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Greece is doomed. Banks are bust. And Ed Balls is silent | Julian Glover

Criticism of George Osborne is not enough. The left must offer more than the ghost of an alternative economic programme

This ought to be Labour’s moment. This week, of all weeks, should be the one in which the party can persuade us it has an alternative answer to the wrecking of global capitalism. Greece – doomed. The euro – folding. Banks – bust. The west – heading towards recession. The world is tumbling to economic implosion. If the left can’t win people over to its cause now, it never will. So stand up Eds one and two and tell it like it is.

And from them? A sort of timid evasion, gaming voters’ fears as if a general lament for lost growth and an illusory promise that necessary cuts can be made not to hurt is all they need offer even in these most alarming of circumstances. It is all very well for Ed Miliband to say on Sunday that the missing ingredient is growth. He’s right, of course. Hungry Israelites on the way to the promised land might equally well have lamented that the missing ingredient was manna. They got it. Moses had a direct line. How are Miliband and Ed Balls going to get growth? The interesting part of Labour’s plan has yet to be revealed.

The disturbing thing in Liverpool is not that Labour agrees with the coalition’s austerity plans – we know it doesn’t and has every right not to do so. The problem is different: the party has only the ghost of an alternative economic programme to offer in its place. We all know what Labour’s leaders are against. But they do not know – or cannot explain – what they are for. And yet until they do, there can be no progress.

On Monday Balls will speak and tomorrow Ed Miliband. Both have been billed as setting out an alternative vision for the economy. We shall see. Nothing so far suggests this vision exists. Not the jargon-laden article in the New Statesman by Miliband’s likable strategist Stewart Wood, which uses the dead word “neoliberal” 18 times, tempting his party with the hope of something different without touching on anything solid. Not, either, Balls’s vapid article in the Guardian on Saturday which said that “credibility is certainly not won simply by agreeing with everything the government does” as if this were an insight.

Credibility is won by credible plans. Yet Labour’s pre-conference teaser on tuition fees did not even amount to its billing, since it accepted fees must go up. More than that, it is to be funded by that old cow milked dry by Gordon Brown and still being tugged at by Balls: another miracle tax on the City of London. This raises a question. Does Labour want a rebalanced economy in which the City matters less? Or a revived, better-regulated City that can foot the bills for the welfare state, just as it did for a time in that fantasy new economy Labour believed it had built before 2008 and for which shadow ministers are now being encouraged to apologise? Punishing the City while signalling reliance on it sends contradictory signals.

Some inside Labour see the folly in opacity. They worry that Balls’s immediate brilliance when armed with sets of bad economic data is not matched by any sort of clarity on what he wants for the economy, or tax or spending. Until today the shadow chancellor has given only one proper speech on the subject since taking his job.

Maybe Miliband thinks more widely. Other Labour figures, in pamphlets such as the Purple Book published before the conference, are certainly doing so. But in the main Labour is, as is its habit when not led by people who persuade it to do otherwise, addressing its energies to the politics of redistributing growth though taxation and spending. That is fine when there is growth. But in its absence it simply amounts to a programme of more borrowing, justified now as “stimulus” as it was justified before as “investment”, and in current circumstances neither sustainable nor effective. This attitude also assumes that the absence of growth is a temporary interruption which will be rectified by state action.

But what if this doesn’t happen? What if, as looks likely, Greek default is followed by European crisis, the paralysis of the markets and, at best, a stagnant British economy in which fiscal stimulus would anyway have no effect? At this point one part of Balls’s critique of the coalition might resonate with many: George Osborne’s plan would plainly not have brought recovery. But the country would also quite reasonably ask: what would Labour do?

That is a question the party needs to be able to answer. Labour should be searching for an economic programme which describes the way money will be saved as well as spent. Maybe there’s a gap here for the filling? A de-flabbed economic interventionism that accepts government can do big things less by bailing out our failure than by setting standards, tone and direction, embracing the values of thrift, community and self-help.

It may be that, after what’s seen as the me-me centred greed of the free market and the give-to-the-poor charity posing as economic theory of the left, this is the moment for Labour to embrace a sterner and less forgiving analysis of the role of the state. The party should realise that apologising for the past, while not rethinking it, is really no sort of apology at all. © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds