You talking to me? Ain’t nobody else here.

We all know the feeling. Something bothers you for ages, just eats away at you.

It's an itch you have to scratch. But if you do scratch it, won't it just make the itch worse? So you try and hold out. But then it gets too much, so you set about it with enthusiasm.

I suppose that David Clark, editor of new website shifting grounds, a former Robin Cook adviser and close ally of the Labour leadership, felt like this about In the Black Labour. Certainly, I regard it as the highest of compliments that six months after it was published, David has decided to launch a direct assault on our little pamphlet.

Or at least I think he has.

I am unsure if he has attacked us or not because David's article asserts a number of things about what Fiscal Conservatives believe that are not the case for "In the Black Labour's" authors.

For example David says: "True fiscal conservatives dislike the use of demand management as a tool of economic policy and seek to restrict its scope as much as possible"

No we don't.

Here's what we say "While there is a major absence of private sector demand, the government must fill the gap; not just to keep the economy growing but to protect long term fiscal sustainability."

David also says that "true fiscal conservatives essentially see government as the root of all evil, their solution is for government simply to get out of the way. They are positively hostile to an active economic role for the state"

Gosh, do we?

Here's what we say: "after the deficit is reduced, the state will still be spending some £700bn a year. That’s less in real terms than before the Crash but still a very significant proportion of the UK’s GDP. It means the state can still do much to promote equality and social justice but it will also mean facing up to big strategic choices about how to use existing expenditure"

I'm not sure what David means by "true fiscal conservatives" . He concedes in the examples given that we don't agree with the statements he makes about "true Fiscal Conservatives."

So why make them at all?

If David means we're not "true" Fiscal Conservatives, merely a different type of Fiscally Responsible Social Democrats, (a position he supports, saying that "to the extent ITBL endorses fiscal responsibility", he agrees with us.)  why attack us for being such?

David suggests we are just "like the kids of 1977..  who stuck safety pins through their school jumpers and called themselves punks" and so the left should be wary of us.

Except that when it comes to what we actually say, rather than David's caricature of what we say, we should be agreed with.

I confess I find this rather confusing.

Perhaps David thinks we are true fiscal conservatives underneath it all, but are merely hiding our claws behind a seductive soft and cuddly moderation that he agrees with.

Either way, attacking us for things we clearly don't believe, have argued against, and do not accept seems an odd way to engage in debate.

Should I reply by arguing that "true leftists" believe in the elimination of the Kulak class, conceding that while David doesn't believe such things, we should still be wary of his actual proposals?

This oddity aside, there are more significant points lurking beneath the caricature and comradely comparisons to suburban wannabe punks.

It's worth addressing these.

First, As we've seen David repeatedly tells us he shares our enthusiasm for "Fiscal responsibility", though he leaves undefined what such a fiscal responsibility might look like, any timescale for achieving it, and so on. 

Now I confess, such a vague commitment is one of my pet hates about the fiscal debate on the left.

Perhaps it's because as a fat man, I have taken a similar approach to chips. I would tell anyone who listened that I believed in a responsible approach to chip consumption. It was even true. I stopped eating so many chips a few years back.

Unfortunately, until I demonstrated how I was going to limit my eating of chips to such an extent I was in calorie deficit, or did more exercise to achieve the same goal, few people believed I was serious about losing weight.

If the Labour party parades an enthusiasm for fiscal responsibility, while decrying any and all concete proposals to actually achieve such a state of affairs, (and also imputing dark motives to anyone who does so) I suspect we will recieve the same polite scepticism. 

So I searched David's article for clues to how he would actually deliver the Fiscal responsibility he prizes.

I found "a commitment to rigorous spending controls, eliminating tax avoidance and making the better off pay thier share".

Well, OK. So we agree on "rigorous spending controls". I assume this means David agrees with our statement that  "Rather than relying heavily on extra public spending, social justice will have to be advanced through prioritisation, institutional innovation and reform."

Next, Tax avoidance. The left calling for the elimination of tax avoidance is like the Tories attacking waste. Tax avoidance exists. I suspect attacking it is both popular politics and a worthy policy aim. But if you think you can wholly eliminate it, attempting to do so will solve all your problems, or there are no political consequences in so doing, I've a bridge I'd like to sell you.

After all, this awful government is getting into trouble for adopting a fairly simple approach to one aspect of tax avoidance, by effectively demanding an alternative minimum tax. As a result, they are being assailed by everyone from Charities to the Church and will have to row back.

Next: making the rich pay their share. Absolutely up for that. For example, I rather like the SMF sugggestions for increasing growth and economic investment by doing just precisely this.

The SMF proposes a cap on ISAs, rolling child benefit into the Tax credit system, ending non-contributory benefits for wealthy pensioners, and halving higher rate tax relief. This would be tough, a hard political sell, but a worthy cause.

If David seeks to close the deficit by maintaining spending and increasing taxation, and feels that the sort of proposals outlined above are too small, then I welcome that commitment, I look forward to the debate and only ask for a few more proposals on how he'd actually do it.

Which taxes would he seek to raise to close the multi-billion pound post 2015 deficit, once growth is achieved? 

(To help David out a little, I suspect the two most likely options are some form of Land or capital gain taxation, and the old standby of a transaction tax.* )

After all the discussion of things we don't say, David makes two substantive criticisms of our paper.

First, David argues that the authors of "In the Black" Labour are not interested in real reform of the private sector. While he concedes we talk about the importance of industrial policy. David argues that we "say nothing about the need for a different conception of capitalism".

I agree. We don't. It is perhaps an error of ours that  we did not attempt a fundamental reconceptualisation of Market capitalism. Personally, I have an aversion to proposing changes that I have no idea how to achieve. As I don't know quite how we should differently conceive of capitalism, I didn't press for its inclusion as a priority.

However, if it will engage David, I assure him that I am entirely supportive of his desires to "build fairness into the DNA of our economy". I am very much for fairness, against unfairness and am even pro-Genetic modification.

I look forward only to being educated on how we will deliver his proposal to "do something radical to make capitalism functional to the needs of a just society".  I am, in addition to being pro-fairness, all in favour of doing something. Even better if that something is radical, makes capitalism functional and is pro-justice.

Finally, in his most acute critique (one based on something we actually say, rather than something we disagree with, argue against, or merely neglect), David attacks our suggestion that the left consider the aim of achieving a balanced budget at the end of the next parliament.

(We actually say "The precise nature of such targets is a matter for more detailed debate but one option might be a commitment to deliver a surplus on the public finances towards the end of a concrete timescale such as the lifetime of a single parliament. Other equally credible possibilities clearly exist.")

David regards this as dangerous, pointing out that there may be a further recession which leads to the need to further stabilising and that attaching an non-adjustable date to fiscal balance is a foolish idea.  

My instinct is to suggest that David takes this up with that dangerous fiscal conservative Francois Hollande, who is proposing to bring the French budget into balance by 2017.

Perhaps President Hollande is one of those fake-punks David dislikes? He certainly looks like he puts safety pins through his jumper to me.

However, such snideness gets us not very far.

David has a point. The precise nature of what a commitment to fiscal conservatism takes is an important one. Perhaps he would prefer adopting the Chilean model, where an independent committee judges the postion of the fiscal cycle, and sets the constraints the government will operate in to achieve fiscal balance?

The principle should perhaps be this: the more flexibility a government desires to adress the vagaries of the economic cycle, the more external enforcement is needed to show that we actually mean what we say about "rigorous spending restraint".

If that's the case, we are can debate the model of fiscal restraint mechanism that is most appropriate for long term balance, and consider what policy choices might be needed to deliver such fiacal balance,

Naturally, I prefer a cautious, risk averse approach to such projections and choices. It's why I'm a Fiscal Conservative. Others may differ on such choices, and we can debate that.

Indeed, that might be a more productive use of all our time than drawing lazy caricatures of others positions.

 

* I'm open to the former, though whether it will be an early revenue raiser I'm not sure, I confess I'm doubtful of the deliverability of the latter, given it's a transaction tax, not a tax on the rich, the history of avoidance of such taxes (cf Stamp duty on shares), the nature of what we seek to tax, and the need for global agreement to prevent it simply becoming a boon for the Delaware of the global economy. However, I'm sure David has an elegant solution to all this, and I look forward to reading it.