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PH Opinion
Views and comment from Westminster
Wednesday 18th January 2012 | 13:10
John Mann: What a way to create a deficit reduction plan
Writing exclusively for PoliticsHome, Labour MP John Mann says Ed Miliband and Ed Balls have 'fallen into Cameron's trap' on public sector pay and deficit reduction.
The Government has announced a 1% freeze of public sector pay for the next two years and the two Eds agree with them.
But agree with what? Government sets a budget, tax thresholds, marginal tax rates, Vat and other taxes. The combination of these measures determines an individual’s real standard of living.
So does inflation, running at 4.2%. But what will it be in two years time? The Government is assuming a 2% maximum, ie within the Bank Of England’s target rate. That looks unlikely, and if it is not met then logically the government will increase its pay pot. They are not saying and why would they. They might in two years time in 2014. I wonder why that might be?
So why have the two Eds fallen intro Cameron’s trap?
The Eds say that the big Government error is a lack of a growth strategy, but where is Labour’s? To date it is based on reducing VAT back to 17.5%.
So let’s get this right. Labour deficit reduction plan is to stimulate growth by taking £50 billion less in tax each Parliament than the Tories would, but to restrict the spending power of low paid public sector workers by a real cut in their standard of living, in addition to their increased pension contributions.
Why will giving the unemployed and private sector workers a cash boost benefit the economy, whilst doing so for public sector workers will not?
The reality is that this is a political gesture, because a pollster has told Ed Miliband that he is seen as a weak leader and Ed Balls as weak on the economy. Solution: kick the highest voting and self-identifying group of floating voters and a group that is nationwide!
Back to the drawing board lads.
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