The Tories have a clear plan for their austerity programme which is to discredit Labour’s economic record, blame the situation they inherited from Labour for all the cuts they will make and suggest that anyone who doesn’t support their programme has no worthwhile economic proposition at all. 

 It is a plan which should be challenged at each point.  But it would also be a mistake to suggest that anyone on the centre left who wanted to address the issue of the deficit was somehow endorsing the Tory plan.  That isn’t true and would appear to suggest that there was no worthwhile difference between the plans on which Labour and the Conservatives fought the election. 

Yet the difference between the two parties is being felt every day in issues from the abandoned school building programme to cancelled regeneration projects and support for key industrial projects such as the Sheffield Forgemasters plan to make Britain a key player in the worldwide civil nuclear supply chain.

Labour won power in 1997 partly because we had worked hard to develop economic competence, to move on from a reputation for having big hearts but soft heads when it came to the nation’s finances.  We didn’t lose that focus in government.  We presided over the biggest increase in GDP per head in the G7 between 1997 and 2009, even after taking into account the financial crisis.

Of course the global financial crisis and our response – designed to stop recession turning into depression – meant borrowing was raised but this was a choice, a judgement we made. 

Labour fought the election on a plan to reduce the deficit over a longer timescale, with a different balance between spending reductions and tax measures and with key priorities protected.  That plan would have required some tough decisions and there’s no getting away from that.  We had already announced some spending reductions in the PBR last year and had proposed for example changes to civil service redundancy terms.  But Labour’s approach would have been very different to the Tory plan now being rammed through, a plan characterised by deep cuts started before recovery is established, with no regard for the impact on the private sector or future industrial opportunities for the country.

Labour’s plan would have had, at its heart, an active role for Government in promoting growth and ensuring Britain tried to develop key capability in areas of future employment growth such as low carbon vehicles, the digital economy, green energy and other areas.

The Tory deficit plan pays no regard to these areas.  This week’s document issued on this had little to say.  In fact, in addition to cancelling the Forgemasters loan the Government seems to be giving up on plans for a Green Investment Bank.  And their plans for abolishing the RDAs and cutting support for the regions will make recovery and growth even harder to achieve.

Cutting the deficit in the way they are doing is faith based economics, with the Tories playing the role of high priests and the Lib Dems displaying the zeal of the recently converted.

The challenge for the Labour Party is to address the deficit in a way that also includes a drive for the growth and jobs of the future.  And that’s a far cry from what the Tories and Lib Dems are doing.

The Rt Hon Pat McFadden is MP for Wolverhampton South East  and Shadow Secretary of State for Business