KatyClarkBy Katy Clark MP.

We expect nothing else from the Tories than an unrelenting ideological commitment to austerity. George Osborne’s announcement that the Conservatives will look to make £25 million cuts after the next election and David Cameron’s November call for “permanent austerity” must dispel any pretence that the coalition’s cuts were a pragmatic response to difficult economic circumstances. Labour still have some way to go if we are to offer a genuine investment led alternative at the next General Election.

The biggest immediate challenge facing the Labour Party is fighting the coalition’s argument that austerity is working. Unfortunately this has been accepted by large sections of the media following recent figures showing improved growth in 2013 and unemployment at a three year low. Ed Miliband made real political headway in 2013 by highlighting the difficulties which so many families are facing with the cost of living. We now need to demonstrate to the public how this is inextricably linked to the coalition’s cuts. Cuts to in-work benefits, freezing public sector pay and consecutive real term cuts to the minimum wage are all contributing to the squeeze on household incomes.

Despite the media focus on the improved growth this should not be a difficult message to sell given the hugely unequal nature of the ‘recovery’. Recent research from the Institute for Fiscal Studies (IFS) has highlighted that the cost of living increase for the poorest 20% in the UK was significantly higher than for the richest 20%. Geographically too the ‘recovery’ looks highly uneven with the Centre for Cities think tank claiming four out five private sector jobs created between 2010 and 2012 were in London. As IFS research indicates that real incomes for the vast majority will not have recovered to pre-crisis levels by 2015 – the cost of living crisis is not going away anytime soon. We must ensure the Tories with their failed austerity policies are held to account.

We need to offer a genuine alternative to the austerity agenda. The pledge to reintroduce the 50p tax rates represents a clear commitment towards progressive taxation. We must now however make sure this a first step rather than an end point. We must make the case that it is necessary to pay a little more in tax to fund decent public services. And that it is reasonable to expect those with the broadest shoulders to take a greater share of the burden. The suggestion that a future Labour Government would be prepared to invest in capital spending, particularly in housing, to boost growth is very welcome.

Unfortunately re-emphasising the previous pledge to use the coalition’s 2015/16 spending plans as a starting point and committing a future Labour Government to further spending cuts will do little to differentiate us from the coalition parties come the next General Election. We need to explain to people what they already know – that we have huge and increasing inequality in wealth in our society. And indeed between different parts of the country. But we also need to persuade people that this is not inevitable. That there is an alternative. We need very specific commitments on how we are going to hold the multi- nationals to account and how we will take on and tackle the massive tax avoidance that has become the norm. We need to make specific commitments to employing more tax inspectors who will specialise in pursuing those who have the most ability to pay. We need to invest for growth in all parts of the country, put detailed proposals together to deliver on the green jobs we have promised in all parts of the UK and how we are going to invest in house building to ease the housing crisis and indeed cut the housing benefit bill.

We need to offer hope – to young people in particular – and persuade people we have learnt the lessons of the past and that we have the courage and conviction to take on the massive challenges we face.

The fight for a genuine Labour alternative to austerity therefore continues.

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