While working on my dissertation I’ve spent some time reading the party manifestos from the 2010 election. It really is as thrilling as it sounds… One thing however, did catch my interest – the uncanny resemblances between Labour manifesto pledges and actual economic policy introduced by the Coalition since coming to office.
Below, I’ve put in bold some of the notable manifesto pledges from Labour in 2010 together with the Coalition’s policy response in the same area. As you’ll see, there are some remarkable similarities:
Cuts to lower priority spending
In 2010, Labour claimed that tough choices had to be made with regards to public spending. Money was only pledged in areas deemed to be of high priority. The Coalition instead has said they are only prepared to fund projects if they offer high added value. Isn’t this what Labour were saying albeit using slightly different language? Surely high priority projects in reality are those with the highest added value?
Rebuilding the banking system
The Labour manifesto refers to making deals with banks to increase lending, changing boardroom culture, curbing executive pay, and breaking up banks. We’ve seen the Coalition advocate each of these with ‘Project Merlin’ to increase lending, Osborne and Cameron’s recent stance on the Barclays Libor fixing shenanigans, and Vince Cable’s push for wholesale reforms of the state-owned banks.
Investment in infrastructure
The two main infrastructure projects that Labour are looking to push in their manifesto are the roll-out of high speed broadband across the UK, and an upgrade of the national transport network, especially with the HS2 rail network. The past couple of Budget statements from George Osborne have clearly stated the Coalition’s desire to push through infrastructure upgrades in both these areas too.
Capping of public sector pay
Unions have been heavily critical of the lack of public sector pay increases together with pension reforms brought in by the Coalition. However, the Labour manifesto itself calls for “action to control public-sector pay including a one per cent cap on basic pay uplifts for 2011-12 and 2012-13” and for “tough decisions on public sector pensions to cap the taxpayers’ liability.”
Deficit reduction
This is probably the big difference that everybody likes to talk about. In reality though, Labour manifesto pledges and current Coalition policies are not that far apart from one another. Although clearly stating that they would not “put the recovery at risk by reckless cuts to public spending this year” Labour nevertheless pledges to “halve the fiscal deficit over four years.” They even state “Once the recovery is secure, we will rapidly reduce the budget deficit.” To me, this says that Labour spending cuts would have started only a year or so after the Coalition began theirs, would have only been marginally shallower, and would have taken only slightly longer than under the Coalition’s current plans.
The similarities in attitudes don’t just end here either. Labour promises to cut red-tape and regulation, and to support SMEs are cornerstones of current Coalition economic policy. Furthermore, Labour’s proposed “Finance for Growth Fund” sounds remarkably similar to the Coalition’s current Regional Growth Fund. And there are plenty of other uncanny resemblances that I can also pull out.
I have my own theory on this. In terms of economic policy, the ideological differences between New Labour (even under Brown & Darling) and Cameron & Osborne’s brand of Conservatism were always limited. Both put forward centrist and minimally interventionist policies although inevitably both camps adopted different rhetoric. The introduction of the Lib Dems into government has forced the Conservatives to blunt their approach somewhat and adopt the more conciliatory rhetoric and policy that you’d naturally expect from New Labour.
The main thing to take away from this article however, is that the Coalition since coming to office has basically followed the same economic approach that Labour was willing to back in 2010…
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