Warning lights on the economy – let’s defend our record or pay the price

By failing to stand up for their past successes, Labour are making it difficult for themselves to claim economic credibility.

By failing to stand up for past successes, Labour are making it harder for themselves to claim economic credibility

In terms of punchlines, the prime minister could probably have come up with a more elegant phrase at G20 than ‘red lights are flashing on the dashboard of the global economy’.

However his timing, coming shortly before it was announced that Japan has unexpectedly fallen back into recession, was immaculate.

With the polls against him, and Labour appearing to be moving on from its unceremonious Westminster wobble, Cameron will need to have luck on his side in order to win next May.

An economic downturn is unfortunate and a continued proactive defence of the Tory ability to manage the economy will be vital if the recovery comes under threat from international trends.

The Conservatives need to play a clever blame game, and we are likely to see more of this approach over the coming months, particularly if Osborne needs an external enemy to blame for further austerity measures in his final Autumn Statement before the election.

In the context of a coalition, it is extremely difficult for the Conservatives to make too many obviously ‘give away’ measures and if they try to it is likely to put further strain on the coalition.

They are likely, therefore, to have a defensive approach in relation to their own record but continue with a full frontal attack on the Labour record in government – from undermining Gordon Brown’s stable stewardship, to Alistair Darling’s strong performance when the global downturn hit in 2008.

On a number of occasions, Labour politicians have notably failed to defend our economic record to the deep frustration of many activists. In apologising for our record or tacitly appearing to agree with commentators and our opposition that we were (at least in part) to blame for the global recession, Labour has made a tactical error in terms of then being able to claim economic credibility.

Unlike Labour, when faced with the anticipated impact of waves from across the world, the Tories are defending their record – in their case in advance. On one level, Michael White, writing in the Guardian, is right that it would be unfair to blame the Tories for the global tsunami of problems heading our way. However, this is exactly what they have been doing to Labour in dismantling our economic successes.

We should, however, be more confident about our own economic record on the world stage and more consistently critical of the government’s failure in failing to deliver on two vital areas.

Firstly, they have fundamentally failed to ensure that the fragile recovery we have seen on their watch has translated in to economic benefits for those on middle or low incomes.

There has not only been an increase in the pay gap between men and women and a rise in the number of people on poverty pay, the Tory ‘recovery’ has been based on a transfer of wealth in what most people would consider the wrong direction – to the wealthy and away from the poor.

We need to stop talking in broad terms about the cost of living and make clear commitments on making work pay. The City Hall Labour cost of living survey found that 94 per cent of Londoners agreed that the minimum wage is too low to live on.

We need to stop beating about the bush in relation to the coalition’s failure in delivering a voluntary living wage and make real commitments to moving towards a statutory living wage if incentives do not produce rapid results for the lowest paid workers.

Secondly, the government line on the latest banking scandal over the weekend has distanced an ‘outraged’ Conservative front bench from having to take responsibility for having failed to force change on financial institutions effectively over the past four years.

It has been left to a relatively unexpected hero, the Governor of the Bank of England, Mark Carney, to make clear and harsh recommendations to address the need to take firm action to tackle the banking culture proposing that bankers should be fined individually out of their pay, in addition to forfeiting their bonuses.

The Tories are at the start of what is likely to be a bad week for them; they are likely to lose a second by-election and are rumoured to be facing further defections as a result.

The economy is likely to get worse and austerity has not delivered as promised. In this context, it should be possible for Labour to push hard on their economic record at home irrespective of their role on the international stage. This should be accompanied by a clear and proud defence of our own record and future plans for the economy.

Fiona Twycross is a Labour London Assembly member. Follow her on Twitter

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