Plus: Tributes to Michael Foot

The President has taken a contradictory approach since the revelation that he has sired his 20th (recorded) child – yet another one out of polygamous wedlock. First, he issued a belligerent statement saying this was his private business. Then, as (black) public opinion turned against him, he apologised.

As President, Zuma already seemed lacklustre and directionless. Today he is the butt of ribald jokes, a lame duck barely one year into office.

Politicians everywhere claim the perks of high office, but the moment they are exposed for any misdemeanour, they insist on being treated as “an ordinary citizen”. So what is “the public interest” regarding public figures?

In South Africa, we are fortunate in not yet having Rupert Murdoch as a local newspaper proprietor. Thus political reporting here is not confined to paparazzi crawling through the undergrowth to snap a minister with his pants down. Murdoch’s tabloids define the public interest as anything that sells newspapers: hence the cult of celebrity and triumph of Murdiocrity.

This is significantly different from stories that inform us of what we need to know as voters: corrupt officials, criminal arms deals – or ministers who lecture “ordinary citizens” to do one thing while themselves living by entirely different standards which they wish to keep secret.

Of course, there are hotly contested overlaps. Bill Clinton spent years of his presidency bogged down with investigations into his liaison with a White House intern. This led to farcical quibbling over what constitutes “sex”. On the other hand, there has been no official investigation into whether his successor, George W Bush, consistently lied and manipulated evidence to justify his invasion of Iraq, with the loss of many thousands of lives.

At the time of Clinton’s Monica Lewinsky woes, it was remarked that he embodied an old rural American adage (to be said with a deep Southern drawl): he’s a hard dawg to keep on the porch. Jacob Zuma’s proliferating spouses are also experiencing this difficulty.

However, in the case of Zuma, there is a clear public interest factor. How on earth can he afford the upkeep of 20 (known) children?

Zuma’s legal woes began when he was Vice-President, precisely because he could not finance his own lifestyle. As was revealed in graphic detail in court, a shady businessman called Shabir Shaik paid large sums for most of Zuma’s daily living expenses – he even paid his outstanding ANC membership fees. Significantly, Shaik also paid sizeable amounts for the education of Zuma’s already numerous children at expensive schools. Shaik ruthlessly sought to cash in on this financial dependency and was subsequently imprisoned.

Today Zuma has a presidential salary. Yet benefactors continue to pay for celebrations and additions to his fabulously costly new rural homestead. So it is utterly legitimate to ask: who currently pays the school fees for all the President’s children – and if not Zuma, what do the “sponsors” expect in return?

Many African National Congress leaders now live ostentatiously beyond their formal means. But if journalists ask about who pays the piper, these public figures cry: we’re ordinary citizens entitled to our privacy.

In Zuma’s case, his begetting of offspring to almost biblical proportions has other ramifications. This even led to the proposed judge in his rape trial having to recuse himself – as the judge’s own sister had produced a son by Zuma.

As president, it cannot be good when his personal behaviour dominates headlines and becomes a national joke. Was it of public interest that Boris Yeltsin, when Russian President, was frequently a fall-down drunk? Is it of public interest if Italian Prime Minister Silvio Belusconi makes off-the-cuff pro-fascist remarks, cracks racist jokes or cavorts with teenage girls and hookers? You bet.

In these matters, the ultimate benchmark was set by the first great modern war correspondent, William Howard Russell, The Times correspondent during the Crimean War. He wrote a series of devastating scoops, particularly exposing the inept leadership of the effete English aristocrats leading the British troops. “Sir”, roared one of these generals, “I do not like what you write about.”

Russell’s reply is immortal and still applies. “Then sir,” he retorted, “I suggest that you do not do what I write about”.

Gordon Brown doesn’t quite put it as succinctly as Barack Obama. He doesn’t share the American leader’s rhetorical style. The passion may be less demonstrative, but it is there all the same when asked if he really thinks Labour can win the 2010 general election. Yes we can, is the message, and while it takes him more words than that to spell out the reasoning, there is no doubt he believes it.

It is the day after the screening of the Piers Morgan party political broadcast on behalf of the Gordon Brown party, family and soul. The day British troops launch the coalition forces’ Operation Moshtarak against the Taliban and the day at least 20 civilians become its first casualties.

Brown is heading back by train from a regional visit to Suffolk where he has been visiting a base where troops are in helicopter training,  before dispatch to Afghanistan and to a SureStart centre, one of those the Tories would close if they win the election.

As the City of London skyline appears, with the iconic Gherkin raising an insolent finger to the world on behalf of the banking community, Brown is anxious to talk about his new plan to take on the bankers, and save the world for a second time, although he doesn’t quite put it like that.

He is a late convert to the need for a “Robin Hood” tax, along the lines of the Tobin tax which would place a levy, or a series of levies ranging from 0.05 per cent to 0.005 percent on share trading, currency speculation, derivatives and other more exotic practices. Later in the week, Brown is to take the lead at an international conference of “progressive countries” in support of an attempt to implement the scheme globally.

“What this crisis has shown is that if you do not have global supervision, national regulation by itself is not enough. You’ve got to have global rules for the game, you’ve got to have overall global co-ordination. If you are in a global economy, a national supervisory regime cannot be enough so you’ve got to look at the rules under which financial institutions operate globally and one of those rules is that the banks, the financial institutions, make a proper contribution to society. Lots of banks have able to choose to avoid tax, to move to tax and regulatory havens and now that we are starting to close that down it is possible then to have a global financial levy which global financial institutions would pay as their contribution towards the risks that they potentially impose on society but also on the earnings that they have.

“We are proposing a global financial tax, a big reform of the global economic system. We have a plan for growth and jobs that would reduce unemployment in Europe and around the world. Britain is, as we led the way in restructuring the banking system in 2008, now leading the way with other countries in trying to forge a new international economic system. We have got to make sure that we deal with the problems that exist in the financial system and make sure that the relationship between the risks people place and the rewards they receive is properly aligned.”

According to the Governor of the Bank of England, the British economy is “not out of the woods” yet. Is Brown confident that Britain will not be back in recession before the next election?

“The important thing is not to wreck the recovery and that’s the big point of difference between us and the Conservatives on economic policy. They are so wedded to the old ideology that they would cut away the stimulus now and have cuts in 2010 and the evidence is that public investment has been absolutely crucial to taking the country out of recession and that if it was all withdrawn then there is a danger of this fragile international recovery being undermined. So my message is, don’t wreck the recovery and the one thing that could really wreck the recovery is Tory policies that would withdraw the support.”

But cuts would still come under a Labour government, just later. Why should the less well-off public service workers pay with job losses and salary cuts for the sins of those who created the mess and are still giving themselves huge bonuses?

“The Tories want to cut now. Every international advice is that we should maintain the fiscal stimulus until we are absolutely sure of recovery, but at some point we’ve got to implement a deficit reduction plan. We’ve set out plans to halve the deficit over the next four years. Much of that will be achieved by growth itself, some of it will be achieved by tax changes and some of it by public expenditure changes. I was not afraid to say, in 1997-98 as Chancellor, I had to restrain public expenditure. The 2006 expenditure review cut the budgets of seven departments. We will do what is necessary to make sure that the deficit is reduced by half over the next four years.

“I have tried with Alistair Darling over the last two years to ensure that we maintain public expenditure and public services and at the same time we have helped the economy by ensuring thousands of people given help to get back to work, hundreds of thousands of businesses being given help with cash flow and people being protected against the sort of mortgage repossessions we saw in the 1990s. So we, the Labour Government, made the decision to protect people against recession in a way that no other government has done in Britain and in a way that was quite different from the 1980s and 1990s. We accepted that it was right at that stage to raise the deficit but that once the recovery has happened it is right also to deal with the deficit. We will protect frontline services and I think we have already shown that schools and policing budgets will rise but the important thing to realise is that it is possible to make economies in other areas and it is possible while the whole economy keeps rising.”

The suggestion that Trident would be a more prudent expenditure cut gets short shrift. Britain is ready to cut its nuclear arsenal but only part of a multi-lateral agreement, achieving non-proliferation is more likely from a position of nuclear strength: “ Our aim is to reduce the number of weapons the nuclear states have while at the same time persuading non-nuclear states not to acquire nuclear weapons.”

On the day that David Cameron embraced the concept of co-operatives, what will the Government do to encourage more mutualisation, especially in the banking sector?

“I think the banking system needs more entrants and we do what we can to encourage people to enter it. We have a proposal to use the Post Office as a banking system and to ensure that people can save more effectively through the Post Office. We want to see the equivalent of a savings institution for individuals, what is effectively a bank for innovation, a new investment fund for innovation and better services in banking for small business and if we need to do that with the public sector more involved we will do that.”

What needs to be done before we can say mission completed in Afghanistan?

“We are in Afghanistan because we want to keep the streets of Britain safe. I know that some people doubt this connection, but I’ve got to remind people that three-quarters of the terrorist plots we’ve had to deal with on a major basis have started in Pakistan-Afghanistan and if the Taliban were to get control back in Afghanistan and if al Qaida were to have the freedom to roam across Afghanistan there would be a greater danger and that’s what most other countries think as well so it’s a 43-nation coalition.

“What we’ve got to do is to help the Afghans themselves run their own country free of the Taliban. Now, we know there is no popular support for the Taliban but we also know that we’ve got to strengthen the Afghan security forces and the Afghan civil institutions, including local government and therefore the issue for me is training up the Afghan forces, police, ensuring that there is local provincial district governors and that there is local government that is working. And once we’ve trained the Afghan forces then we can gradually bring down the number of British coalition forces.”

And the timeline?

“There is no timeline. What there is, is a proposal that we start handing over control district by district, province by province, starting in 2010 and what we also propose is that by 2011 Afghan forces will be at a total level of about 300,000, police and army and that will be far bigger than the coalition forces so gradually the other forces can be reduced.”

Aren’t the security services pulling the wool over the Government’s eyes over torture or did ministers know about MI5 complicity?

“I oppose torture and cannot condone any situation in which it is used. Where there have been questions asked we have rightly been asked for them to be investigated. We are about to publish new guidelines for the security services to make it absolutely clear what their responsibilities in this area are. But we should not ignore the fact that Britain has strong and effective security services which have served us with distinction over many years.”

What about closer oversight by the House of Commons?

“I have always thought that the Intelligence and Security Committee should have a stronger role in relation to the House of Commons and I did actually create, after I took up this job, new procedures for it to act. I think we can always consider going further. I’ve got to listen to what’s being said by them and by other people as well. I want to proceed on a consensual basis.”

It is “absolute nonsense”, he says, to suggest that there are any Cabinet rifts over the election strategy.

“You have got to go for the widest coalition possible, renewing the coalition that won us the 1997 and 2005 elections. Our strategy is core values not core votes. Core values are what we believe in, why we act, prosperity and justice for all. It is the Conservative Party that are betraying the middle classes, they are refusing to give people the support they need, they are going to take away the child trust fund from potentially millions of people, they are going to take away the child tax credit from more than a million middle-class families, they are refusing to support education to 18 which is the key to opportunity for millions of teenagers in this country and their families, they are refusing to support SureStart, other than for the “tragic” disadvantaged 20 per cent and are refusing to make them universal. In all these areas the Tories are hurting middle  Britain.

“We are going to build a fairer future for all the people of this country. The Tory theory has been proven to be wrong. They have been exposed as a party that is clinging on to the orthodoxies of the 1930s when it is clear that laissez-faire just leaves people behind.”

Why have you converted to the alternative vote now?

“I think the events of the last year, the MPs’ expenses, has changed a lot for me. I never knew that MPs were in this position. I think people were genuinely shocked by some of the revelations and I think we have got to prove that as a political system we are more accountable to the people of the country. And I think what we can do is give people the choice as to whether they want their MP to be elected with the majority of the votes of their constituents.”

How does the expenses scandal lead to AV?

“You’ve got to change more than the processes of drawing up expenses forms. You’ve got to show people that you are ready to listen more and to make Parliament more accountable. One way to make Parliament more accountable is, first of all, to give people more choice over the way the system works, so that’s why there is a referendum, and secondly, to put a proposal to ensure that every MP who is elected will not have 20 or 30 per cent of the votes cast as has been true in the past and will have more than 50 per cent.”

Brown delivers a short display of exasperation at the possibility of working with the Liberal Democrats on a policy-by-policy arrangement in a hung Parliament.

“Look, I’ve just got to tell you that we as a Labour Party are going all out for victory and we will fight every inch of the way to secure

as many seats as possible and to secure a majority, so we are not contemplating any other scenarios.”

And does he think he can do it?

“I’m not complacent. I believe we have made huge advances in the last few months in exposing the Conservative Party, but also in showing that Labour is the party of strong ideas about the future. It is the Labour Party that has been leading all the debates. The Tory Party are the first opposition party to have run out of ideas even before there is an election, even before they have written their manifesto.

“But I don’t want people to wake up six months from now and find their services have been cut under the Conservatives. I don’t want to see a Britain where all the advances we have made together over the last 12 years by investing in our public services have been swept away, that is the danger and I think people are starting to ask questions about the Conservative Party and starting to see through them.

“At then end of the day politics is about judgement and the Tory Party under [David Cameron’s] leadership wants to present itself as middle-of-the-road and centrist and pro-poor and pro-public services, but whenever the challenge is made about what they would do they reveal themselves as totally unreconstructed. So the problem the Tories have is that there is a huge difference between how they want to appear and what they actually believe. There is a difference between the brand which they portray and the beliefs which they hold. They are essentially an unreconstructed party and they are just posing as new. When people look into it in greater depth, they find it is the same old Tories.”

And if that leadership deal wasn’t done at Granita’s after all, where was it done?

“I’m not going to talk about that anymore.”

Not even in the book? “What book? I’ve absolutely no interest in that, I’m just getting on with the job.”

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Just a few weeks after inflicting a heavy defeat on the right-wing government, Greek socialists are now staring into a political and economic abyss. How has it come to this? Why is it now that Greece is shown to be bankrupt, with burgeoning deficits and clarion calls from international organisations for the country to make savage cuts in its public expenditure?

How did credit rating agencies in the United States, such as Moody’s, Fitch and Standard & Poor, gain the power to undermine sovereign governments simply by downgrading their ratings of those governments’ bonds? Why is anyone incapable of standing up to the credit rating agencies and challenging their hold over financial centres in New York, London and Tokyo?

And why are socialist governments the primary victims of the current negative speculation in international bond markets, which is accounting for vast sums in extra credit costs? This largesse should be used to alleviate the economic crisis in countries such as Greece.

One perverse consequence of the current situation is that those same credit rating agencies are themselves undergoing a crisis of confidence. There has been severe criticism of their failure to spot the private sector problems that led to the global financial meltdown. And they are suffering from falling revenues and rising compliance costs. Yet these arbiters of international money markets are brazenly undermining the public finances of a number of countries and risking a double-dip recession in Europe.

Over the past 20 years, the credit rating agencies have had an incestuous relationship with many dubious individuals and companies and employed dubious methods to maximise revenue. For example, Moody’s has been caught out negatively rating a German reinsurance firm simply because that company didn’t see why it should pay Moody’s seven-figure fees when it was already paying two other credit rating agencies for the same service.

These credit ratings agencies continued to give sub-prime mortgage aggregation vehicles a triple-A rating even as the US property market collapsed in 2007. The demise of multi-billion dollar businesses Enron and WorldCom took place completely under their radar. At one point, they even rated Japan as a bigger risk than Botswana.

Is it just a coincidence that Spain and Portugal are the latest targets of the ratings agencies and currency speculators, as the economies and public expenditure levels of those countries are under attack in the international currency markets?

The common threads that link Greece, Spain and Portugal are that they are members of the eurozone and run by socialist parties which defeated the centre-right in general elections.  While the centre-right has won power in France, Germany, Italy, Poland, Sweden and most of the EU’s new member states, in Spain, Portugal and Greece (and Britain, some might add), socialist administrations have bucked the trend. Is that why these countries are in the speculators’ sights?

Meanwhile, the centre-right government in Ireland escapes their criticism, despite having the worst public finances in the eurozone. Under its centre-right coalition government, Italy has a public sector debt at a level of

114 per cent of  gross domestic product. Greece’s equivalent debt is 112 per cent, Spain’ s is 56 per cent and Portugal’s  77 per cent. America’s s budget deficit for 2010 is 11.2 per cent of GDP. So why are centre-left-led governments suffering so much more at the hands of international capital?

As far as Greece is concerned, the blame lies with the centre-right government which was responsible for deceiving international supervision. While there has long been suspicion of the methodologies utilised by Greek economic statisticians, the national statistics produced under Greece’s conservatives were as genuine as a British MP’s expenses claim.

A budget deficit of 12.7 per cent of GDP is clearly unsustainable – as are state pensions at a level of 96 per cent of pre-retirement earnings, especially with an ageing population. So there has to be a day of reckoning in Greece and it appears that the public sector will pay a heavy price. Not all of this is undeserved. The Greek public sector has become bloated, with most appointments and promotions dependent on affiliations to whichever party happens to be in power. Further, there is a long history of tax evasion in Greece.

However, freezing the wages of public servants is not the answer. For a recovery programme to work, the state needs starts to maximise its revenues after years of tax dodging. It is perverse for to hold down the pay of those who are crucial to the recovery – the tax collectors.

For many years, Greece has endured the adverse consequences of dynastic politics. The Papandreou family has controlled the leadership of the centre-left through the Pasok party. The right-wing New Democracy movement has been the plaything of the Karamanlis family. All this has to change.

However, the unlikely saviour of socialist principles in Greece may be the country’s membership of the euro. This is also shoring up the defences of Spain and Portugal in the face of avaricious currency speculators. Ultimately, the European Union and the European Central Bank will not let eurozone members be picked off one by one.

German insistence on a no-bailout clause for all eurozone members means there will be no direct transfer of direct funds between, say, Germany or France and Greece. However, its membership of the EU means that Greece should get the financial support it needs to ensure its economy does not implode completely.

Greece will have to swallow a bitter pill and undertake a fundamental and long-overdue reform of its public sector. But its membership of the EU should shield it from the worst consequences of the seedy activities of financial carpetbaggers in the dark recesses of the global financial marketplace.

It may be that, because of its shortcomings, Greece should not have been allowed to join the eurozone in the first place. But now the eurozone can protect the country from the worst excesses of the free-market ideologues who would have prevailed if Greece still had the drachma and was forced to go cap in hand to the International Monetary Fund.

It is an unavoidable conclusion that the role of credit rating agencies in assessing national debt should be the subject of investigation by the EU and the US Securities Exchange Commission. There is a great deal of evidence that they are abusing their positions and are motivated only by their own bottom line at the expense of public welfare.

Although there is overwhelming media backing for David Cameron, one thing is clear: the Tories are not seen as a convincing alternative to Labour. The next general election is still Labour’s to win.

Despite the backdrop of a serious economic downturn, the Tories have continued to poll at levels below those reached by John Major. Major achieved 41.9 per cent in the 1992 general election, while the average of all the polls taken in 2009 put Cameron on 40.6 per cent. So far this year, it has appeared that the Tories’ support is falling even below these levels.

The Tories know they are vulnerable – hence their nods and winks to the Liberal Democrats about the potential of a coalition government and their reported secret meetings with the Unionist parties in Northern Ireland. As the ComRes pollster recently explained: “David Cameron has failed to seal the deal with the voters, who think the Tories are not an appealing alternative to Labour and would represent the interests of the better off if they win power”. The same poll stated that amongst the social groups that make up around three quarters of the population – the so called C1s, C2s and DEs – more people see the Tories as unappealing than appealing.

So how should Labour take advantage of this to win the election? We have heard much from certain senior members of the Government about not resorting to a “core vote” election strategy which would destroy Labour’s chances by turning our back on the rest of British voters. Yet this is a false caricature of what progressives in the party have been arguing. What we need are policies that mobilise the pool of millions of voters who still identify with Labour.

It is a great advantage to Labour that it still has an overall lead over the Tories when pollsters ask with which party people most closely identify. There are more Labour identifiers than Tory among social groups C1, C2 and DE.

Labour’s problem is that we are not convincing those who already identify with our party and our fundamental values that they should get out and vote. Policies are needed that can mobilise these Labour identifiers – the bedrock on which Labour won the 1997 election. Rebuilding this coalition must be Labour’s priority if it is to stop the Tories.

Given that this coalition has been eroded by the policies most closely identified with the Blairite agenda, including the Iraq war and the extension of the market into public services, the starting point must be to revert from the policy direction that saw Labour lose more than four million votes between the 1997 and 2005 general elections.

Yet some in the party still cling on to the idea of “triangulation” – that we must meet the Conservatives half way or we will lose the mythical “aspirational” swing voter to the Tories. The pressure from ultra-Blairites to give greater emphasis to how Labour would engage in cuts is a central example.

The evidence suggests otherwise. A ComRes poll in late January showed that of those people likely to vote and who generally identify with Labour, only 7 per cent are considering voting Tory, UK Independence Party or for the British National Party BNP; 9 per cent Lib Dem or Green, while 9 per cent are yet to make up their minds. There is no electoral gain to be had by Labour bending to a right-wing led agenda.

This is nothing new. As the “Labour’s Lost Millions” analysis undertaken by Hemsworth Labour MP Jon Trickett following the 2005 election demonstrated, a wide range of social groups across Labour’s coalition of supporters had decided not to vote Labour even though they continued to regard themselves as Labour identifiers. These lost voters did not move to parties on the right. As leading pollster Peter Kellner explained in analysing the 2005 election: “Labour had angered many of the people who still thought themselves as supporters of the party”.

The same phenomenon continues to this day. It is simply wrong to argue that, unless Labour tacks to the right, we will see mass defections of Labour voters. Millions of voters who see themselves as Labour need to be given a reason to vote for the party.

With the economy set to dominate politics in the run-up to the election, Labour needs to take advantage of the Tories’ failure to convince in this area. As The Times reported earlier this month: “The most worrying finding for the Tories is that David Cameron is seen to be on the side of the rich over ordinary people, by 50 per cent to 42 per cent. By contrast, Gordon Brown is seen as 64 per cent for ordinary people and 26 per cent for the rich.” Other polls have revealed a similar trend.

In contrast, the more progressive measures announced by the Labour in the Pre-Budget Report were backed by large majorities, with two-thirds supporting the statement: “The Government’s plans for heavier taxes on people with high incomes are fair” and eight in ten Labour identifiers backing it.

This is no surprise, given half of full-time workers earn £23,200 or less and 90 per cent earn less than £46,000. There is no basis for the claim that claim Labour would be unable to build a winning electoral coalition if it was to adopt more progressive economic measures for those in the top 1 per cent lucky enough to earn more than £100,000 a year.

On the contrary, Peter Mandelson’s recent call for the 50p tax rate on high earners to have a short shelf life and Labour’s simultaneously ceding ground to the right’s argument that cuts are necessary in the next parliament give the impression that Labour is primarily concerned with the interests of a tiny minority of wealthy people.

Last week’s Tribune addressed how Labour’s increasing ceding to the Tory cuts agenda is economically illiterate. Its political unpopularity is also clear. Despite the clamour for cuts to public services from all the main parties, the public are still not persuaded. That is why the Tories are backtracking on how they present their cuts agenda. Left out of most coverage of the recent Social Attitudes Survey was that 50 per cent believe spending and taxation levels should stay as they are, support increased taxes and spending on health and education, but the proportion willing to say that taxes and spending on health and education should be cut is just 8 per cent.

Labour can win back millions of voters and win the next election by openly breaking with the Blairite neo-liberal agenda that has dominated the party in the past decade and by defending the economic interests of the vast majority of working people – both middle class and working class. Highlighting the right-wing agenda proposed by the Tories and offering a radically different policy alternative is the way to winning the next election.

Colin Burgon is Labour MP for Elmet

This article was published in Tribune under the headline “We can win back Labour’s lost voters”

The opposition parties have been attempting to outdo one another in their fervour for “savage cuts” in public spending. Nobel Prize winner Paul Krugman is right to state that such policies will make the recession worse. They are also deeply unpopular electorally. Yet this thinking now appears to be part of a growing consensus that includes the Labour frontbench.

The economic debate in Britain has become dominated by the budget deficit – that is, the gap between government revenues and expenditure. This is a grave mistake. The deficit is a symptom of the current economic crisis, not its cause. To reverse the widening of the deficit, policy should be aimed at reviving economic activity. Only an increase in activity – and the taxes that come with it – can revive the economy and restore government finances.

The recession just ending is the sharpest one in Britain in the post-Second World War period. Even now, many commentators continue to fret over the possibility of a “double-dip” recession – a return to economic contraction after a brief interlude of growth. This is a genuine concern as the effects of lower interest rates wear away and stimulus measures are withdrawn. Worse, the emerging political consensus in favour of spending cuts, which is almost unique to this country, is certain to depress activity once more.

The driving force of the recession has been the slump in investment (gross fixed capital formation). Investment has fallen at a rate more than three times as fast as the aggregate decline in gross domestic product. Actual GDP peaked at £1,343 billion (annualised) in the first quarter of 2008 and has fallen by £81 billion since. Investment peaked one quarter earlier, at the end of 2007, and has since fallen by £47 billion. In addition, business inventories have fallen by a cumulative £13 billion over the course of the recession. Taken together, the decline in investment and in inventories amounts to £60 billion – or three-quarters of the entire decline in GDP.

Of course, other areas have been hit hard, notably household spending – down by

£31 billion. But the decline in this category is 3.7 per cent and is dwarfed by the 19.1 per cent decline in investment. At the same time, government spending has also slightly offset the ferocity of the recession. However, the real increase in expenditure has been minimal, at £6 billion, compared to the £81 billion fall in aggregate output.

Investment forms the basis of all future prosperity. The recession is an investment-led slump in activity. Therefore, both Britain’s immediate and medium-term economic outlook depend on a revival of investment.

The yawning gap in the budget deficit is caused by the severity of the downturn and is overwhelmingly related to the decline in taxation revenues. Since 1997, taxation revenues have grown at an average annual rate of over 5.6 per cent a year. Without a recession, on this trend, tax revenues would be £612 billion in the current financial year, compared to a projection from the Treasury of £498 billion. The difference between the trend level and the Treasury projection for this year amounts to £114 billion. This represents the overwhelming bulk of the Treasury’s projection for the entire budget deficit of £128 billion.

In the clamour to cut public sector spending – including jobs and pay, as well as services – this key fact has been overlooked. The rise in the deficit is almost entirely due to the slump in taxation receipts, not some allegedly reckless increase in government spending.

It is clear that a sharp increase in government investment could tackle the twin problems of the recession and the deterioration in government finances.

In fact, public investment is set to be 3.5 per cent of GDP in the current financial year, a cumulative rise equivalent to 1.8 per cent of GDP since the recession began. This modest level is actually the highest level under this Government. But it is a wholly inadequate response, as it is less than half of the decline in private investment. It is also planned to fall back to 2.7 per cent next year and back below 2 per cent in subsequent years.

Thatcherism saw a decline in the growth of government investment to 1 per cent. The increase under this Labour Government has been 1.5 per cent – barely above the rate of depreciation. Yet, from 1963 onwardsuntil Thatcherism, growth in government investment averaged 5.25 per cent per annum. A return to something like those levels is currently required.

Businesses do not have a magic wand. When they invest, it is to achieve a higher return than the capital deployed and usually much higher than the initial capital outlay. Government can do the same. In the jargon, these are called the “fiscal multipliers”. According to the Treasury model, government spending is the most effective of these – nearly three times as powerful as cutting VAT, which was itself a useful initiative. The Treasury analysis shows the effect of the multipliers rising in the second and third years, so that a £1 billion rise in government spending raises total economic activity by £1.4 billion in each of those years.

The impact of the stimulus can often persist over a great many years. In addition, these Treasury estimates are only averages derived from long-term experience. Most research is agreed that the effectiveness increases when any of the following conditions apply: when there is large unused capacity in the economy, when interest rates are low and when access to credit is hampered. All these conditions currently apply, so the effectiveness of any stimulus measures currently would be significantly increased.

All this increased activity provides increased taxation revenues. Again, the Treasury has estimates of how much. Over two years, every 1 per cent increase in GDP will lead to an improvement in both the level of public sector borrowing and the budget deficit of just under 0.75 per cent of GDP. To take the year two effect alone, government spending equal to £1 billion produces an increase in activity of £1.4 billion, which in turn produces a reduction in the budget deficit of £1.05 billion (1.4 multiplied by 0.75). It should be stressed these are only averages. In current crisis conditions, the returns are significantly higher.

Investment not only revives economic activity, by doing so it reduces the cause of the deficit, the slump in taxation revenues. Reflationary policies have been adopted by countries all across the world. According to the International Monetary Fund, Britain is the only G20 economy that has not announced discretionary stimulus measures for 2010.

A crucial fact is that these multipliers also work in reverse. That is, spending cuts depress economic activity even further and so push taxation receipts down. This was the experience of the 1930s, where a policy of public spending cuts was a contributory factor in the Great Depression. This is why Paul Krugman says David Cameron’s policies are “just wrong”. They are wrong and their adoption by Labour does not make them any less damaging.

The alternative is investment, which will revive economic activity, get people back to work and produce a sharp improvement in government finances.

Michael Burke is a former senior international economist with Citibank

But, as Tribune has said before, the Labour Party will never be the same again after this election, win, draw or lose. Exactly the same point is made by Neal Lawson of Compass on page 11. His organisation goes further in its apocalyptic forecast of Labour’s fate beyond an election defeat. In its provocatively titled paper The last Labour Government, Compass points to three possible developments that could wipe out Labour’s chances of ever forming a government for good: the Tory pledge to cut the number of House of Commons seats by 10 per cent, with Labour taking the heaviest hit; the possibility of Scotland embracing independence and taking the 41 seats currently held by Labour with it; and the Tory threat to reform party funding in a way that will break the link between Labour and the unions.

But there is greater reason than survivalist pragmatism to consider the need for a debate. As TUC general secretary Brendan Barber says: “Whatever the strengths of our present system, it encourages the major parties to concentrate their effort in marginal seats, and on the floating voters within them who are most likely to switch their votes. Safe seats and core voters end up getting taken for granted.”

The late Robin Cook would have been squarely on the side of reform. Reflecting on the result of the 2005 election, he wondered how Labour members would feel if the Tory Party had been elected with 35 per cent of the vote and a majority of 66 in the Commons. He was concerned too that the first-past-the-post system “dangerously” split the progressive vote.

Arguments about fairness and a cold pragmatism about which system best suits your favoured party have always been the two wings of the debate on our voting system. The first is not always driven by altruism alone; it is necessary to look closely at the motives of those advocating proportional representation and what they hope to gain from it, in some cases the weakening of Labour’s chances to form a strong government. Tribune has always favoured the pragmatic line in support of a system which is capable of delivering that strong Labour government. If the nature of politics has changed so fundamentally – not simply because of the prospect of electoral defeat – then this is a debate whose time has come.

While the nation craves this creaking saga to be over, it is fanciful that Gordon Brown’s character would allow him to go to the country earlier and politically risible to imagine that he might, as still constitutionally he could, a month later. So, fewer than 100 days for Mr Brown and his Government to come up with some ideas to convince more than the die-hard core vote, which simply does not want a Conservative government, he and it deserve a fourth term in power that.

There are many, very many in the Parliamentary Labour Party and in the Cabinet, who emphasise the distinction between Mr Brown and the Government in this respect and it is the difference between the Government’s prospects and the Government’s prospects with Mr Brown at the head of it which informed not just the actions of those behind the coup fiasco – Patricia Hewitt and Geoff Hoon are now universally dubbed as the “Dumb and Dumber” of Westminster, the net result of their actions to damage the party and reinforce Mr Brown  – but the mood of  probably a majority of the PLP. The subsequent meeting of Labour MPs was inevitably a rally, albeit a fatalistic one: a victory cheer for the Light Brigade before they faced the Russian guns. At least they were taken by tactical surprise in their massacre. This lot wouldn’t be.

The appearance by Alastair Campbell before the Chilcot inquiry will have done nothing to lift the nihilistic gloom, revealing nothing much new in substance but reinforcing and reminding in chilling chutzpah that Tony Blair lied to Parliament and the country. There were no weapons of mass destruction, the reasoning deployed to sucker the support of Parliament for the military invasion of Iraq. Both Mr Blair and Mr Campbell knew that, both are responsible for the avoidable deaths of tens of thousands and the stench which hangs over the Government still. For good measure, Mr Campbell went out of his way to emphasise Mr Brown’s role in being close to Mr Blair throughout.

Flash forward and David Cameron is showing serious signs of weakness and bad judgement under pressure and there is still time for some courageous policy initiatives. First, Mr Brown should reverse the concessions he gave to the cuts crusaders on that meltdown Wednesday and show that the election is not going to be a fight between who can cut deepest.

If cuts are required, first in line should be Trident. The public sector should be defended not threatened. Something, the more punitive the better, should be done about the banks and their executives who are in the process of stealing billions of taxpayers’ money for bonuses that defy the broad democratic will but which the Government appears ready to stand by and let happen.

Only boldness can save the Government in its last 100 days.

This goes beyond electoral or economic tactics and cuts into the heart of Labour’s strategic political purpose. According to Gordon Brown’s new year rallying call, Labour is here to “make the most of the unique abilities of every child and use the power of government to support all those who aspire to the best for their families”. Labour’s aspiration has always been the “greater good of the commonweal”. As Mr Brown’s words implicitly state, this has always been seen as the harnessing of the state by a single party in power to its policies and principles in defence of fairness, equality and the distribution of wealth – no matter that implementation has too often fallen short of promise.

In a speech trailed as concessionary to the will of Mr Brown, who faced calls for a ballot over his leadership as Tribune went to press, Lord Mandelson warned that in future the centre left “cannot and must not confine itself to the politics of distribution”. To what else, then? After Mr Balls defended in Tribune the differences between the Tories and Labour policy on tax and spend as outlined in the pre Budget Report, Lord Mandelson let it be know that he despaired the party was heading for an election strategy that appealed to its “core” vote. Wouldn’t that be about time?

No, says a new alliance of modernisers, because that would abandon the “new” Labour coalition and the party cannot win only with “old” Labour votes. This ignores the fact that the coalition is already broken. Amid speculation – and senior-level behind-the-scenes, cross-party discussions – on the consequences of a hung parliament there are strong, emergent forces within Labour which, in pursuit of that illusive grail, the progressive realignment of politics, are advocating closer ties with Liberal Democrats under the guise of greater “pluralism”, the new political zeitgeist. This is not tactical electioneering of the Commons deal variety but a growing movement that would leave both “old” and “new” Labour behind for something new.

As the election approaches, it is right that the primary focus should be on the damage a Tory victory would inflict on the country and its people. But there needs to be more debate within the Labour Party on what it is to become. The poor should not be abandoned by default.