Listen to John Prescott on the Today programme this morning and you may begin to
understand the complexity of the task Labour faces. Prescott was putting the best gloss he could on Labour and the vastly incompetent civil service wasting hundreds
of millions on regional fire stations. Listening to his bluster, even the most loyal Labour supporter might have been glad that the party was no longer in office. Prescott showed no remorse; no
appreciation that the burden of taxation falls on working and middle class people, who need to hold on to every penny they can. As with so many left-of-centre politicians, he did not regard the
waste of other people’s money as a sin.
According to the rules of the political game, Labour should realise how much damage its nonchalance with public funds has done it, and trim and triangulate accordingly. It should support cuts and make a point of denouncing the new regime’s extravagances.
But Labour cannot just triangulate. It has a duty to the nation to argue for Keynsian reflation of the economy. As the IMF World Economic Outlook said yesterday, governments that try to cut budget deficits too fast will “kill growth”. Killing growth is precisely what the coalition is doing to Britain.
No one can make the argument except Labour. The Liberal Democrats in power have proved to be a flop, as some of us warned you they would be. For all the phoney wars and mock battles between Lib Dems and Tories we see in the conference season and in the pages of the Spectator for that matter, on the big issue of dealing with the recession, Nick Clegg and Vince Cable are just as wrong and just as dangerous as David Cameron and George Osborne are. Labour has to argue against them and make the case for using public finance to boost domestic demand. If the crisis in the Eurozone turns worse, and there are good reasons for suspecting that it will, the need for an alternative economic policy will be all the greater.
Labour’s dilemma is this: the policy it must advocate will fuel the public perception that it remains Prescott’s party of spendthrifts.
For what it is worth, I believe Labour can wiggle off the fork by making a great show of accepting cuts, even those cuts that hurt its own supporters – reducing public sector pensions being the obvious example – that don’t directly affect employment and growth. Ed Miliband and Ed Balls need to repeat until they are hoarse that shadow ministers are not allowed to make spending commitments without their approval, and discipline those who don’t toe the line. They will then have the space to argue for the building of new roads, railways, homes and a broadband network. In short, Labour needs to think hard about how it can win the right to a hearing, because the argument it should be making needs to be heard.
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