Tag Archives: Second World War

Miliband’s New Year message hits the nail on the head

What a relief to see Ed Miliband putting out a New Year message that clearly shows, not only that he understands the problems facing his Labour Party, but he also understands how to frame his appeal to the people.

One fact that has become perfectly clear over the last year or so is that many readers of this blog have serious doubts about Mr Miliband and the party he leads. The perception is that he has been seduced by the Tory ‘deficit reduction’ narrative.

This writer has held concerns that Mr Miliband did not realise that the only argument he really needs to use is that of history – that it was the Labour Party that set the UK on three decades of continual growth after World War II.

How refreshing, then, to hear the Labour leader say: “This coming year we mark the 70th anniversary of the end of the Second World War, when our parents and grandparents overcame the most daunting odds to rebuild.

“After the war – badly battered and deeply in debt – Britain rose again.

“We built the NHS, a modern welfare state, homes for people to live in, and still dealt with our debts.

“We set the stage for a generation of progress for working people.

“Today’s challenges are different – but if we could walk through those fires, we surely can meet the problems of our time.”

He’s right, but there will be critics who won’t accept these words. They’ll say that the answer lies in further austerity – in withdrawing the cash that forms the lifeblood of the British economy and is needed to bring growth to the system as it flows through. They’re wrong, but to understand why, we need to examine the historical context provided by Mr Miliband.

So let’s put some flesh on the bones provided by his speech.


“UK national debt peaked in the late 1940s at over 230% of GDP. From the early 1950s to early 1990s, we see a consistent decrease in the debt to GDP,” according to the Economics Help website.

It continues: “The main reason UK debt to GDP fell in the post-war period was the sustained period of economic growth and near full employment until the late 1970s. This growth saw rising real incomes which in turn led to higher tax revenues and falling debt to GDP ratios.”

“Sustained economic growth” – Ed Balls has made it clear that he intends to stimulate the economy, if Labour is elected into government in May (despite the interruptions of such interviewers as Martha Kearney on BBC Radio 4’s The World At One – she insisted that such plans were irrelevant in the short term and demanded that he tell her what he was going to cut, completely missing the point).

We all know the Conservative-led Coalition ran a policy that stalled the economy for three years. The only reasons it is improving now are the fact that every economic downturn eventually reaches its lowest point and picks up again, plus the economic bubble that George Osborne created in the housing market.

“Near full employment” – Labour has made a return to full employment one of its policy goals. Detractors will say we’re close to that already; the difference is that Labour intends to achieve this with what this blog considers to be proper jobs – not zero-hours contracts or part-time fiddles.

“Rising real incomes” – Under the Coalition, incomes have stagnated, with most families having to endure a real-terms income drop of £1,600 while the richest one per cent have doubled their wealth. Labour plans to raise the minimum wage and push for the Living Wage wherever possible – as a start in its programme to cut income inequality.

“Higher tax revenues” – George Osborne has affected surprise that his policies have led to lower Income Tax returns, but it seems clear that this is an act; the plan was to engineer a drop in tax receipts, in order to justify further cuts to social security and public services. Labour’s plan would reverse this trend.

“Falling debt to GDP ratios” – The Conservative-led Coalition has overseen a catastrophic increase in the National Debt, while continually claiming that the economy is safe with them; because of this, we can look on the 2015 General Election as a measure of our own gullibility. Labour’s plan would bring prosperity back to the UK, allowing us to pay off our debts – just as we did after the Second World War.

Needless to say, the BBC News report of Mr Miliband’s speech completely missed all of these points.

Back to Economics Help: “Note – Debt to GDP fell, despite higher real government spending on the newly formed welfare state and national health service. In fact government spending as a percentage of GDP rose from around 35 per cent of GDP in the early 1950s to the high 40 per cents in the 1970s.”

You see, debt isn’t a problem if you’ve got the economic strength to deal with it. The Coalition has weakened the country; Labour would build up our muscle again.

Another feature of the post-war period was high tax rates – but perhaps that’s a story for another time.

Miliband’s message is a solid statement of hope for the future. Cynics will try to shoot him down – but they’ll need far more substantial arguments than any seen so far.

Follow me on Twitter: @MidWalesMike

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