Osborne’s ludicrous surplus plan will be the biggest test for Labour’s candidates | Polly Toynbee

Will any of the leadership contenders have the political nerve to tell the chancellor the truth: that this is economic nonsense?

Here comes the great test for Labour's candidates. At Mansion House, George Osborne threw down the gauntlet to them all. Will they vote to pass a law commanding all governments to run a surplus (in "normal times")? Will they vote for an equally bad law not to raise income tax, national insurance or VAT for ever more, the three main revenue-raisers? Ha! Thinks Osborne, ever the shoddy, short-term tactician, Got 'em there!

But he may be doing Labour a favour. We shall see who thinks they have the political nerve and the intellectual clout to call him out and explain in robust terms to the public what most serious economists and the IFS say: this is economic nonsense. Yes, the deficit needs to keep coming down each year: at 5% of GDP it's too high. But of course the government can borrow, as all governments do, if it borrows a bit less than the growth rate. Growth is everything.

Ed Miliband never found the language to escape the blame the Tories heaped on Labour for the crash

Continue reading...