John Rentoul: Johnson learns from the Lib Dems

Promising the earth, on education or cuts, comes back to haunt you. The Shadow Chancellor chooses his words with care
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The Independent Online

A Tory minister announces plans to take state benefits away from recalcitrant claimants; rioting students smash plate-glass windows across the road from the House of Commons: it feels like the old days. Certainly some Labour MPs, as they looked out of their offices at the revolting students in Parliament Square, felt that they had come home. At last they knew which side they were on.

Yet the untold story of last week was how few Labour MPs felt that way. There were far more who looked out of their windows and worried about their credibility as an alternative government. Most had no difficulty in recognising that this was not the beginnings of a popular reaction against the coalition government.

If anything, they recognised that, had the outcome of the election six months ago been very slightly different, a Labour work and pensions secretary would have published a similar White Paper on welfare reform, and the students would have been breaking windows in Labour's Victoria Street HQ instead.

Hence the importance of the speech last week by Alan Johnson, the Shadow Chancellor, which was far from a strident denunciation of the Tories, their crypto-Tory coalition partners and all their evil works. Although Ed Miliband supported the student demand for a graduate tax to replace tuition fees before he became leader, and although Johnson was reported to have dropped his opposition to a graduate tax, all he said in the speech was that the Shadow Cabinet had agreed to "look at" the policy. My guess is that they will "look at" it for about four years.

On welfare reform, he was more explicit: "The programme pursued by the Government to get people on Incapacity Benefit back to work is exactly the one that we were due to implement over the same period." One of the harshest measures in the last week's White Paper, the "three strikes and you're out" penalty of withdrawing benefit altogether for three years for a third breach of conditions, was proposed by Labour two years ago.

And he offered a big-picture explanation of the Labour strategy for the rest of this parliament: "For Ed Miliband and me, Labour's economic credibility matters. It will be at the heart of everything we do." It sounds obvious: being trusted to manage the economy is the basic condition of electability. But how to do it?

One of Johnson's allies in the Shadow Cabinet – and there are several of them because Ed Miliband is the prisoner of his brother's supporters – explained the "Tardis" strategy to me recently: the way to win the next election is for the party to imagine itself into the future.

Imagine it is November 2014; the general election is six months away. How has the opposition party demonstrated its economic credibility?

First, it must have got its story straight about the state of the public finances it bequeathed to the coalition. Johnson's purpose in his speech was to contest what he called the Government's "fiscal fable" that it had rescued the country from the brink of bankruptcy to which it had been brought by Labour's recklessness.

In his favour, Labour starts in a strong position, the 2010 election having been, in effect, a draw between two rival "fables". On one side, Labour claimed its decisions in the crisis of 2008 meant it could be trusted to protect jobs; on the other, the Tories insisted the books had to be balanced. Johnson also has the advantage of being right. As he pointed out, the Tories supported Labour's spending plans in 2007: "If our political opponents thought that spending was out of control, that was the time to say so."

Now, however, the coalition has the advantage of being in power. It can drive home a simple message: that it came into office to clean up the mess. The idea that the spending cuts are Labour's fault is not taking root yet, but repetition and the passage of time could nurture the myth – especially as there is a germ of truth in it, in that Gordon Brown carried on borrowing too long in the boom years.

Johnson's task is to fight the mythical part, and thus preserve and build Labour's reputation for economic competence, which is damaged but not broken. Labour is not where it was after the winter of discontent in 1978-79, or where the Tories were after the ERM humiliation in 1992. But kneejerk opposition and impossible promises need to be avoided.

Douglas Alexander, welfare spokesman, writing in these pages last Sunday, showed how to do it, supporting Iain Duncan Smith's reforms in principle while reserving the right to criticise specifics if the Institute for Fiscal Studies says they are a bad idea. In his speech, Johnson hugged the Work and Pensions Secretary close by describing him as "the right man in the right job at the wrong time in the wrong government".

The question is whether Ed Miliband realises, for example, that the graduate tax should be allowed to fade away. He should know that Nick Clegg did not make his U-turn for fun: there are genuine problems with the policy. Miliband needs to look at the issue from the vantage point of 2015, by which time the question will be how to adapt tuition fees, not scrap them.

There is a bigger lesson too of looking at the next election through the other end of the telescope. Which is that the Opposition has to assume that the coalition will be a success. That in November 2014 the public finances are on the mend, the main criticism of welfare reforms is that they haven't gone far enough and the economy is growing. A party that had opposed the cuts and promised the moon would lack credibility.

Johnson asserted himself against his leader in an interview yesterday, saying that the new 50p top rate of income tax – which Miliband wants to make permanent – should be only "for the times we are in".

The Shadow Chancellor and Shadow Work and Pensions Secretary understand how to win. Does the leader?;