Labour now has the chance to paint a bigger economic picture

http://www.guardian.co.uk/commentisfree/2013/jan/02/labour-paint-bigger-economic-picture

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Nick Clegg is asking the wrong question of Labour. In an article in the Times (paywalled link), he questions what Labour would cut to finance its opposition to the benefit cuts. He demands: "Labour must show how they'd pay for it. Would they cut hospital budgets? Schools? Defence?". It is a piece that sets out some well-trodden defences of the government, but focuses on the opposition. It's essentially a repeat of the same "what would Labour cut?" argument that both government parties have been peddling since they came to power.

Politics has a rhythm and Nick Clegg knows this. Sure, he may be the man with whom no one now wants to dance, but that doesn't mean he's forgotten the moves; especially as his own government's fixed-term parliament act has regulated that rhythm more formally than anything that came before.

The "so what would you cut?" is at once both too old an attack to have resonance and asked too early to have meaning. With the government ensuring the opposition has a full five years to set out its policy stall, Labour politicians know they have time to privately work on the details of what they want to do. Meanwhile they can spend their time publicly excoriating the government every time it fails, building on the narrative of its ineptitude and failure and ensuring that this incompetence is ingrained in the public minds long before electioneering begins in earnest.

In this, the coalition is proving to be a perfect foil. 2013 will be the year that events are likely to further destroy the government's credibility – so much that could go wrong is lined up to do so this year. The government will have to be either astonishingly competent or exceedingly lucky to avoid all the traps that lie in wait. Neither is likely.

More importantly, the question Clegg is asking of Labour shows a man, a party and a government still wedded to the economic orthodoxy of the last 30 years; an orthodoxy that Labour has vowed to change. Clegg is working within the framework of the current economic model; one that sees government as largely passive on the economy, managing the proceeds but not seeking to interfere in how those proceeds are generated. By focusing only on cuts and spending of the proceeds of tax, he ignores the bigger challenge of changing the economy: redefining the role of government so that it has more say in both growing the economy and the distribution of the proceeds of such growth.

"How would you change our economy?" would have been the more challenging question. It's the question that it took Labour a long time to reach – the answers will take longer.

There are those within Labour who do not believe that it is the right question. Those on Labour's right wing are as wedded to the orthodoxy as the Conservatives, though often with regret, not relish. Their belief in fiscal "realism" is closer to trying to answer Clegg's question, working within the bounds of the present to protect the vulnerable and provide growth.

But make no mistake, the appointment of Jon Cruddas to head the policy review alongside Ed Miliband's one-nation framework has emboldened those seeking to make far-reaching changes. One nation, and the challenge to the orthodoxy it represents, is now the settled framework that Labour will use to fight the next election.

Labour will not be answering the "what would you cut?" question now, as it does not see cuts versus spending as the principal difference between them and the government. Miliband and Labour believe that by pursuing the bigger challenge of fundamentally rebalancing the economy, they can fight the next election on the classic "change versus continuity" model. If they get the offer of a one-nation economy right, they can be the party of hope – a powerful electoral force.

Labour has space to consider these issues and to change the narrative, but 2013 must be the year in which it starts to define how a one-nation economy will work, how it will feel tobe part of it and what must be done to achieve it.

These are tougher questions than tinkering with a cut here and a spending increase there. It is a braver strategy than just hoping the coalition's failures lead them to defeat, followed by Labour taking over and better managing the same economy. The details won't be those asked for by the unimaginative Nick Clegg, but 2013 must be the year that these questions start to be answered.