It’s not much of a surprise that public faith in Labour’s approach to economic policy is declining from its already negligible base. As evidence of our continued recovery gains momentum, it seems that the two Eds face the uncomfortable dilemma either of changing course or watching what little credibility they have disappear in front of their eyes.
And having watched the shadow Chancellor mis-quote some of my ideas from this blog in the House to berate the Government, it seems a timely moment to reflect on just how wrong the Opposition has managed to be. Following their advice would have made our situation far worse.
It is true that, like the Opposition, I have given voice to my own frustrations with the approach that the Coalition has adopted – but that is where the convergence with Labour ends. The Government has changed course, and we are starting to see the results. I am delighted that the Chancellor appears to have reached many of the conclusions that I have advocated, and, with an effort to stimulate private sector demand, we are making positive steps towards our future prosperity.
I suppose that it could be argued that Ed Balls has been consistent. True, he’s been wrong, more wrong and yet even more wrong again. He was the architect of new Labour’s grand vision for running the economy, and there has been little or no deviation since this theory was first created. But from the regulation of financial services through to managing the public finances, not only has he been wrong, but the damage is plain for all to see. That failure created a crisis which worsened our experience of the global financial crash, and left us badly prepared to defend ourselves in the wake of the storm.
But perhaps the greatest problem for the Labour party on economic policy is not their unswerving attachment to being plain wrong. The real injury which they inflicted was the collapse of confidence which their recklessness made inevitable. Anyone with experience of running their own business will know that confidence is a commodity valuable beyond its immediacy. The lack of confidence, which can attributed largely to the arrogant way that economic policy was delivered over those thirteen disastrous years, made our experience of recession worse, and delayed our recovery. Businesses have held back from committing investment decisions, and the Chancellor’s first priority was to provide reassurance to the international markets.
The reason that we are now recovering from the malady of Mr Balls, is that businesses and households are feeling confident once more that the economy is in safe hands. Perhaps the news last week that Labour’s credibility is in tatters reinforces that confidence. Yes, the Government has had to surrender its credit rating in the process, but maintaining interest rates under control and inflation within a reasonable tolerance is more fundamental.
The shadow Chancellor is quick to offer advice, but it seems that it is he who has the most homework to do. The Labour party has all but disappeared during the summer, and I hope that they have been using their time wisely. As we see the economic indicators demonstrate beyond any doubt that the economy is on the right trajectory, it’s time for Labour to go back to the drawing board. The successful management of the economy depends as much on credibility and confidence, and, like the economy they bequeathed when they left office, their standing lacks either. Meanwhile, the country should continue on its path to recovery, mindful of just what we have had to go through to reach this point.