Labour has failed to defend its economic record. Flickr/Adrian Scottow. Some rights reserved.
Some candidates for the Labour leadership seem inclined to concede that the 1997-2010 Labour government deserves blame for errors in macroeconomic policy, in particular fiscal policy. They would be wrong to do so.
The rise in the ratio of public debt to GDP, linked to a high fiscal deficit, occurred in the crisis period 2008-10. Fiscal policy during the crisis has not been subject to serious criticism from any quarter, which implies agreement, however sotto voce, that the rise in debt was an inevitable consequence of the crisis itself, resulting from the associated drop in tax revenue together with essentially forced policy responses, such as bank rescues. Therefore attention should focus on the pre-crisis period between 1997 and, say, the bankruptcy of Lehman Brothers in September 2008.
