Alan Johnson has launched Labour’s counter attack to George Osborne before the latter reached the despatch box.
He has said the coalition government is taking a "reckless gamble" with economic growth and jobs.
That’s the good news. I still think, however, that he’s overstated the importance of tackling the deficit.
Of course the deficit is important but jobs are more important and so is restoring prosperity to this country. You can't do that by making the deficit the focus of your economic programme. You can only do that by making job creation and a new industrial strategy to focus of your economic programme. Do that, and the deficit cures itself. Ignore that and the deficit , inevitably, continues because private saving will increase, investment will remain at very low levels and the balance on the international trade current account will remain in deficit.If all those things happen then inevitably the government cannot, ever, clear its deficit as a matter of fact
That said, he did some good things. He said he would look again at the balance of tax and spending to achieve the reduction. The formula under his predecessor, Alistair Darling, suggested that 66% of the deficit reduction plan should be achieved by spending cuts, and 33% by tax rises. Johnson said that he believed a 60:40 ratio was "about the right balance". And he said "targeted tax changes" were needed because economic growth had to come first.
Most especially the reinforced my argument, published this morning by the TUC, that banks should be bear a greater part of the burden of reducing the deficit.
And the mood music in this statement is absolutely right:
We are constantly told that there is no alternative to the current economic strategy pursued by the government. But there is another way, a balanced approach that gets the deficit down, but recognises that growth and jobs are not a sideshow to an economic strategy, they are what it is for. And that approach requires thinking again about the role that capital investment plays and prioritising it. Without growth, attempts to cut the deficit will be self-defeating. A rising dole queue means a bigger dole bill. And less tax coming in. The Tory plan, for all its Liberal Democrat cheerleaders, is a huge gamble with growth and jobs.
So my concern is whether he's got the cart before the horse, or vice versa, but what I do know is that he has definitely got them coupled together, and that's a lot better than the ConDems have done.