Johnson ‘reformulating’ Darling’s approach
By politics.co.uk staff
New shadow chancellor Alan Johnson has refused to make a break with Alistair Darling’s approach to cutting the deficit as the comprehensive spending review approaches.
Labour’s new economics chief has had barely a fortnight to come up with a credible alternative to the sweeping spending cuts expected to be unveiled by his opposite number George Osborne on Wednesday.
He and Labour leader Ed Miliband have received criticism for not being clearer about whether they would move away from former chancellor Mr Darling’s approach of halving the deficit within four years.
Mr Johnson said on BBC1’s The Andrew Marr Show that Labour’s policy had been “set in aspic” since the general election because of the party’s leadership campaign.
He said Mr Darling had the “right prescription” for the economy and admitted that he had to be “more specific” on how we would take that view forward.
“We had a plan, we’re just reformulating that plan. What they intend to do is go much, much further,” he said.
“What we need is jobs and growth, and the danger is we just bump along the bottom for a long, long time.”
Mr Johnson said he wanted to see an increase in capital gains tax and more taxation focusing on the banking sector to help finance Labour’s focus on kickstarting the economy.
He pointed out the bank levy’s £2.4 billion was less than the £2.5 billion in child benefit cuts proposed by the coalition.
“If you can get more money from the banks and put that into capital spending at the time of recession… it’s actually good economics as well as good politics to use this period to tackle infrastructure problems,” he suggested.
Mr Osborne said the coalition was prepared to take action on the banks, however, including forcing them to sign up to a code of conduct which the Labour government had failed to make mandatory.
Legislation implementing a permanent bank levy will be introduced next week, he added.
Mr Johnson refused to be drawn on specific policy issues like welfare reform, repeatedly retreating to generalities about the spending review.
“On every different department, the difference between us on scale is enormous,” he added.
“It’s the difference of about half again because we wouldn’t cut as deep and we wouldn’t cut as quickly.”
Mr Johnson, among the most senior Labour figures not to stand in the leadership campaign, admitted he was surprised to have been picked by Mr Miliband for the shadow chancellor role.
“I was mildly surprised, but I’ve been around a long time… I’m the Saga section of the new generation,” he said.
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