Economy: Sam Dale says we must stop apologising and start fighting back

David Cameron and Nick Clegg have clearly made it their political priority to blame the recession and slow recovery on Labour.

Since the election there have been daily attacks on Labour’s economic record, with the government’s inheritance invariably described as a mess. Dave and Nick accuse Labour of economic incontinence and spending money it didn’t have. There was even the sinister suggestion – which should have caused far more offence than it did – that Labour employed a scorched earth policy before leaving office.

Peter Mandelson is portrayed as a madman throwing money around with no thought for the consequences. Dave and Nick simply can’t believe that Labour wanted to help a Sheffield firm in the recession. In their deficit-obsessed, warped minds, this is a total dereliction of duty. And, of the course, there was the ill-judged joke that Liam Byrne left for his successor, feeding the government narrative.

But Labour must fight back against this trashing of its record because it is not true and not fair.

The venom of the attacks from Lib Dems and Tories alike has been striking. Especially considering that Clegg supported Labour’s economic plans until his now infamous U-turn last spring. The attacks are gaining currency, though. A leaderless Labour party is being used as a scapegoat for an ideological desire to cut. We must defend our record.

Firstly, the deficit is the result of the biggest financial crisis in our lifetimes. The Tories can argue about the level of public spending when the crisis hit, but it is the crisis that caused the deficit. The reduction in tax receipts and the use of fiscal stimulus caused a necessary hole in public finances. The only other options were to cut public spending in a recession and not to introduce a stimulus when it was most needed. Both would have led to a deeper recession, fewer tax receipts and an even bigger deficit.

The economic statistics for Labour’s last period in office prove that we made the right choices and that Britain was reaping the benefits. The economy grew by 1.1% in the second quarter, double expectations. Unemployment has dropped again to 2.46 million, far below the three million of the early 1990s. In politics it is always hard to show that things would have been worse, but that is the difficult argument we must make.

Labour government intervention did save the world, as Gordon would say. So how can it be that after such success the anti-statist coalition is trashing the state, virtually unchallenged? We do not need to accept the right-wing narrative that we are being fed. We must start our own. Government intervention has demonstrably worked in the last few years. The money spent has kept people in jobs and nursed the economy back to health.

The economy that the Tory-Lib-Dem government inherited was not in a mess, because Labour stopped it becoming a mess. The bank bailouts, the stimulus and an active industrial policy have worked. The deficit is huge and we can’t diminish the success of Labour’s fight against the recession by not facing the challenges of recovery. But we don’t need to accept the harsh cuts and we can make the case for halving the deficit by the end of the parliament and cutting next year. We need to be an alternative government, not just an opposition.

The message should not be that Labour opposes Tory cuts, because we’ll be back in the unrealistic mode of the 1980s. But we must oppose the extent of cuts and the effect on public services and, crucially, the real risk posed to the economy. If there is a double dip recession then the deficit will get worse and we’ll be cutting harshly, the worst of all worlds.

Labour’s alternative economic vision is patient, non-ideological and the right choice. We must express it more vigorously it to fight back against the brutal vision of the coalition.

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One Response to “Economy: Sam Dale says we must stop apologising and start fighting back”

  1. Andrew K says:

    Wrong. A few apologies are in order. Not that we’ll get any.

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