“Fail to prepare, or prepare to fail”
Yesterday I took at look at the debate around the economy – and the suggestion that we should back Tory spending plans. As I set out last night, I think that would be a huge tactical error. It would hand George Osborne a massive PR victory that we’d likely never recover from. However the underlying truth behind all of these debates is that Labour isn’t yet trusted on the economy. There’s also a concern – and a legitimate one – that we’re digging our own grave on the economy. Whilst current levels of growth are anaemic, if such growth continued for a year or more it could be called a recovery. That’s certainly what George Osborne would call it.
In that situation we need to make sure our arguments are flexible enough to avoid real trouble. Whilst we’ve never claimed a double dip is on the way (despite Tory claims to the contrary), we have argued that the economy is on the wrong track. In twelve months Osborne will be trying to claim we were wrong. Three months of anaemic growth is bad, but strung out for a year it could spell growth of 1.5-2%. That’s still not great, but it’d be enough for Osborne to declare victory.
So what do we do then? Apart from arguing that such growth still isn’t good enough, and that the cuts are causing untold damage (which will must), what else could we be saying about the economy?
The central economic problem that Labour faces is our perceived lack of credibility. Whilst the language may have been a tad full on, Ivan Lewis was right – some voters think we messed up over public spending. Many of those people will never vote for us, but a significant chunk might do if we can persuade them that we’re economically competent. But we need to do more than that – we need to provide a positive vision worth voting for, and we need to find a way to minimise the risk of a future financial crash.
The former is the easy (or easier) part. We need to show how a real plan for targeted spending on the economy would stimulate growth. We need to highlight the best value for money economic stimulants that we can find and focus laser-like on them until they take hold. We need credible examples – like the construction industry – where relatively modest levels of government investment can give the economy a jump start. Then we need to ask why the government are so dogmatic that they won’t take these small steps to save the economy.
We can argue that the future would be brighter under Labour whilst trying to untangle economic debate from the debate over cuts, as difficult as that will be. Alongside our current critique of the damage (social as well as economic) that Osborne is doing to our communities, we must also be positive. Sunshine wins elections, rain and grey clouds means the voters stay at home.
As Ed Miliband said in his conference speech last year – “We are the optimists now”.