Leading article: Time to lay the ghosts of Labour's economic past

When the Opposition might expect a double-digit poll lead, Labour is barely ahead

Wednesday 07 December 2011 01:00 GMT
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By all accounts, it should be a good time to be in Opposition. What green shoots of recovery there were are all but dead. Last week's public sector strike was the biggest in a generation. Even the Chancellor has been forced to admit that the economic outlook has worsened materially, and his self-appointed task of eliminating the public deficit within one parliament is no longer possible.

But where the Opposition might reasonably expect a double-digit lead in the polls, Labour's ratings are flat, barely a whisker ahead. More troubling still for Ed Miliband is that sizeable chunks of the public both blame Labour for our economic woes and trust the Conservatives more to deal with them. Individually, George Osborne's cuts may be unpopular. But in the aftermath of a global recession blamed on over-indulgence, and in the midst of a eurozone crisis ostensibly caused by unaffordable debt, there is widespread – if resigned – public support for austerity.

Against such a background, even the economic authority of John Maynard Keynes sounds, in the mouths of Labour politicians, too much like the stereotypical profligacy of the left. Therein lies the Labour leadership's most immediate difficulty – the lack of economic credibility. Simply re-stating the arguments for stimulatory spending will not help. Neither is it practical, as some suggest, to try to turn the debate away from the economy to health or education. But there is a remedy, albeit an unappetising one. Labour must be seen to take responsibility for the past. With both leader and shadow Chancellor so closely associated with Gordon Brown's now-discredited chancellorship, there is no other way to defuse the Coalition's repeated claim that Labour overspending ranks alongside global financial meltdown and the eurozone crisis in causing the current misery.

In fairness, there have been hints. In his party conference speech, Ed Balls admitted that Labour got the regulation of the City wrong. But both he and his leader must go much further. Gordon Brown's claims to have ended boom and bust must be openly repudiated alongside an explicit recognition that spending ran too high, for too long.

Only then can Mr Miliband hope to address his broader challenge. With society more unequal than ever, despite 13 years of Labour government, and public services insufficiently improved to justify the vast sums spent on them, and the vast debts racked up as a result, more than anything else he must explain what the Labour Party is for.

Even with a consensus on austerity, there is still political room for manoeuvre. Starting with the question of how cuts can be apportioned fairly to ensure that we are "all in it together", Mr Miliband must also outline how Labour's goal of a fairer society can be delivered without simply opening the public purse. That means developing a narrative about smart reforms, rather than spending. It also means focusing on the private sector as well as the public. Incoherent moralising about predators and producers must give way to sensible plans to stimulate growth and encourage innovation.

The biggest danger is complacency. Despite the dismal polls, there is a sense among many in the Labour rank-and-file that there is plenty of time between now and the next election for Osborne to dig his own political grave and the sins of the previous Labour administrations to be forgotten.

As a strategy, it amounts to little more than keeping one's fingers crossed. Unless Mr Miliband acts quickly, he risks entrenching public scepticism and condemning his party to years in the wilderness. Not only is that no good for Labour. It is no good for Britain. In these troubled times, we need a credible Opposition more than ever.

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