Bernard Ingham: Why Labour is bankrupt of ideas as its world collapses

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PERHAPS there is still some justice in this world. Who will be most handicapped in framing their election appeal next Spring? Why, Labour, of course, because there is not much money around – certainly not for the responsible who recognise the need to eliminate the £100bn budget deficit.

There could be no greater justice than this because Labour left the Treasury empty in 2010. Liam Byrne, then Treasury Chief Secretary, insouciantly informed his coalition successor that there was no money in the kitty at all.

Nor is there any more cash around now when servicing our national debt costs more than the entire defence budget.

So Labour is hoist with its own petard when it comes to writing a manifesto since it has always been keener on spending than creating wealth.

The tensions are already beginning to show. Many Labour MPs don’t think Ed Balls has an economic strategy and want him to come up with something pretty smartly.

He has a problem. His every ploy since the election has turned to dust.

He was against Chancellor George Osborne’s modest but pretty consistent austerity.

For months, if not years, he goaded David Cameron and George Osborne in the Commons over a “flatlining” economy. Now it is the fastest growing in the West. Osborne stands vindicated and has an 86 per cent approval rating among Conservative activists.

With unemployment falling, employment at a record level and Iain Duncan Smith apparently getting people off benefits and into work things are really looking up.

So much so that the Ed Miliband/Ed Balls cost of living crisis is evaporating as wages rise above inflation.

Balls may be right that come the next election the average family will be £974 a year worse off than in 2010. But the Tories will throw it back in his face. “And who was responsible?”, they will ask, pointing their collective finger at the proven profligate.

But that is only part of Labour’s problem. Allow me to introduce you to Neanderthal Man, otherwise known as Len McCluskey, general secretary of the Unite union, which up to now has poured money into the Labour Party.

He sees this as the “defining moment” in Labour’s history. He has no time 
for “a pale shadow of austerity” and threatens to bestow his financial favours elsewhere unless Miliband offers “a radical vision”.

So far Labour MPs complain they have seen nothing remotely resembling an economic vision, radical or otherwise. The biggest idea around is to devolve responsibility for spending £20bn from Whitehall to local authorities apparently in a bid to spread economic activity more evenly across the country.

The objective is admirable but has greying, post-war whiskers on it. This is not surprising, given the poverty of local leadership.

Their forte, apart from paying themselves handsomely for attending council meetings, seems to be squeezing the last penny out of the motorist, fining residents who rent out their drives for parking and publishing “local Pravdas” – newspapers in praise of their own performance.

Meanwhile, we are told, Miliband wants to nationalise the rail industry line by line – thereby re-arming the trade unions with an effective strike weapon – and freeze rail fares on top of freezing energy bills, which has come in for some heavy economic stick.

Oh yes, and the Fabian Society wants a 10 per cent levy on all estates at death, as if inheritance taxes were not enough.

This makes me wonder whether Labour has a death wish along with that of the Liberal Democrats who love Europe, the cruelly exploited Human Rights Act and gash greenery such as wind farms.

They are even blocking fairer constituency boundaries, no doubt to give them the best chance of staying in a coalition.

McCluskey is right. This is a defining moment for Labour. Which way is it going to turn?

Is it ready to defy McCluskey’s counter-productive nonsense that will leave the working man and the so-called squeezed middle unnecessarily worse off?

Can Miliband and Balls fashion a manifesto relevant to the nation’s condition and needs by convincingly and unashamedly embracing the aspiring working classes? This would require a revolution notably in their attitude to education, welfare, taxation and spending.

But, don’t forget, there’s gold in tax cuts. HM Revenue says the better off have paid £9bn more in tax since Osborne cut the top rate from 50 to 45 per cent.

Labour’s world is being turned on its head.

Has it the wit and will to refashion itself? If not, will justice still prevail? That is the question for the next election.