Labour leader says government is trying to rewrite history by claiming deficit was caused by Labour overspending rather than the global financial crisis
Ed Miliband accuses the Conservatives today of a "great deceit" in blaming Labour for the national deficit and warned that they have concocted a false narrative to justify politically driven cuts. In announcing a raft of swingeing public spending cuts the coalition government has repeatedly sought to portray that its hands are tied because of the size of the deficit it inherited from the last government.
The same argument was rolled out this week to defend this week's rise in VAT from 17.5% to 20%, after warnings of the likely impact on low and middle-income families and the fragile economy. Amid Labour concerns that the opposition has not been forcefully contradicting the coalition's narrative on the deficit, Miliband insisted that it was not caused by Labour overspending but by the global financial crisis.
"My concern is that a great deceit designed to damage Labour has led to profoundly misguided and dangerous economic decisions that I fear will cause deep damage to Britain's future," he writes in today's Times (paywall). The Labour leader says that by blaming the deficit on overspending the Conservative-led government is seeking to win consensus for its policy of cutting the deficit "as far and as fast as possible". But he accuses the chancellor of "gambling on a rapid rebalancing of the economy" and says he is going "too far and too fast on the deficit".
Accusing the Tories of attempting to rewrite history, Miliband points out that Britain's debt at the outset of the economic crisis was the second-lowest in the G7 and lower than it was under the Conservatives in 1997 and says neither of the parties in the coalition government called for lower spending at the time.
Miliband repeats his warning from earlier this week that the VAT increase will squeeze families on middle and low incomes and says growth will be restricted as a consequence. He argues that while some would argue those are prices worth paying in the short term, the effect will be to store up problems for the future.
He says Labour is not opposed to every cut "but neither is it true that Labour is to blame for the deficit or that the deficit-reduction programme being pursued by this government is necessary and fair. Because this Conservative-led government is trying to deceive people about the past, it is making the wrong judgments about the future."
David Cameron said yesterday that the joint impact of increases on duty and VAT meant things were "very painful and difficult" and raised the prospect of introducing a fair fuel stabiliser which would keep fuel duty down when oil prices rise. He also admitted that the rise in VAT to 20% this week was regressive in terms of people's income but might not be if it was looked at in terms of people's spending.