The battle for Labour’s past: you are all right

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Blair Brown MilibandBy Rob Marchant / @rob_marchant

Last week was the week when we – finally – dealt with head-on the subject of Labour’s economic legacy. And we seem to have been debating it ever since, because it’s perhaps the most important subject which will define a lot of the next 4 years. It’s complex, as Steve Richards argues and, paradoxically, there are two seemingly contrary arguments being advanced which are both right (or so it seems to me).

Firstly, Philip Collins is right, or at least partly so. In his (£) follow-up article he attacks Ed for “denying all responsibility” for the country’s economic woes.

He has not. He has merely stuck to the facts about the economic argument, which is not the same. Where Collins is right is that we overspent. Now, I must admit, I was almost taken in by the argument that we were merely guilty of “underestimating the tax take”. But it’s rubbish. It’s the same, underestimating the tax take, and overspending; if you underestimate the tax take, you must spend less. If I expect that I’m going to have a pay cut next year, I cut out the expensive summer holiday. I don’t keep spending and ramp up the credit card. And if I’m not sure about the pay cut, I leave a bit of rainy-day money in the bank, just in case. Gordon didn’t, and was caught with his pants down. End of story.

John Rentoul in today’s blog echoes the sentiments of Collins – he divides the world into supporters of GB Mk I (Prudence) and Mk II (crazy spender), with him in the first category. But I believe this is unnecessarily self-flagellating, and it ignores the politics.

Now, this all stemmed from Thursday’s Times (£) where Ed set out his stall for the economic debate – and stuck to the facts, as reported on Left Foot Forward. He does not say anywhere “it wasn’t us, guv”. He rightly moves the debate on from whether VAT is fair (rightly, because the public cares less about fairness, more about how it affects them personally). He points out that Labour fully agreed with the need to cut the deficit, before and after the election. He takes apart Osborne’s specious comparison with Canada. And notes that deficits rose across the developed world but we are the only country pursuing such a madly drastic programme of cuts. You know what? Ed’s right too.

In sheer economic terms, our major sin was that we ran a high deficit. So what? We are talking about a chancellor who followed his “golden rule” of no net deficit over the economic cycle slavishly for almost two full terms, and then broke it. It was an error of judgement to drop it, but hardly the worst one. Let’s put this in context: Conservative governments did this repeatedly and average debt was higher under them. They also repeatedly made terrible economic errors such as the Lawson boom, poor management of interest rates using ineffectual measures like M3, and Black Wednesday, all of which had a far worse impact on the UK economy than Brown. More than that, as many objective commentators point out, they are currently engaged in reprising once more this disastrous age of economic experimentation. We are playing the Tories’ game in beating ourselves, when they have selective amnesia on their own record.

Where does the truth lie? Well on economics, I’m afraid the Blairites are right. We screwed up. On the politics, Ed is right. Given that we only screwed up once on economics over the course of 13 years, let’s not kill ourselves over it. Why? And here is the key: because all the public will hear is the following: “we screwed up last time you put us in charge of the economy. Now, please, let us do it again.” And, in truth, we screwed up a little, not a lot. A fine distinction perhaps, but an important one.

Alistair Campbell who, as one of New Labour’s architects, you might conceivably have expected to agree with Collins, apparently does not. On the contrary, he makes the argument that it is not too late to stop Tory rewriting of history, and that it’s vital to challenge:

“the line that every difficult decision they make is forced upon them because of the so-called mess left by Labour…it can be done over time”.

All this, by the way, assumes the Collins article is not a continuation of Blair-Brown feud by proxy, for the benefit of posterity and the advantage of no-one but the Tory press: Blair was right and Brown screwed everything up. I believe Collins should have the benefit of the doubt here; that he genuinely believes the economic argument outweighs the political imperative. But the people, like Campbell, arguing against this position are those pragmatic people within the party who see the politics and who have its interests uppermost in their minds, as a conditioned reflex.

To both left and right, the real answer is simply this: we had a generally pretty successful 13 years in government and Gordon was generally a pretty good chancellor, if not a great PM. End of story. Move on. We don’t need to lose the politics in the economics: we don’t need to criticise New Labour from the right (we have the Tories for that).

Now, it is perhaps of a shame we haven’t been making the economic argument relentlessly over the last 8 months, as it’s essential to establishing a political beachhead against the coalition, who now have a big head start in winning the economic debate. And certainly Ed hasn’t done everything perfectly since being elected leader. But, please, let’s acknowledge it when he gets things right.

Rob Marchant also blogs at The Centre Left.

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