Coffee House

Peter Hain wants more debt — another policy stolen from the Tories

7 May 2013

Peter Hain is pessimistic about Ed Miliband’s chances, in spite of what the bookies say*. ‘If a general election was held tomorrow, Labour wouldn’t win a majority,’ he writes in Progress Online. ‘The truth is if we want a majority in 2015, we need to be performing better than we are now.’ He also zeroes in on the problem: Ed Balls, and how few of his Shadow Cabinet colleagues will support him:

‘We cannot afford to be equivocal about our economic policy. We need to be more upfront with the public about our intentions. Yes, we will borrow more in the short-term, in order to generate growth that will reduce borrowing in the medium-term. It makes sense to do so with interest rates so low. We will borrow to invest in new homes, major infrastructure projects, refurbishing schools, creating employment. Schemes that will stimulate the economy. But we will nevertheless run a tight fiscal regime.’

Precisely how Miliband would run a ‘tight fiscal regime’ while promising to borrow even more than the Tories is not quite clear, but Hain also points out how few of Ed Balls’ colleagues want to take to the airwaves and back him up:

‘I’m confident Labour can win the economic argument if Ed has the support of a loyal team around him. It’s important that all members of the shadow cabinet play their full role in explaining and defending Labour’s policy and approach. Labour’s Treasury team need to get out on the stump now and work even harder. It shouldn’t just be left to Ed and Harriet to carry the heavy load, whether on the World at One, the Today programme or anywhere else.’

Claim your gift

In his eloquent rage, Mr Hain has forgotten someone. George Osborne agrees with borrowing ‘more in the short term’ and has been testing this policy to destruction over the last three years. The national debt is now rising by £2,000 a second. Result? The economic growth hasn’t come, but we’re stuck with the debt. And if Labour would borrow even more — say, £2,500 a second — would that be a gamechanger? It’s hard to find a serious economist who would say so. That’s why Balls has so few people willing to help him on backing vocals. They know that he is singing a rotten tune.

Screen Shot 2013-05-07 at 22.50.19

Screen Shot 2013-05-08 at 10.09.31

* Subscribers to our Evening Blend email will know the odds on the next election, which we update every day. Lab majority 41%, Con majority 19%, Lab-LD coalition 18%, Con-LD coalition 12%, other 10%. Be in the know: sign up here.

Give the perfect gift this Christmas. Buy a subscription for a friend for just £75 and you’ll receive a free gift too. Buy now.

Show comments
  • Fat Bloke on Tour


    I take it you cannot cope with debate?
    Free speech optional in SpeccyLand?
    Cutting posts because you cannot answer them.
    Really poor show.

    • David B

      I think you should look at LabourList to see how they cope with people posting against the editorial line. They block them. I know they blocked me. You get a free reign on this site. That is free speech!

      • Fat Bloke on Tour

        Davy Boy

        How wrong you are.
        I posted a couple of points against Trevor’s argument and they have been deleleted. It is not the first time it has happened.

        For the record I was putting forward the view that you run a tight fiscal regime if you borrow to invest in productive assets.

        That is roads, houses, new trains and buses, flood defences and energy infrastructure. I would even goes as far as some patrol boats for the RN. What you should not do is cut the income tax bill for the top1% using borrowed money.

        • David B

          I cannot speak about deleted posts but you are still here. LabourList don’t even let me post, not deleting selected posts – they prevent all posts!

          Ireland borrowed to “invest” in roads, etc as you suggested. They built roads that go nowhere and when it all fell appart the debt was still there! When there is a crises caused by over borrowing and over spending it cannot be solved by borrowing and spending more.

  • Fat Bloke on Tour


    For Sniffy and the Dog Boilers the austerity agenda was all about politics not economics.

    You sort out a crisis caused by the bankers / financial chances by putting the boot into the poor, the sick and the unemployed?

    This is the establishment, privately educated, righting mentalist agenda that has failed, is failing and will continue to fail in the future.

    Please watch the film “Ace in the hole” — it will tell you everything you need to know about the current situation.

  • Fat Bloke on Tour


    When are you going to admit you got it wrong 36 wasted months ago and you are still getting it wrong today. Admit it you and the dog boilers are in the smelly stuff without a clue.

    Just to help you out of your ignorance — a tight fiscal policy means borrowing to invest in infrastructure not cut the income tax bills of the top 1%.

    Turn National Insurance into National Investment and start building. We already have the QE interest saving windfall and we can borrow at very advantageous rates. House, roads, green energy, electric vehicles, schools, land rehabilitation, farmland improvements, flood defences, more roads, low cost housing, municipal housing — the list is endless just a case of a lack of political will not a lack of productive capacity.

  • Magnolia

    The state does too much. It’s the same in the USA and of course, all over Europe.
    Each economic problem has to have a state driven solution because of the demands of democracy and the politicians act and build in another future problem down the line.
    The result is funny money and continuous firefighting.
    Over in China they try a more robust way of state control and I don’t believe that will turn out any better in the long run either.
    What’s missing is freedom for society, individuals within family units and businesses.
    Governments must still be there to prevent abuse, fraud, criminality and ignorance and to provide national defence in all its forms but they should get out of the business of continuous micromanaging, smothering pseudo-care.
    We will not get recovery until we have sound money.
    Is there any of it around?

  • Andy

    It’s a policy that doesn’t work. It hasn’t worked in Japan for the last 20 years. Keynes is basically wrong. Or rather people like Hain want Keynes-ism now but I don’t recall him demanding a balanced/surplus budget in the previous 10 years, which is what we should have had – corn in Egypt and all that.

  • Eddie

    It didn’t work in Spain – so why should it work here?
    The big problem people like Hain contributed to was supporting mass immgration which has put huge pressure on housing and public spending – 30 years ago our population was 56 million; now it;’s 62 million. All those people need housing, schools, hospitals, public spending – that is the hidden cost of immigration that often gets ignored.
    There is NO net benefit from immigration – but South Africans like Hain with his white guilt always support anyone swarthy of skin and want millions more Africans coming here (he is trying to do this in South Wales). Maybe Hain should go home to SA?
    We need to borrow less and introduce p[olicies which will allow property prices to reach their real level – much lower than now. Legislation is needed to stop foreigners buying property (or getting council housing). Immigrants should be expelled – and EU gtreaties renegotiated to stop even more EU workers coming here (though they are infinitely better than the Africans and Asians)..

  • alexsandr

    2015. just in time for the next cyclical global downturn. Then we see what austerity means.

  • terence patrick hewett

    This oleaginous fraud is positioning himself for a position in the next Labour government. Yuk.

  • Daniel Maris

    Well we’ve had this economics lesson before Fraser but you leave out the psychological component…Osborne (aided and abetted by you and sundry members of the Spectator staff) help create a mood of economic armageddon that collapsed consumer confidence with all that austerity chic. That is the difference between sensible Darling and you lot. And part of the problem is that Osborne austerity propaganda was matched by action in that he has been waiving around his austerity machette around the heads of the public sector like a mad man for three years now. Public sector workers have husbands and wives, they have sons and daughter and grandparents…they aren’t living on another planet.

    Little Lord Fauntelroy has taken a drama and turned into a crisis and then turned it into a meltdown.

    The Tories (stupid and thick, despite the best education known to man) have brought this on themselves.

    Now they are facing the ultimate auto-destruct. Looks like the party might actually split.

    • Abhay

      Daniel, there are sensible things in your post such as what you say in the last para about potential split in the Tory party.

      But then at the start of your rant you have called Darling ‘sensible’. Was that due to a momentary lapse of reason?

      • Daniel Maris

        Well the graphs show a modestly average recovery taking place until this lot took over, since we have been flatlining or at best bumping along…

        It’s Osborne who has teh explaining to do, not Darling.

        • Abhay

          That ‘modest recovery’ that people saw was the immediate impact of the new fiscal and monetary measures that were undertaken under the aegis of G-20 countries’ corodinated effort. It included capital infusion in banks, liquidity support and guarantees and very cheap money which allowed asset prices to recover a little. The causes were not cured.

    • Wilhelm


      What’s upsetting you today ?

      • Daniel Maris

        Fraser pretending he knows about economics.

    • Hexhamgeezer

      Just print ‘client state’, no need to bother with ‘ Public sector workers have husbands and wives, they have sons and daughter and grandparents’

      Darling is Labour’s Lamont – weak and no courage to back up his lack of conviction.

    • Fat Bloke on Tour


      Sniffy has scared the plebs fartless.

      They don’t want to spend.
      The corporates do not want to invest.
      More of the same will just make things worse.

  • Abhay

    ”New homes and major infrastructure projects” – by now we should be tired of hearing this kindergarten nonsense. So its really this simple – just borrow a bit more and build some homes! Problem solved!!

    5 years into this downturn, G-20 are struggling with it, but the formula was known all along!! These idiots should not be re-elected.

  • Wilhelm

    He’s a Trotskyist and a terrorist, why doesn’t he go back to South Africa ?

    • Russell

      Just another another 3rd rate thief who shouldn’t be given column inches.

  • Archimedes

    I disagree with Hain, but his motivations are, at the very least, noble. He knows that Labour cannot go into office having lied about their intentions. It probably tells you more about the direction of the Labour party than anything else. Miliband is more slippery in this regard than most of the press give him credit for, and most Tory strategists dismiss him too easily.

    • Abhay

      ‘Tory strategists’? Who are they? The ones who after univ go join political research offices and write silly papers but have difficulty tying their shoe-laces?

      • Archimedes

        Yes, those people: the ones on the same side as us.

        • Colonel Mustard

          Really? I thought Cameron’s project of “de-toxification” was intended to capture a whole load of voters to the left of centre. They still hate him – perhaps more so. As now do a whole lot of people to the right of centre.

          As a strategist and strategy that is an epic fail. In military terms he underestimated the strength and position of his enemy, confused fraternisation with attack, undermined the morale of his own army and abandoned his lines of supply and secure base. He is now engaged in a frantic rearguard action, with his forces isolated and split, whilst at the same time attempting to quell mutiny in the ranks. Even Heath, at his worst, was not so destructive to the Conservative party.

          Being bold and being rash are very different. Cameron does not appear to appreciate the difference. He is rash where he should be circumspect and hesitant, if not cowardly, where he should be bold. He has not understood that the “Lib Dem constraints” are merely a chimera and perhaps an excuse. He and his staff do not appreciate that high status does not confer infallibility and history is littered with the graveyards of failed generals.

          • Magnolia

            I recommend this comment.
            I called for Dave to call out the Lib Dems over the boundary review to show what a shower they truly were but he didn’t have the bottle. He is the PM. He has the whip hand!
            He could destroy them, but perhaps he likes them too much?

            I still believe that he is a mole.

      • the viceroy’s gin

        No, those are the party leaders.

        The strategists did attend uni, yes, but they can’t write and they don’t wear shoes.

        And you don’t even want to hear about the interns…

        • Abhay

          Thank you, The truth is finally out.

  • the viceroy’s gin

    …you mean, a policy stolen from the Cameroons and you Speccie teenagers, don’t you?

    Aren’t you the publication that squealed with glee over your Cameroonian heroes, even as sensible people informed you that their budgets weren’t even 1% different than Darling’s, as the data showed quite clearly at the time?

    Why yes, I do believe you are that publication, and those people.

    Maybe you should publish a cover story with a great big fat hairy mea culpa. That might wipe the slate clean for you.

    Your cover can have a nice cartoon caricature of a dumb, lazy youngster with a dunce cap on his head, sitting in the corner of the classroom. You can even have multiple dumb students in the corner, as in, several of you Speccie teenagers and Cameroons, and you might as well throw in a few Millipedes as well, with all of you malefactors sitting side-by-side, of course. That should do it.

    Meanwhile all the smart students who did their work and paid attention properly can be shown continuing on with the class work. Those would be conservatives.

    Then get down to the required article, in which you get into the detail of how you managed to publish a bunch of bovine excrement about some fantasized Cameroonian “austerity”. About 1,000-1,500 words should do it, I should think.

  • alabenn

    Yes, we will borrow more in the short-term, in order to generate growth that will reduce borrowing in the medium-term.
    The only reason borrowing more in the short will reduce borrowing in the medium term is because, no one in the future will lend to you,.
    When all this QE and borrowing off yourself collapses you will have a balanced budget, no money, no spending and absolutely no borrowing, bankruptcy is another word for that.

    • telemachus

      You are wrong
      The IMF are now promoting growth by borrowing and investment
      The general world economy is now buoyant and will sustain it
      All the Balls Bashers will live to regret their lack of faith in this charismatic superstar

      • alabenn

        The IMF is now another arm of the borrowers, the collateral they have is from countries who cannot back it up, their only hope of survival is keeping the show on the road in the hope something will turn up..
        A bit like the creatures we have had for the last twenty years.

        If and when the west goes down nothing will save the world from the realignment that will follow, and before you say China , its economy is built on sand and would be first to turn in on itself.

        • Russell

          He is an idiot and doesn’t realise that the UK borrows money and lends it to the IMF.

          • The Sage

            The UK also borrows £11 bn a year to give away in foreign aid. How crazy is that?
            Sorry, I forget we are going to stop £19 million in aid to South Africa from 2015.

        • telemachus

          The economic powerhouse of SE Asia and China want and need to see us grow and will invest

          • David B

            Are you will to bet your children’s and grand children’s future on them not want to be paid back. Sounds like you are.

            • telemachus

              As we grow (with the German powerhouse) we will have money in spades to pay back

              • Nicholas chuzzlewit

                A fabulously ignorant and ill considered comment.

              • David B

                That strategy failed in 1993 with our exit of the ERM. Don’t think anyone would be that stupid to try it again

      • HJ777

        I assume you’re being sarcastic about Balls.

        • telemachus

          He has more economic nous in his left great toe than the entire joint brains of Alexander and Osborne

          • HJ777

            !’m quite sure that his left big toe has more economic nous than his brain too.

            Unfortunately, his toe isn’t in charge of his economic utterances – because they would make more sense if it was.

            • telemachus

              Just watch Osborne cosying up to Christine this week with something akin to Ed’s 5 point plan
              For Growth

          • David B

            He sits on his economic nous!

          • John McClane

            I can no longer be a*sed to down-click on your comments anymore. I’m getting RSI and it’s wearing out the mouse.

        • Nicholas chuzzlewit

          No Telemachus really is that invincibly, indestructibly, unerringly and unremittingly stupid.

          • HJ777

            Come on.

            Nobody can be stupid enough to believe that Balls has a milligramme of charisma nor that he is a ‘superstar’, and still have the ability to breathe and feed themselves.

            • Nicholas chuzzlewit

              I can assure you that Telemachus is the most giftedly stupid person in the UK. He believes that Ed Balls, through nothing more than personality, will revive the British economy and take us past Germany, Japan etc. Like I said, he is offensively stupid.

      • Colonel Mustard

        Buoyant as in the rising of a bubble. You and the Labour party seek to reinforce failure, to turn the clock back to the final months of Brown, spending profligately money he did not have. The only difference would be the imperative to chase the elusive wraiths of growth rather than to discomfort the Tories with scorched earth.

        If it was so easy to borrow for growth then Byrne, in the treasury with his cappucino, espresso and soup no less, should not have had to lament “…there’s no money left.”

Can't find your Web ID? Click here