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

iJobs Job Widget
iJobs General

Information Security Manager (ISO 27001, Accreditation, ITIL)

£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...

C# Developer (HTML5, JavaScript, ASP.NET, Mathematics, Entity)

£30000 - £45000 per annum + Benefits + Bonus: Harrington Starr: C# Developer (...

C# Integration Developer (.NET, Tibco EMS, SQL 2008/2012, XML)

£60000 - £80000 per annum + Benefits + Bonus: Harrington Starr: C# Integration...

Biztalk - outstanding opportunity

£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...

Day In a Page

Big deal: Changing what we eat must be a better option than cutting into people’s stomachs  

Gastric bands are as useful as a plaster on a severed artery

Zoë Harcombe
Iraq crisis: How Saudi Arabia helped Isis take over the north of the country

How Saudi Arabia helped Isis take over northern Iraq

A speech by an ex-MI6 boss hints at a plan going back over a decade. In some areas, being Shia is akin to being a Jew in Nazi Germany, says Patrick Cockburn
The evolution of Andy Serkis: First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes

The evolution of Andy Serkis

First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes
You thought 'Benefits Street' was controversial: Follow-up documentary 'Immigrant Street' has got locals worried

You thought 'Benefits Street' was controversial...

Follow-up documentary 'Immigrant Street' has got locals worried
Refugee children from Central America let down by Washington's high ideals

Refugee children let down by Washington's high ideals

Democrats and Republicans refuse to set aside their differences to cope with the influx of desperate Central Americas, says Rupert Cornwell
Children's books are too white, says Laureate

Children's books are too white, says Laureate

Malorie Blackman appeals for a better ethnic mix of authors and characters and the illustrator Quentin Blake comes to the rescue
Blackest is the new black: Scientists have developed a material so dark that you can't see it...

Blackest is the new black

Scientists have developed a material so dark that you can't see it...
Matthew Barzun: America's diplomatic dude

Matthew Barzun: America's diplomatic dude

The US Ambassador to London holds 'jeans and beer' gigs at his official residence – it's all part of the job, he tells Chris Green
Meet the Quantified Selfers: From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor

Meet the 'Quantified Selfers'

From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor
Madani Younis: Five-star reviews are just the opening act for British theatre's first non-white artistic director

Five-star reviews are just the opening act for British theatre's first non-white artistic director

Madani Younis wants the neighbourhood to follow his work as closely as his audiences do
Mrs Brown and her boys: are they having a laugh?

Mrs Brown and her boys: are they having a laugh?

When it comes to national stereotyping, the Irish – among others – know it can pay to play up to outsiders' expectations, says DJ Taylor
Gavin Maxwell's bitter legacy: Was the otter man the wildlife champion he appeared to be?

Otter man Gavin Maxwell's bitter legacy

The aristocrat's eccentric devotion to his pets inspired a generation. But our greatest living nature writer believes his legacy has been quite toxic
Joanna Rowsell: The World Champion cyclist on breaking her collarbone, shattering her teeth - and dealing with alopecia

Joanna Rowsell: 'I wear my wig to look normal'

The World Champion cyclist on breaking her collarbone, shattering her teeth - and dealing with alopecia
Bill Granger recipes: Our chef gives raw ingredients a lift with his quick marinades

Bill Granger's quick and delicious marinades

Our chef's marinades are great for weekend barbecuing, but are also a delicious way of injecting flavour into, and breaking the monotony of, weekday meals
Germany vs Argentina World Cup 2014 preview: Why Brazilians don't love their neighbours Argentina any more

Anyone but Argentina – why Brazilians don’t love their neighbours any more

The hosts will be supporting Germany in today's World Cup final, reports Alex Bellos
The Open 2014: Time again to ask that major question - can Lee Westwood win at last?

The Open 2014

Time again to ask that major question - can Lee Westwood win at last?