Labour has let Tories win argument on economy

The Conservatives have been busy trying to recreate the political choices of the 1980s

Share
Related Topics

Despite the pain of cuts and division over Europe, the outcome of the next election is in the balance. The public will decide who to vote for based on which party they think will deliver a stronger economy to pay for a fairer Britain. At present, the jury is out.

“Labour messed up the economy and the Tories are making it worse so why should I vote for either?” one voter asked. “And now that Labour says it won’t reverse the cuts and will spend the same as the Tories, what’s the point of Labour?” another demanded.

The party’s challenge is to provide a compelling case as to why Britain would be better off with Labour. Firstly, the problem is that the electorate doesn’t yet see a clear choice between the parties on cuts vs growth. Secondly, the Tories have been relentless in asserting that Labour messed up the economy.

Not rebutting this charge makes us look like a shamefaced schoolboy admitting responsibility by omission. And if we don’t rebut the accusation, it will simply amplify as the election approaches. 

True, the deficit went up once the sub-prime tsunami hit our shores but it was Gordon Brown’s and Barack Obama’s fiscal stimulus that ensured a mild recession in 2008-09 instead of a depression and meant GDP was growing again by 2010.

Only a third of the 2010 deficit was due to Labour investing above earnings to keep the economy moving forward, with two-thirds caused by the bankers. In a downturn, that is the correct economic strategy. To cut in a downturn makes things worse but that is exactly what the Coalition has done.

In his 2010 Budget, George Osborne announced 500,000 job cuts in the public sector, which ensured public-sector workers started saving instead of spending in case they lost their jobs. The switch from growth to cuts will mean the debt to GDP ratio will grow from 55 per cent in 2010 to 85 per cent by 2015.

The Tories are cutting deepest in the North and Wales – where there are more public servants – and spending most in London and the South-east – where there are more Tory voters.

Meanwhile, the poor who spend all their money by necessity and help the local economy are being hit hardest to pay for the bankers’ folly.

Labour needs to set out a vision of a stronger Britain that provides the economic confidence to invest and consume to stimulate jobs and growth. The Conservatives have been busy trying to recreate the political choices of the 1980s – between an “all heart and no mind” Labour which would tax and spend Britain into bankruptcy vs the hard-nosed business sense of the Tories making tough choices in the nation’s interests.

Labour needs to talk the talk of UK plc – boosting the UK’s productive capacity by linking industry, universities and councils. We need a sharper focus on the growing export opportunities to China, India, Brazil and Russia. We must invest in homes and transport, use public procurement as an engine to grow small and medium-sized firms.

The European elections next year are an opportunity to put growth and jobs centre stage. The central question is the cost to trade, investment and jobs of spending four years arguing about whether to walk away from Europe. Inward investors from growing economies want access to the world’s biggest market – Europe – and not to pay a 14 per cent tariff to export from a detached island. We need to continue a journey towards jobs and growth, not to be diverted into a cul-de-sac of more cuts.

Geraint Davies, MP for Swansea West

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Process Improvement Analyst (Testing)

£40000 - £45000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...

Service Delivery Manager - Derivatives, Support,

Negotiable: Harrington Starr: Service Delivery Manager - (Derivatives, Support...

Technical Account Manager - Java, FIX Protocol, FIX 5.0, C++

£30000 - £55000 per annum: Harrington Starr: Technical Account Manager - Java,...

WPF .NET Developer

£300 - £350 per day: Harrington Starr: WPF Analyst Programmer NET, WPF, C#, M...

Day In a Page

Read Next
 

The daily catch-up: heatwave update; duck tape and market socialism

John Rentoul
David Cameron's 'compassionate conservatism' is now lying on its back  

Tory modernisation has failed under David Cameron

Michael Dugher
Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen
Five things we’ve learned so far about Manchester United under Louis van Gaal

Five things we’ve learned so far about United under Van Gaal

It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform