target set months ago by the Treasury. As a result, every pound of extra spending on one scheme is paid for by cutting spending elsewhere.
Spending will decline in real terms in several crucial areas: local government, the National Health Service, defence, ed­ucation and training, transport, legal aid and overseas aid. Because of inflation, the public sector wage freeze of 1.5 per cent next year is a programme of vicious pay cuts for some of Britain’s worst-off workers. Millions will feel the pinch of Mr Lamont’s measures.
In line with the general modesty of the statement, most of the positive elements of the package are not as positive as they might have been. The relaxation of the constraints on use of money from council-house sales should have covered past re­ceipts – all £5,000 million worth – as well as those for the period between now and the end of next year.
Similarly, Mr Lamont could easily have relaxed the Treasury rules on capital spending much more than he did and giv­en British Rail freedom to lease-buy trains where it needed them rather than arbitrarily limiting the concession. Mere generally, the measures in the autumn statement relating to transport favour read over rail, which is a ludicrous poli­cy, both on environmental grounds and because the railways have been starved of investment for so long.
Add the small scale of the tax-breaks for investment, of the export guarantee cover and of the direct intervention in the housing market, and it might seem that Labour should have no problem in savaging the Government’s plans.
But it is not quite as simple as that. Whatever the many faults in Mr Lamont’s approach, there is also no doubt that he has stolen many of Labour’s best econom­ic policy ideas: interest-rate cuts, tax breaks for industrial investment, an end to car tax, lease-buying of trains, direct intervention in the housing market, free­ing of right-to-buy receipts.
That puts Labour in a difficult position. In economic policy, big differences in de-gree are differences in kind, and Labour’s recovery package, announced last week by Gordon Brown, is significantly larger than Mr Lamont’s exercise in trying to have it both ways.
But it will do Labour’s credibility on the economy no good if it appears that all the party can say about most of the Gov­ernment’s economic policy is that it would do the same only more so (or less bo in the case of spending cuts and con­straint).
It was Labour’s failure to convince many working-class voters that its alter­native economic policy really would make any difference to their lot that lost the party the last general election. After Mr Lamont’s big steal, Labour has an even bigger problem than it had in April in differentiating its approach from that of the Tories. More than ever before, Labour desperately needs an injection of radical new ideas.
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