Labour can exploit the Tories’ loss of economic vision – but only with more meaningful dialogue

By Adam Lent

There can be little doubt that the Tories are scoring political successes with their one-note focus on cutting public spending. Hardly surprising given that the nation’s media have pretty much lined up behind them. But in the longer term, they risk making a massive political mistake by jettisoning a wider economic vision to obsess about where and when to cut spending.

Cameron may think this is a 1979 moment where the public get behind an iron leader making the tough decisions on the public finances. In fact, his offer to the electorate is not even close to Thatcher’s. Whatever one may have thought of her policies, Thatcher had a clear explanation as to why cuts had to occur and a clear vision of the type of economy she wanted to create. Cameron has neither a rationale for a period of deep cuts (other than a gut abhorrence of public debt) nor a wider vision for the UK economy. For proof, read Cameron’s much-hyped recent speech on the new “age of austerity”. As I argued recently on the TUC Touchstone blog, the speech is astonishingly weak and shot through with contradictions of which the biggest is his claim that a Tory Government will magically cut spending and improve services simultaneously. Osborne is no different, arguing that the UK can become a beacon of low carbon growth while refusing to commit the serious public investment that will be needed to achieve this.

This shallowness in the Tory agenda may escape scrutiny prior to an election but there is nothing there to sustain a party in power over the longer term. Especially when other governments – such as Obama’s and Sarkozy’s – are developing radical, ambitious visions for the future of their economies.

Labour could exploit this weakness mercilessly over coming months and years by developing its own realistic but inspiring vision of the UK’s future as a competitive and productive economy in what will certainly be a very different period for the global marketplace.

To do this, though, the terms of debate within the Party and the wider movement will need to change. The problem is we risk a debate where neither side is seeing the full picture nor acknowledging that we live in a changed world. One side of the debate is obsessed with recreating or maintaining the low tax, low regulation conditions of the last thirty years in the vain hope that wealth will be generated in the same way as the past. While the other side is interested only in how to distribute that wealth more fairly with no convincing analysis of what makes for a productive, affluent economy in what will remain a highly competitive world.

Rather than fall in to standard ideological positions, we need to have a clear discussion about what sort of global economy will emerge from this crisis. For instance, it will certainly be one where buccaneering finance capital plays a less important role which will be a comfort to many progressives. But equally the truly radical implications of the ongoing IT revolution may have full effect challenging existing working practices, employment patterns and accepted ways of life even more than has been the case in recent decades. The increasingly influential writer, Carlota Perez, has shown for example, how technological revolutions have different political and economic implications after a financial crash but ones that are no less challenging to all than what went before.

What this means for the UK economy and how our core progressive values can benefit from and shape such changes are the key questions we should be asking ourselves. But the answers are far from clear and anyone who professes certainty at this stage is deluded.

A deep, open dialogue about the way forward in a radically redefined world – rather than a fight between outdated or partial outlooks – will not only be good for the movement and the UK economy but will have the added advantage of placing an increasingly shallow Conservative Party on the defensive in the longer term.