On the day when Labour is making impressive efforts to win voters’ confidence in its economic policy, why has Labour been so vague on one of its key promises?
At the front of its manifesto, the party has committed to get “a surplus on the current budget as soon as possible in the next parliament.”
This needs a little unpicking.
What Ed Miliband and Ed Balls are referring to is reducing the deficit, the extra borrowing which the government takes on every year to make up the difference between what it spends and what it receives in taxes.
Except, they qualify this already to exclude borrowing to invest in things like roads – in other words they only plan to balance the ‘current budget’ which covers day-to-day spending, instead of the overall budget.
This we already knew – and it means Labour would have around £30 billion a year to play with (meaning less austerity than the Conservatives).
However, the phrase “as soon as possible” makes this much less certain. It could take the whole five years of the next parliament to do so – and, on current plans, the independent budget watchdog, the OBR, says this wouldn’t need any further cuts at all.
But if Mr Miliband decided instead to balance the current budget within three years, as he did by signing up to the Charter of Budget Responsibility in January, it would require an extra £6 billion of cuts or tax rises in each of those years.
That’s a significant difference – but Labour won’t explain which timescale it will use. Which is odd as it would set clear water between them and the austerity expected under a Conservative government.
Finally a word about another of the promises in the manifesto.
“We will get national debt falling,” it says.
Again, this isn’t quite what it appears as it specifically means debt as a proportion of the economy (GDP). Debt in cash terms will continue to rise if Labour adds that extra borrowing to fund investment. Debt as a proportion of GDP is already falling and is expected to continue to fall as the economy grows.
This crime of omission is one committed by the Conservatives, too. George Osborne has repeatedly said in interviews (with me) that he’s “paying down the national debt” when what he’s referring to is that the deficit is falling, even though debt will continue to rise until the deficit is eliminated.
What will matter to Labour today is whether voters take heed of the mood music of “budget responsibility” and forget the reputation past Labour governments won for reckless spending.
But it’s the detail of the promises that could matter more.