Jim Murphy’s comments regarding Labour’s plans for spending cuts – which can be found today in The Guardian – reflect what we have been hearing from Ed Miliband and Ed Balls about future spending. The real key is different economy as in this from ‘In The Black Labour’:
…social justice is advanced far better by bold reform and well-targeted investment than public spending: this applies to the public sector as well as the private. Ultimately, this will force the left to articulate a different conception of the state.
Even in times of fiscal restraint there is a central role for the state as a generator of greater wealth, equity, and security. But these benefits will have to arise through a policy framework designed to deliver a regionally and sectorally balanced economy. Labour should be shaping this debate by developing detailed policies on how ideas such as a state investment bank, innovation-focused public procurement, reformed taxation, stronger consumer rights, and greater competition can be used to give the UK’s most innovative entrepreneurs real support while also improving pay and social mobility. In short, Labour needs to take a forensic and honest look at how a pro-active growth and innovation policy can coincide with the goal of a fairer economy.
Underlying this is the recognition that welfare mechanisms are never preferable to a genuinely productive and balanced economy that raise the living standards of those on low and middle incomes. In the coming decade, the extra resources New Labour found to compensate for marketbased inequality won’t be available. So deeper and more ambitious reforms must be confronted to ensure the economy works for working people.
In the Black Labour is a discussion paper put together by Policy Network. It aims to start a discussion in the Labour movement on how to achieve fiscal sustainability.
Jim Murphy is Labour’s Shadow Defence Secretary.