It’s time to think about the difficult decisions – Labour’s economic credibility relies on it

By Andrew Harrop and Robert Tinker

‘What would you do?’ This simple question has a nasty habit of denting Labour’s attack on the Coalition’s deficit reduction programme. The challenge of whether and how to answer ‘what would Labour do differently?’ burdens the party from grassroots to shadow cabinet. But by saying nothing Labour risk being painted as deficit deniers, with the Tories filling-out the gaps our silence creates. Be in no doubt this will be George Osborne’s line at the Autumn Statement. He desperately wants to create the impression that the only options are Osbornomics or fiscal irresponsibility and Labour silence as the next election nears will help him in that task.

New research by Michael Ashcroft suggests that potential Labour voters are asking the same question. Many of those who would consider voting Labour feel constrained by a sense that the party has failed to learn the lessons required make tough economic decisions in power. Fiscal credibility and spending what we can afford remain a key priority on voters’ agenda.

For the last two years Labour’s refusal to give a detailed answer to this question ‘what would you do’ was absolutely right. To lay out an alternative series of cuts five years before a general election would have been disingenuous and politically divisive. As events have demonstrated, predicting the future health of the economy was at that time impossible.

But as we pass the halfway stage on the road to the next election, now is the time to think seriously about the choices we would make if elected. Having been open about the scale of the challenge the party faces, a discussion of how to reduce the deficit while retaining our values and principles is the next step towards restoring credibility on the economy.

This week the Fabian Society launches the Commission on Future Spending Choices to consider these questions. Chaired by former Treasury select committee chairman Lord McFall, our wide ranging project will explore how to restrain spending in a way that maximises prosperity, security and social justice.

What can be spent will still depend on the economy of course, and the permanent damage caused by Osborne’s Plan A remains to be seen. But as the Fabian Society’s commission will show, definite choices exist about the way in which reductions in spending are made.

We should attack the Coalition’s failed approach, but to do this effectively it’s time to start thinking about the difficult decisions Labour will face if elected in 2015. Labour’s economic credibility relies on it, and as the Ashcroft polling shows, it may be the crucial factor in making our ‘possible’ supporters turn into our voters. Labour has made massive progress since the 2010 general election. Now is the time to capitalise on our achievements by starting to answer the question ‘what would you do?’

Andrew Harrop is the General Secretary of the Fabian Society. Robert Tinker is researcher to the Fabian Commission on Future Spending Choices