To read the headlines last week would suggest that the Labour leadership has had a Damascene conversion to the fiscal realities faced by any serious political party planning to run the UK.
Certainly, there is some reason to take that view.
In his Canary Wharf speech on Monday, Ed Balls was surprisingly frank on several issues. One was that growth couldn’t not “magic away” the deficit. The other was that cracking down on tax avoidance could not somehow raise billions of pounds overnight. And overall, he said, a Labour government would have to govern with “iron discipline”. That, according to aides, means accepting the coalition’s fiscal inheritance at least for a year or so.
Chris Giles, our economics editor, is among those impressed by the new stance.
“The good economic news is that the 2015 battle is unlikely now to be fought on a phoney argument pitting austerity against growth. Instead the electoral choice will hinge on the spending priorities of the next government amid tight constraints and the economic credibility of politicians.”
The most obvious political consequence is that Labour will no longer be able to oppose Read more