Steve Richards: The dangers that stalk Johnson

How can Labour win an election proposing tax rises against Conservatives arguing for tax cuts? They need an answer, and then credible and popular policies to flesh it out

In theory Labour's new leader and shadow Chancellor have cause to raise a glass or two when contemplating their political prospects. Tomorrow a coalition formed of two parties that in neither case won the last general election will announce spending cuts on an unprecedented scale. There is no competition with the Liberal Democrats as to which party can oppose most effectively. Labour has the space to itself.

And what treacherous space it is. The Conservatives won elections easily in the 1980s, when they took a mean approach to public spending. The ministerial stinginess was not responsible for the defeat of the Conservatives even after four terms of dismal public services. It took the drama of Britain's humiliating withdrawal from the ERM to propel them finally towards opposition.

In this Parliament there is unlikely to be a single equivalent explosive crisis that will convey the same sense of doomed incompetence. No doubt there will be some bleak consequences when budgets are cut, but they will not be so vivid. A decline in public services is never easily captured as one single, defining drama. Even if the gradual deterioration of some services is extensively chronicled, almost certainly voters will fail to make connections.

When public spending was increasing, polls suggested that a lot of voters did not realise the reason they could see a GP more quickly or get an operation was a consequence of higher government expenditure. If such rapid treatment ceases to be available, they will not necessarily blame the government. They may even blame Labour, as the Coalition has so far successfully projected a narrative in which it reluctantly faces the consequence of the previous government's recklessness.

In opposition Labour also faces the problem of proving their policies would have led to better rather than worse outcomes. There is no proof in opposition, only words.

Yesterday the new shadow Chancellor, Alan Johnson, used the only weapon available to him by delivering his first speech in that role. He uttered a lot of words but answered no questions at the end, a sign perhaps that at this point the sentences are not battle-proof.

Part of Johnson's speech was important and related to the past. Perceptions of the past quite often determine the fate of parties for decades to come. Labour was still being blamed for the Winter of Discontent during the 1992 election campaign, even though that particular gloomy season took place in the first dark weeks of 1979. If voters blame Labour for the current crisis the party will be out of power for a similarly long time.

The current fashion across the political spectrum for self-flagellation among party leaders fuels the danger. With good cause Ed Miliband has distanced himself from the paralysing, fearful caution that was the defining characteristic of New Labour. But he needs to be careful that in doing so he does not appear to reinforce the sense that the economic crisis was all Labour's fault. I can hear voters now stating in a BBC vox pop, "Even that new leader says it was Labour that got it wrong".

In an astutely structured speech, Johnson argued forcefully that the current crisis did not arise from Labour's policies in the second and third term. This is an argument he needs to repeat and win, merely to secure an audience.

If he wins the debate about the past – by no means guaranteed – the audience must like what it decides to hear. This will not be easy either for Labour. Having decided to retain the policy with which the party lost the last election, a pledge to halve the deficit, Johnson seeks distinctiveness and credibility while risking both. The pledge means it moves on to the Coalition's cuts terrain and must come up with some of its own, along with tax rises that are convincing while not being too unpopular.

Supporting some cuts should not be especially difficult, but I suspect will prove to be so. The Coalition has got itself and the country in a dangerous bind by setting the target of wiping out the deficit in this Parliament. But one benefit has been a fundamental review, too speedily conducted, of how the state currently works. From the civil service to the BBC and on to the payment of benefits, inefficiencies and abuses have been exposed. Some of the cuts will improve the delivery of services and Labour should support them. The political threat, though, is that voters will respond by noting that Labour is a party that supports cuts too. They might as well vote for the Coalition, or at least the Conservative wing, which is a true believer.

Labour's attempt to be distinctive comes partly in the form of arguing for more tax rises in order to moderate the need for savagely counter-productive cuts. It has begun a familiar search for popular tax increases. Ed Miliband knows how difficult such a hunt can be; he worked for Gordon Brown when the latter was shadow Chancellor during the 1990s. Fairly quickly in opposition Brown hit upon a popular tax. With a flourish he proposed a one-off tax on the booming privatised utilities. But it took two more years of painstaking and expensive work to make the tax a practical proposition.

Casual policy-making will not work. Johnson suggested in one interview at the weekend that a bankers' tax would raise revenue as an alternative to some of the cuts. But in his subsequent interview on Sunday with Andrew Marr, he acknowledged that there would have to be international co-operation for such a tax to work, which was Labour's pre-election position and one that demands patience, perhaps eternal patience. There are no easy, quick tax rises.

They will become even harder to advance if the Conservatives and perhaps the Liberal Democrats propose significant tax cuts at the next election. To rearrange one of New Labour's favourite and utterly vacuous metaphors, in order to move forward, Miliband and Johnson need to work backwards. How can Labour win the next election proposing tax rises against the Conservatives arguing for tax cuts? They need an answer, and then credible and popular policies to flesh it out.

There are immense political opportunities for an opposition when a risky revolution is being carried out. There are very big dangers too. Labour should keep the celebratory drinks on hold.

s.richards@independent.co.uk