The challenge is to find optimism in fiscal discipline

Townhalls and local councils should be at the forefront of Labour’s political renewal, driving innovation and reform in tough times

For the past 18 months in Britain, countless commentators have offered up the universal platitude that Labour needs to restore its economic credibility to win back power. No-one can argue with the diagnoses, but they are rarely accompanied by any sort of prescription of how this might be achieved.

In The Black Labour’s publication is a welcome break from what has become a badly scratched record. Its demand, that we acknowledge our future spending ambitions will be constrained by the wealth of the nation and the productivity of the economy, implies a recognition that come 2015 we will, should we win, inherit a horrible landscape. While unsure about labeling this core tenet ‘fiscal conservatism’, the call to get real and speak honestly with the British public is long overdue.

In truth we have allowed ourselves to be drawn into a debate that barely 2% of the UK population even understands, while the Conservative-led Coalition once again opts for the metaphor of the nation’s credit card being maxed out by Labour - something voters grasp. It is right that the longer Labour pretends to oppose all cuts to public services, the more voters will call into question the party’s economic credibility.

While we may garner great satisfaction from the intellectual superiority of our Keynesian arguments, if we want anything more than a moral victory in 2015 we need to draw a line under a debate that is better suited to the ivory towers of our leading academic institutions, than the doorsteps of Britain.

For too many people the fear and pessimism of the Tory-led Coalition trumps the graphs, tables and statistics that have become too much of an emotional crutch for the party. This is not a plea against evidence-based policy, but too often we frame our arguments in the technocratic and the bureaucratic. By way of illustration, the waving of printed out powerpoint graphs by Ed Balls at PMQs to back up his points would be a high source of embarrassment if people actually tuned in to watch it.

That is why we need to use In the Black as the foundations for moving the debate onto what US political pundits call the economics of Main St over Wall St to not only get real but to make it real for the British public. That requires we add to our armoury, alongside this paper, the answer to the other two key political and economic questions that will frame the context of the next election. Can the future be better than it is today and what is the role of government in delivering it?

The Conservative party is happy to paint a grim view of the world in which everything is broken and that government can do no good. More recently we have even seen Conservatives describe public sector work as ‘non-productive.’ We have won this debate before, but we need to win it again.

Economically, governments are the ‘risk-takers’ of last resort. They provide the basis and rules by which markets operate, guarantee the trust which economies need to thrive and grow, and correct externalities and market failures. That’s why conservative forces on both the left and the right are wrong to forge a conflict between private and public sector.

These are not new arguments, but we need to recognise that if we are to operate with lower levels of fiscal risk, we will have to operate with greater operational risk. This means a greater hunger for reform and innovation, and right now we need to demonstrate this in our town halls. We shouldn’t be afraid to close down and re-invent failing and ineffective services. Of course money helps, but we should resist the centralist temptation to think that that more money is the answer to every question.

In the London borough of Haringey, as a cabinet member for finance, I am clear that you can’t take £84m worth of cuts out of a £245m base without effecting the depth and breadth of services. But in UK’s most unequal borough voters won’t thank us if we simply spend the next 4 years defending our fortress. If we want to make progress against our number one corporate objective of reducing inequality we need to create the room for innovation and reform, questioning whether there are better ways for us to deliver services and achieve our objectives.

Doing so will show that we can deliver a better future. The current generation is the first to believe that their children will have poorer quality of lives than their own, while they themselves are seeing an extremely deep decline in their own living standards. The Tories can afford to shrug their shoulders and say non mea culpa, but our response must be bolder.

One risk is that 'In the black' is seen as an extremely pessimistic manifesto. We cannot allow this to prevail, precisely because it is this pessimism that is the beating heart of the Conservative tradition, and why I would not have chosen the term ‘fiscal conservatism’.

Our success, and our existence as a party, has always prevailed on optimism, ambition and aspiration ‒ a fundamental belief that we can improve lives and improve Britain.  This belief needs to be translated into a vision for each and every city, town centre, and rural community. We need to be clear about how we would re-invent government to drive economic growth, decentralise our economy, reduce our dependency on financial services, and create greater shared prosperity for all. In the Black is a first glimpse of an answer to how optimism can triumph over pessimism, and with it Labour over Conservatism. Let’s not waste it, because it’s not the future of our party that is at stake, but the future of the people whom we seek to represent.

This article is a response to Policy Network's discussion paper In the black Labour: Why fiscal conservatism and social justice go hand-in-hand

Joe Goldberg is both a brand consultant and a Cabinet Member for Finance and Carbon Reduction in the London Borough of Haringey. He tweets at @joedgoldberg