Raising white flag on cuts is a serious miscalculation by Labour's leadership

There is no doubt we are living in interesting times. This truly could be a defining moment for the Labour Party. Many commentators are though sensing a carefully orchestrated dance here, whereby ‘Red’ Ed is portrayed as less in hock to the Unions and the Labour Party effectively distances itself from too many undeliverable promises before an election which will start in less than three years time.

It is ludicrous to expect that Ed Balls will go into that campaign promising to reverse every individual cut made by the Tories because nobody can know what the economy will be like so far ahead. We are next in line to lose our triple A rating and literally anything can happen as a result.

However for Ed Balls to say as he did at the weekend: “the starting point….is we’re going to have to keep all these cuts” sends out a completely wrong message to millions of people who want hope and not anger. Balls also knows that it is bad economics to say that Labour is signing up wholesale to the government’s present pay freeze and future pay cuts.

Pay restraint was wrong when it was tried in the past and it is wrong today. If Labour believes in jobs we need demand and investment. Not in Trident, or tax relief to the already obscenely rich but in technology, infrastructure and home building. If you seriously want to stimulate demand then cutting benefits and essential public services and by forcing pay cuts/freezes on low paid workers all you are going to do is get the exact opposite. Such measures will further constrict demand, discourage private investment, intensify austerity, and consign hundreds of thousands more to the poverty of unemployment.

So what is the game being played here?

Nick Robinson the BBC Political editor says:

“(the) announcement that Labour will back and not oppose continuing public sector pay restraint was chosen precisely because it would cause a fuss. It was a carefully selected symbol of realism meant to prove that the party is not in denial about the deficit”.

So its just another message, another attempt to spin about looking forwards and not backwards whilst reverting to type as a politician, to show how tough you are.

But if they cannot get even a nuanced change in message right what likelihood is there that they can convince a clear majority of the British people what they actually believe in.

Last year the lowest tenth of the population had a pay increase of 0.1%, while the FTSE-100 directors took home an increase of 49%. Their obscene greed really is taking the ‘yacht’.

If Labour’s leadership cannot articulate a vision different from that of the multi-millionaires in the Cabinet they will destroy the Party and condemn millions to privatisation and austerity and themselves to oblivion.