The Labour party is finding that being in government is rather harder than being in opposition. The latter just involves saying everything the government of the day does is rubbish, the former requires clear vision, strong communication – especially of difficult things, the ability to make wise choices and the courage to lead.
The Labour Government has had a poor start.
They have, as nearly all governments do, a difficult hand but they have not played it well.
The manifesto promises were cunningly written and their letter has not been broken by the budget. People will say that Labour did not tell the whole truth in their manifesto to which the reply is that if they had they would never have got elected. Such is the politician’s lot, we don’t want to hear too much truth.
The thrust of the budget and other announcements which surrounded it is not entirely wrong. People who work for a living on average salaries have seen real wages rise since the financial crash of 2008 at a slower pace than at any time since the Industrial Revolution. An instinct to help them is laudable but instinct alone is not enough, it is how that instinct is directed and delivered which counts.
Read more
- Uh-oh, is the SNP government coming unstuck again?
-
Rachel Reeves makes huge calls in Budget with Scottish spending boost
The Labour Government has failed in three key areas which will undermine it for the rest of its time in office. They may be fatal to its chances of re-election and are certainly harmful to the country.
The first failure is to do the opposite of what it said it would do when it took office. Sir Keir Starmer promised his Government would be “laser focused on growth”, with all actions tested against and driven by the desire to increase economic growth.
That more growth is needed is entirely correct but giving workers additional rights from day one of employment, increasing taxes on businesses which then have less money to invest, increasing the minimum wage by 6.7 per cent at a time when inflation is below 2 per cent, giving large wage increases to public sector workers without requiring reform – all these directly act against growth.
What the Government - and only a Labour Government can do this – should say is that the public sector needs urgent and dramatic reform, that public services are there to serve those who receive them not those who deliver them, that increased pay has to be paid for by increased productivity, that over-generous public sector pensions have to stop.
So far, there has been some a mumbling about reform but no action.
The second failure is not to take the opportunity as a new Labour Government, out of office for 14 years, to grasp and then act on the truth which nobody wants to hear. Things are actually rather bad, to the point when our ability to continue as an effective state delivering reliably for its citizens is not secure.
World War, which had pushed public debt to dangerously high levels, the country and politicians accepted we had to do whatever it took to bring it down. Today with public debt again far too high politicians squabble about what rate that debt should still be allowed to rise.
After the SecondPolitical debate and the recent budget are all about trying to get the public finances into a state which is allegedly “sustainable”. What sustainable appears to mean is a position where if nothing bad happens we might just be able to scrape through as long as foreigners keep lending us the money we need.
That is a hopeless position to aim for. In less than 20 years we have had a financial crisis and a health crisis which have increased debt from round one third of national income to being equal to it. Do we think there will be no more financial crises? No more diseases which sweep the globe? No more wars?
In our current position we could not properly cope with any of these things. We should be running a day-to-day budget surplus to bring debt down and make our position robust so that when another crisis comes we can meet it.
Not a hint that this even crossed their minds comes from the Labour Government.
Their last failure, and they are all linked, is to reinforce the dangerous illusion that more of the nice public services we want will come our way – but somebody else will pay.
Read more Guy Stenhouse
- How Labour can create a more equal United Kingdom – and stop the SNP
- Starmer has very little time to make a real difference
- Neither Labour nor Tories are telling us the truth about tax
You cannot just point at the person in the big house and say they should pay more – there aren’t enough big houses, or at the executive who earns “too much” and say tax them even more highly – they can just move to Dubai and pay no tax at all.
If we want more we are all going to have to pay for it – that it can be otherwise was the dishonesty at the heart of Labour’s manifesto. If we want more then the only way to do that without crippling taxation or debt, both of which are counter-productive in the long run, is genuinely to focus on growth above all else, to reduce debt and to reform our public services to make them more efficient.
So far the Labour Government’s actions show no appetite to tackle the real issues.
Guy Stenhouse is a notable figure in the Scottish financial sector. He has held various positions, including being the Managing Director of Noble Grossart, an independent merchant bank based in Edinburgh, until 2017
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel