A peculiar kind of lemming-like mania has gripped leading levels of the Labour Party; especially the Blairites. Although not a Blairite (more a scorned colleague), Alistair Darling’s intervention today in The Times is desperately poor.
His whole raison d’etere is trying to present Labour as the party of ‘tough cuts’ and ‘budget reduction’. As I have pointed out before this line is fatal for Labour but nobody seems to have supplied Darling with this intelligence. His economic contentions are also desperately shaky;
“My priority is to get borrowing down. Once recovery is established we have to act,” the Chancellor said.
The next spending review will be the toughest we have had for 20 years . . . to me, cutting the borrowing was never negotiable. Gordon accepts that, he knows that.”
The obvious point in response is that the recovery is far-from being established. Just because he projects it will be so does not make it so; so Kamikaze Darling launches a massive hostage to fortune and makes the fatal mistake of believing his own press. It would be nice if Darling waited until the economy showed at least one quarter growth (and thus was half-way to technically leaving recession) before making his hair-shirted comments.
The ‘Debt Crisis’ moral panic is one that Labour should be arguing against because it actually poses far more danger to the economy than the debt itself. This is especially true when you consider that as far as alot of economists argue there is an official optimism which defies reality;
The majority of economists surveyed thought the economy was rebounding and would grow in 2010. But they believed the government and the Bank of England were too optimistic about the pace of recovery.
It is thus hardly surprising that when the Financial Times surveys economists;
half warned that a rapid reduction in Britain’s borrowing would undermine the recovery.
This should open-up some clear space for Labour (or the Liberal Democrats, if they had not also accepted the prevailing discourse and chucked-out things like the Green Road out of Recession) to argue that reduction of the deficit is by no means the most pressing priority and that this crisis offers an opportunity to invest and grow sectors whose long-term growth would be highly beneficial. However, Darling has squandered that opportunity for Labour and in doing so will do as much, if not more, electoral damage than Hoon & Hewitt.