For Lord’s sake, could someone please mention competitiveness!

Politicians have found themselves swimming in new shallows this week. With the economy in deep crisis, party political debate is now dominated by Fred Goodwin’s knighthood, a couple of percentage points on or off VAT and the prospect of a trade union placeman being out-gunned by some corporate hotshots on a PLC remuneration committee.

Being kind, one could argue that these are iconic issues that reference much deeper disputes about austerity and fairness. Even then, this is still a two-legged stool of a debate unless one incorporates competitiveness. Today’s younger generation will not look back and thank Cameron and Miliband for slaying the demons of debt and unfairness while British businesses and jobs disappear in the face of overseas competition.

This is not some “Zombie Blairite” desire to shift debate to the right. We are in extraordinary economic times not just because of the Crash but because powerful companies in Asia are marching into markets that too many in the West arrogantly think belongs to them. Simultaneously, revolutionary changes in the way companies do business, driven largely by the internet, are shaking-up important sectors and opening others up to global competition for the first time. If you want a vision of the future, look at the recent turmoil in the publishing and music businesses and extrapolate that across the whole economy.

If we could be sure that we had a swathe of business in the UK that was up to this fight then maybe the lack of noisy debate on the issue might be excusable. But the truth is the UK economy still suffers from low business investment, weak skills, a very limited presence in the most vibrant emerging markets and a heck of a lot of inefficient small businesses.

There is a particularly heavy burden on Labour to rectify this situation. The Government may do bits and pieces to promote competitiveness but the truth is too many Conservatives and Lib Dems believe these issues are best left to the market to resolve. Only Labour can make the weather on promoting an unadulterated long-term growth strategy that finally resolves the recurrent weaknesses of the UK economy.

The burden, however, is doubled because without this shift, Labour would be failing to learn from its own history. It is rare for anyone in the Party to say something negative about the Attlee Government but the truth is it failed miserably to address similar problems back in the 1940s. Lonely prophets such as Stafford Cripps urged Labour to focus on modernising British business but the decision was taken to concentrate solely on building the welfare state and delivering full employment. The Tories, of course, did nothing to reverse this awful call and the consequence was the collapse of British businesses in the 1960s and 70s as super-efficient foreign competition cut a swathe through many key sectors.

The debate that followed In the Black Labour seems to have just about convinced the Party that talking about fairness without acknowledging the reality of austerity is a recipe for incoherence. Unfortunately, in an unforgiving economic world that difficult move is further complicated by the need for a strong perspective on the global market. But if the Party can really develop an agenda that responds to the synergies and tensions of austerity, fairness and competitiveness combined then it may genuinely have a serious programme for government.

Adam Lent is co-author of In the Black Labour and was formerly Head of Economics at the TUC. Follow him on Twitter: @adamjlent