Fascinating interview with Lord Myners in the Guardian this morning by Allegra Stratton in which the former City minister admits that Labour abandoned fiscal responsibility.
He suggests that Gordon Brown “forgot” the Golden Rule. That Labour ran large deficits when the economy was at full capacity. That the party needs to come clean on what cuts it would make. And that it needs to prove once again that it is a credible party of economic management.
Here are the key quotes:
“The mistake we made as a government was that we ran large deficits in the middle part of the last decade when the economy was clearly running at full capacity.”
“I don’t agree with Ed Balls. I do think the Labour party has to wrestle with the fact that it tends to leave office with large deficits. And I think its licence to govern is weakened – and it would be weakened in the future – if it could not produce credible arguments to show that it is capable of sound economic management through the cycle. We are also going to be able to make a more credible contribution to this debate if we’re clearer about where we would have made cuts and where we would have made taxations.”
“I am essentially arguing for the golden rule which Gordon so passionately believed in, but grew to forget, which was that: through the cycle the current government expenditure should be covered by taxation. And that borrowing should be used for investment purposes and I believe that that is a sound rule and it is an idea to adhere to, and in a world where progressive government – a government which delivers a fairer society and is fairer to and supports the needs of the vulnerable – needs to achieve its goals within the context of running a balanced budget over the cycle.
The peer also says that he is leaning towards David Miliband although he will not officially endorse anyone.
Incidentally I’m interviewing Mili-D this week and would welcome any particularly sharp questions from readers.
Jim Pickard
Kiran Stacey
