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Susan Kramer responds to John McDonnell speech

September 30, 2015 10:52 AM
By Joe in Liberal Democrat Voice

Susan KramerLiberal Democrat shadow chancellor Susan Kramer has responded to John McDonnell's speech at the Labour conference on Monday.

Labour's proposals lack any recognition that delivering growth, fixing the economy and eliminating the deficit involves taking difficult decisions. They are offering a false prospectus which will stall any economic recovery and would mean more austerity for Britain.

There is no magic pot of money that has up until now been ignored, so Labour's plans to eliminate the deficit or renationalise major British industries are completely unfunded.

The Conservative Government is choosing to balance the books on the shoulders of the poorest but they can only be challenged by an economically credible opposition that is also socially just. It is now clear that the Labour party have left the playing field.

Liberal Democrats showed in Government that we can take the necessary decisions to rebuild our economy. We are committed to eliminating the structural deficit, but doing so fairly with a credible plan that means that the broadest shoulders carry the largest burden.

Unlike Labour we actually voted against the Conservatives' unnecessary cuts to welfare, and we voted against the Budget that introduced an inheritance tax cut for millionaires and a cut in corporation tax for some of the richest firms.

It is worth repeating that we have, as a party, shown ourselves to be capable of taking difficult economic decisions where necessary. Reputations for economic credibility are hard won and easily lost.

On the question of credibility, there is a piece in the FT challenging [link corrected] the idea that there may be £93bn of corporate welfare to be turned off, to pay for, well, pretty much everything.

For example a lower VAT rate on house building costs £7bn compared to the full rate and this is counted as £7bn of corporate welfare. But is it really? Surely if the tax were raised to the full rate, nearly all of that £7bn would be passed on to homebuyers, making housing less affordable and reducing the rate at which homes are built.

Tax credits, too, it is often argued, are a form of corporate welfare that subsidise low wages. But this time it is Labour's corporate welfare, that the Conservatives have now, only partly, replaced with a higher minimum wage. Vince Cable's industrial strategy, building on Peter Mandelson's and now under threat, is also, arguably, a case of corporate welfare.

Frankly, if there were £93bn on the table, government of any colour would take it, show largesse, and get re-elected by a landslide. You don't really need to look at the details behind the corporate welfare line, damning though they are.

* Joe Otten is a councillor in Sheffield and Tuesday editor of Liberal Democrat Voice