During the last Labour administration, of every £4 spent by government, £1 was borrowed. Labour’s debt simply kept growing and growing, reaching a point where £120 million pounds was spent every day just on paying the interest – that’s around £43 billion pounds a year, which is equivalent just over half of all the money raised by VAT. It’s also more than we currently spend on education.
Just think of what we could have done with that £43 billion a year. Instead the Labour government merely squandered it.
However, even though some members of the Labour Party have dared to express an ounce of honesty and admit, as Liam Byrne did, that there’s “no money left” – many within the Labour Party and other left-wing political movements continue to express their wish to spend more money which doesn’t exist.
Take Ed Miliband’s proposition of a “Real Jobs Guarantee” a couple of weeks ago. While Labour’s Future Jobs Fund, instigated towards the end of their time in Government, was continually shown to be nothing but a waste of money – placing young people in short-term, unsustainable public sector job for six months – Miliband appears to feel that reintroducing the same system is well worth the expenditure. Labour intended to spend £1 billion on the Future Jobs Fund and in reality knew they’d see no long term return in that investment because the majority of the jobs were in the public sector and therefore merely hastened the need for increased public spending.
Now the Coalition Government’s replacement for the Future Jobs Fund costs about one twentieth of the cost – and is seeing people who have been unemployed for considerable lengths of time placed in sustainable jobs, in the private sector, and also only allowing facilitators to be paid by results – meaning they only receive full payment for their services once an individual gains sustainable and long-term employment.
But returning to the “Real Jobs Guarantee”, Labour now claim they have a way to sustainably fund such a huge commitment – through the reintroduction of their beloved Bankers’ Bonus Tax. There are just a few problems with this.
Firstly, even ex-Chancellor Alistair Darling admitted that the Bankers’ Bonus Tax failed. It raised nowhere near the income which was expected, just £2.3 billion; and it served as yet another tax on aspiration, discouraging high earners to base themselves in the UK.
Secondly, if we were to assume that the Bankers’ Bonus Tax would only raise approximately the same level of income if it were to be reintroduced, Labour have already pledged to spend it twelve times over, on nine different projects.
That’s right – Labour has pledged to spend at least £29.6 billion using a tax which only raised £2.3 billion.
Labour’s plans for the money have included £13.5 billion on reversing the VAT increase; £5.9 on more Capital Spending; £2.5 billion on reversing Child Benefit savings; £5.5 billion on reversing Tax Credit savings; £200 million on more regional growth; £5 million on turning empty shops into community centres; £2 billion on “help for young people”; and two further commitments to increase spending on public services and cut the UK’s deficit.
Now if ever we needed a reminder how reckless the left is when it comes to economics, those figures must inspire us to ensure that they are never put in charge of our money ever again. Our children, and their children will be paying off Labour’s debts – and it is up to us to protect that little money we do have left.
Jack Hart is a parliamentary researcher. He tweets at @MrJacHart