There will be no big spending under Labour, Chris Leslie tells Robert Philpot and Adam Harrison
Chris Leslie is an improbable hate figure. With his affable manner and gentle northern accent, he is not obviously one of politics’ bruisers. Yet in June the Observer’s political columnist, Andrew Rawnsley, predicted that if Labour forms the next government, the shadow chief secretary to the Treasury is likely to be ‘the most hated man in the cabinet’.
‘Merely “the most hated man in the cabinet”?’ Leslie responds. ‘I thought it was “the most hated man in the country”.’ Indeed, the man who would hold the nation’s purse-strings in an Ed Miliband government admits to already feeling he is the target of a little animosity: ‘I think I’m already – how can I say this? – jarring with some of my shadow cabinet colleagues on some of the restraint that we’ve got to show.’
Labour’s early years in opposition were spent arguing that the coalition was going ‘too far, too fast’ in cutting the deficit, warning of the threat of double- and triple-dip recessions as a result, and urging the chancellor to adopt a ‘Plan B’. Suggestions that the party might itself have to cut spending if it were in government were muted. Leslie’s appointment as shadow chief secretary last autumn has led to tougher rhetoric alongside a greater willingness to take the fight to the coalition on the centrepiece of its economic policy. ‘We should be calling George Osborne out a bit more vocally about the fact that he really has had such a failure on deficit reduction,’ he suggests. Over the last two years, the chancellor has missed his borrowing targets, while over the last couple of months figures indicate that the deficit has started to rise again, Leslie charges. ‘I personally don’t see why people should trust Osborne and Cameron with a task that was initially their sole promise back in 2010. If they promised to do it in the last parliament and failed, I think it’s up to us to say: “We will do the task that they failed to do”.’
The ‘jarring’ with other members of the shadow cabinet Leslie detects is the result of his ‘zero-based spending review’: the line-by-line examination of the coalition’s current spending plans, the trajectories it has set, and Labour’s own future commitments. The chancellor, he says, has pledged he will cut spending sharply between next year and 2018 if the Tories are re-elected but has not backed that up with figures. ‘We are going to similarly have to have a very significant level of reductions in those areas of public expenditure which are not priorities,’ Leslie warns. ‘And the problem with having lots of priorities is that if we are going to do more in those areas that matter, it does also mean doing less in those areas that are lower priorities. This has to be a language about which areas are going to … get more or get less.’
Welfare is the area of the budget that Osborne has in his sights, and it will not escape Labour’s attention either. However, Leslie suggests that his approach will be different to that of the coalition. ‘You shouldn’t just be tough on welfare inflation,’ he argues, ‘you need to be tough on the causes of welfare inflation, if I can paraphrase somebody famous, and the causes of welfare inflation are not just unemployment and benefits … but also housing costs, in particular private sector housing benefit, and low pay and employment insecurity and the nature of employment today.’
Leslie drops strong hints that the ambitions of a number of his shadow ministerial colleagues are likely to be frustrated. He acknowledges the pressure for Labour to adopt a radical pledge to introduce universal childcare but, referring to the party’s commitment to use the bank levy to extend the entitlement to free childcare for three- and four-year-olds from 15 to 25 hours a week, he continues: ‘People haven’t picked up on the fact that we’re saying quite a lot on childcare already … Now that to me is a fully funded, fully costed way of showing the public that this is how we can pay for it in an acceptable way. I think offering more than that without saying where the money comes from would be an irresponsible thing to do.’
The shadow chief secretary also rules out any increase in national insurance to pay for social care. ‘I think the public want to see every ounce of efficiency and waste borne out of the existing services that we have for the Department of Health and elsewhere before you’d even countenance increasing the tax take from a pretty hard-pressed public. We’re talking consistently about the cost-of-living pressures people are under … How could you really make that point and go into an election asking ordinary working people to stump up more in those circumstances?’
But what about the ‘squeezed middle’ Miliband made the centrepiece of his early speeches as leader? Does Leslie agree that the fact that one in six taxpayers are now paying the 40p rate of tax – up from one in 20 when Nigel Lawson introduced the band in 1988 – is too high? ‘It’s certainly a very high proportion and it’s one of the stealthier tax rises that George Osborne has introduced,’ he responds. Many of his parliamentary colleagues are now reflecting on the fact that mid-ranking public servants have been dragged into the bracket. ‘These are not rich people who are affected.’ However, Leslie does not hold out much hope of relief under a Labour government. Raising the threshold, he argues, means finding the lost revenue from elsewhere. ‘We don’t have any particular proposals to change that at this time,’ he says.
Within the Labour party, however, it is the issue of public sector pay, not middle-class taxes, that is likely to be a flashpoint for an incoming government. In 2012 Ed Balls provoked the ire of the unions by suggesting that Labour would not be able to reverse the government’s public sector pay freeze. However, the party did not condemn July’s strikes over the issue. Does this position suggest that an incoming Labour government could find itself maintaining the pay freeze, while not condemning those striking against its own policy? Leslie defends Labour’s stance, suggesting that a pay freeze is the unfortunate price of protecting the jobs of frontline public sector staff. While avoiding what he believes to be the unhelpful ‘language of condemnation or support’, he also betrays his scepticism about the unions’ approach. ‘Industrial action like that, it can hurt the public and it can hit them quite hard so I think there are better ways sometimes to win allegiances among the public who are consumers of public services at the end of the day.’
For the left of the party, the public sector pay freeze is, though, made more intolerable by Labour’s continuing commitment to the renewal of Trident. If Labour wins with a small majority, or ends up in coalition with the Liberal Democrats, some believe it will be impossible for Miliband to resist the pressure to cancel it. ‘This is something that crops up from time to time,’ the shadow chief secretary suggests with a knowing smile. ‘We’ve said, and we’ve consistently said, that the need for a continuous at-sea deterrent is accepted within the Labour party.’ However, he continues, ‘there are various gateway staging-posts in the commissioning of Trident in [the] years ahead and all I would say is you can be absolutely certain that I am rigorously looking at all of the options and the costs on that, because when we say “zero-based review” we mean “zero-based review” – nothing should be just taken for granted.’
The fact that there is, as Leslie accepts, ‘a lot more scrutiny on [Labour] than there is on the Tories and Lib Dems’ underlines public suspicion about the party’s supposed high-spending instincts. It is this suspicion that the Tories will attempt to exploit by arguing, as Barack Obama did against his opponent in 2012, that the public should not ‘give the keys back to the people who crashed the car into the ditch’. Doesn’t Labour need, therefore, to improve its narrative about the past? While the shadow chief secretary dismisses the notion that it should admit it was a mistake to have been running a deficit going into the financial crisis – ‘a deliberate red herring by the Tories who want to try and distract attention from the true causes of the financial crisis’ – he acknowledges that ‘if we had known at the time that we were imminently going to have that global event hit then obviously we would have tried to take that into account but of course nobody knew that that was going to hit, no government in the world.’
Even that somewhat hedged admission goes further than many in Labour’s ranks have been willing to go in suggesting the last government may have been overspending before the financial crisis turned a stream of red ink into a tidal wave. The shadow chief secretary knows, however, that the stakes are high. ‘This doesn’t get said enough in the Labour party: there is nothing inherently leftwing about running a deficit, quite the opposite.’ The left’s model of collective provision of services is undermined by deficits because deficit spending ‘does not give confidence to the taxpayer that this model is correct. To retain trust in that collective model means [proving] that you can, in the long run, balance your books and that the system will wash its face … That is, philosophically for me, really, really important.’
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