What is so extraordinary about the fallout from these local elections is how far the wider Tory leadership is in denial.   The Tory Right immediately goes on the rampage demanding a harder line on crime, immigration and Europe, as though the loss of jobs, falling incomes and absence of growth were nothing to do with it.   The Daily Mail front page headline today “Now stick up for Tory values”, as though privatisation of all public services, liquidation of the Welfare State, and the social cleansing of inner cities via housing benefit cuts were not enough.   Grant Shapps claims on the radio that if the government hadn’t pursued its economic course, we would now be in the state that Greece is in.   Boris Johnson advises Cameron that the secret is ‘to remain bone dry on the economy accompanied by compassionate Conservatism’: it’s difficult to know which is worse, since the only people Johnson seems compassionate towards are his bankers in the City.   Cameron, we are told, is going to argue alongside Clegg on Tuesday that ‘the fight to rebalance the economy remains the glue that keeps the two parties together in government’; well theat’s certainly news since there’s no rebalancing of the economy and any glue left is set to come apart.

Labour gains of 823 seats are obviously a triumph that makes the party not only dominant in local government but on track to regain government in 2015 (or sooner when the glue finally cracks open).   But an overall turnout of less than a third shows that too large a part of this came from Tory abstentions and too little from the inspiration of an alternative Labour vision.   Labour’s policy review remains stranded on a beach somewhere and thed gaping political void which is Tory economic policy has not been filled by a Labour strategy for jobs and growth which cries out to be heard.  

Labour too needs to state loud and clear the overriding need for a new activist role for the State against the excesses and abuses of market fundamentalism, nailing in particular endless austerity, colossal deficits in traded goods that make the British standard of living unsustainable, over-reliance on still growing mountains of private debt, and grotesque levels of inequality.   We urgently a plan to shift the bankers from their preoccupation with property, overseas speculation and tax avoidance, and make finance the servant of industry as the driving force for a major revival of British manufacturing.

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