Labour's right to join the economic debate is under attack

Osborne's attempt to create a sense of equivalence between Fred Goodwin and Ed Balls is a threat to

George Osborne's speech had two distinct purposes. The first and most obvious was to show that the government is not complacent about the stagnating economy and the effect it is having. This he aimed to do with a rash of announcements, the most significant of which is surely the interest in "credit easing", by which the Treasury lends directly to firms. As my colleague George points out, this looks like a tacit admission that Project Merlin - the deal between government and the banks to increase the supply of private sector credit - is failing. It is worth adding that other devices that were meant to stimulate the economy by disbursing government cash, notably the regional growth fund, are also implicitly belittled by this move. The growth fund has yet to actually hand out any money.

The second of Osborne's tasks was to reinforce the coalition's central political message about Labour's responsibility for creating the crisis. This Osborne did with a sleight of rhetorical hand, embarking on what sounded like an attack on the bankers but blended seamlessly into an attack on the shadow chancellor. The aim is to create some sense of equivalence in people's minds between the dereliction of responsibility shown by the likes of Fred Goodwin at RBS and the fiscal management of the last government. It is a crude device but one that poses a big threat to Labour. Osborne doesn't want to beat the two Eds in an argument on the economy, he wants to trash their moral credentials to even participate in an argument about the economy.

Given how effective the Chancellor has already been in promoting his account of Labour profligacy as the prime cause of austerity, Miliband should be worried by this renewed assault on his entitlement to have a view. The argument Miliband made in his conference speech - that the Tories' economic analysis represents the last gasp of a failed model of irresponsible free market capitalism - requires a degree of historical and ideological perspective that many voters don't bring to bear when apportioning blame. Labour badly needs a sharper rebuttal.

One other point on Osborne's political calculations: The heavy emphasis on the failings in the eurozone was inevitable, but the tone, essentially blaming continental governments for creating the conditions that are now holding back the UK economy, was new. The Chancellor clearly felt the need to lash out at "Europe" in some way to appease the large numbers in his party who see the single currency crisis as an opportunity to renegotiate Britain's whole settlement with Brussels. But I sense another element to this argument. Osborne lavished praise on William Hague for his 2001 election campaign dedicated almost entirely to demands to "save the pound". The Tories lost by a landslide. Now that the euro is in dire trouble, Tory strategists are sensing an opportunity to salvage some credibility from their wilderness years. This isn't so much a eurosceptic argument as part of the Tory "decontamination" agenda. Osborne seems to be re-branding old political failures as a kind of foresight.

The Chancellor doesn't just want to monopolise economic argument in the present and future, he wants to rewrite the past too.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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Sadiq Khan gives Jeremy Corbyn's supporters a lesson on power

The London mayor doused the Labour conference with cold electoral truths. 

There was just one message that Sadiq Khan wanted Labour to take from his conference speech: we need to be “in power”. The party’s most senior elected politician hammered this theme as relentlessly as his “son of a bus driver” line. His obsessive emphasis on “power” (used 38 times) showed how far he fears his party is from office and how misguided he believes Jeremy Corbyn’s supporters are.

Khan arrived on stage to a presidential-style video lauding his mayoral victory (a privilege normally reserved for the leader). But rather than delivering a self-congratulatory speech, he doused the conference with cold electoral truths. With the biggest personal mandate of any British politician in history, he was uniquely placed to do so.

“Labour is not in power in the place that we can have the biggest impact on our country: in parliament,” he lamented. It was a stern rebuke to those who regard the street, rather than the ballot box, as the principal vehicle of change.

Corbyn was mentioned just once, as Khan, who endorsed Owen Smith, acknowledged that “the leadership of our party has now been decided” (“I congratulate Jeremy on his clear victory”). But he was a ghostly presence for the rest of the speech, with Khan declaring “Labour out of power will never ever be good enough”. Though Corbyn joined the standing ovation at the end, he sat motionless during several of the applause lines.

If Khan’s “power” message was the stick, his policy programme was the carrot. Only in office, he said, could Labour tackle the housing crisis, air pollution, gender inequality and hate crime. He spoke hopefully of "winning the mayoral elections next year in Liverpool, Manchester and Birmingham", providing further models of campaigning success. 

Khan peroration was his most daring passage: “It’s time to put Labour back in power. It's time for a Labour government. A Labour Prime Minister in Downing Street. A Labour Cabinet. Labour values put into action.” The mayor has already stated that he does not believe Corbyn can fulfil this duty. The question left hanging was whether it would fall to Khan himself to answer the call. If, as he fears, Labour drifts ever further from power, his lustre will only grow.

George Eaton is political editor of the New Statesman.