“Labour left behind a dreadful economic mess; it’s been painful for everyone the way we had to deal with it; but the policy’s working and we’ve turned the corner; so do we really want back the people who caused it in the first place?” It’s perfectly clear that that’s going to be the Tory mantra right up to the election. So what’s our answer to that since we’ve never effectively refuted the Tory canard about Labour over-spending, and by accepting austerity and Tory spending cuts we’ve deprived ourselves of the central argument that could have decisively won back the 5 million votes we lost between 1997-2010? What is so extraordinary about our silence is that all these 4 Tory allegations are plain wrong, yet we let them get away with it when they continually repeat them.
First, Labour didn’t over-spend at all since the budget deficit in 2007 just before the crash was only 2.9%, below the OECD average. It only rose to 11.6% because of the enormous banker bailouts. Even by 2010 the UK’s national debt had only risen to 77% of GDP, which compares with 77% for Germany, 84% for France, and 93% for the US. By the time of the 2010 election Labour’s spending was, if anything, rather below that of other lead countries. There was no Labour economic mess, so why don’t we say so loud and clear, and over and over again if necessary? Second, Osborne’s austerity was not the only way to deal with the deficit – a policy of stimulating the economy to generate growth, as was adopted in the US, was always a better alternative. And no, we were not all in it together – the richest 1,000 UK citizens are now £190bn better off since the crash, while the other 99% of the population are on average 9% worse off in real terms (a cut of £1,500).
Third, Osborne’s Plan A isn’t working and we haven’t turned the corner. The turnaround, fragile and limited as it is after 3 years of flatlining, is clearly based on borrowing, not on industry, jobs, investment and exports as is really needed. Consumer borrowing is, staggeringly, only 0.3% below its 2008 peak, and a new and damaging housing bubble is clearly already well under way. Even more disturbing, investment, on which the future of the economy depends, has plummeted by a quarter in real terms over the last 5 years. It is now only 14% of the UK’s GDP, compared with the global average of 24%. To put that in context, in the global investment-to-GDP ranking Britain now lies 159th in the world, behind Mali, Guatemala and Paraguay.
Why are we keeping quiet while the Tories continue to propagate lies about our record and theirs? Perhaps we should tell them that we’ll stop telling the truth about them if they stop telling lies about us. Or perhaps we shouldn’t even make that concession.