Labour's mp3 player stuck on repeat

Harriet Harman on Radio Wales today repeated the tired old incantation: "Cutting too far, too fast, tax bankers' bonuses." Well, most Liberal Democrats - and thousands of council workers in England, most of them in Labour local authorities - would agree with the "too fast" bit. I am sure that Vince Cable's timetable for reducing the deficit would have been acceptable to international lenders.

But "too far"? The coalition government's cuts are less than envisaged by Alistair Darling (see diagram), Labour's last chancellor of the exchequer. To argue for smaller cuts now smacks of hypocrisy.

Besides, we don't have to look beyond Italy, never mind as far as Greece, to see how the money markets punish those governments who are seen not to be serious about trimming their deficits.

The bankers' bonus tax is pure gesture politics. It was admittedly a useful on-off for Alistair Darling. It might in the future deliver a slap on the wrist to those traders not shrewd enough to avoid it, but it is not a serious long-term tax-raiser in the same way as the coalition's bank levy is. And, as Lorely Burt, Co-Chair of the Liberal Democrat Parliamentary Party Committee on Business, Innovation and Skills points out:
"The sheer hypocrisy of Labour to point the finger on bankers' bonuses is staggering. Labour presided over the biggest boom in bonuses this country has seen, from £3.1bn in 2001 to £11.5 billion in 2007. At the same time, they sat back and knighted the financial speculators who led this country to the brink of economic collapse."

Postscript: Tristram Hunt and Caroline Lucas on "Any Questions?" tonight cited the United States as an example of a nation where economic growth has resumed and unemployment has begun to fall, in spite of a massive deficit which the President and Congress have not seriously trimmed. But America is a special case which no other country on earth could emulate with impunity.