Osborne’s approach isn’t a gamble – it’s a catastrophe

By Lisa Nandy

There is a tremendous appetite in the Parliamentary Labour Party to debate where we went wrong, where we went right and most importantly where we go next. Often it feels like it descends into academic discussion while schools and housebuilding programmes are cancelled out in the real world, but there is a serious point behind it. Somehow it seems the Tories have managed to convince people that the only way out of the recession is to make savage cuts.”‘We have a huge deficit that we have to repay”, the argument goes, “so the cuts are inevitable”. It’s easy to see how this sort of belief takes hold; it’s a straightforward return to Thatcher’s “balancing the household books” approach. If you owe money, you pay it back.

If you listened to some of the Labour Leadership candidates you might also be forgiven for accepting this as a truism. The only difference between the two sides, it appears, is that the coalition will make harsher, unfair cuts that protect the rich, while Labour will act more cautiously and slowly, and protect the poor.

But to those who have read their history books this is a false choice. History and contemporaneous examples from countries such as Ireland tell us that the only way out of this kind of global problem is to grow the economy and many esteemed economists have argued that the biggest multiplier effect comes from government investment. This might be counter-intuitive on an individual level but, as Colin Burgon, former MP for Elmet put it “how many households do you know that print their own money?”

I went to three meetings this week where we heard this view put forward forcefully by a series of well-respected economists with an international reputation. In their view, Osborne’s approach isn’t an economic gamble – it’s an economic catastrophe. But where is the voice for this outside of parliament?

Meanwhile, the announcements about the schools building programme caused chaos around the country, including in the Wigan area where we had new schools in the pipeline that have now been axed. Our one newly built secondary school, which I wrote about last week, is a shining example of what government can bring about. My view is that it is exactly these projects that need to go ahead if we are to protect the economy in the long term. From that vantage point it seems bizarre to hit children and their parents hardest, but over the last few weeks that is exactly what this government has done.

Despite this, it was the manner of the announcements that caught the headlines. It was extraordinarily careless to produce a number of lists over several days, riddled with inaccuracies, and has resulted in heartache for communities up and down the country. Responding to Gove’s statement, the Tories accused Labour of ‘synthetic anger’. Privately, many on their benches were furious, but I think we must all focus our anger and rhetoric on the wider economic debate in order to protect those who need it most.