It has been a catastrophic political blunder not to challenge the myth that Brown’s government caused the crisis and the austerity that followed. The choice, correctly framed by the economist Simon Wren-Lewis, is whether to pretend Osborne’s version of events is true and own up to perceived past mistakes or to contest it.
Pleading guilty seems the easier line to take, but it isn’t. The confession would be brandished by the government for the next five years as proof that Labour should never again be trusted with the public finances.
Instead, Labour needs to start its fightback by rehabilitating the record of the Blair-Brown years, making the point that the purpose of the pre-crisis borrowing was to modernise and improve the NHS and shabby schools. It also needs to challenge the idea that all borrowing at all times is bad. If that were the case, individuals would have to save up the entire asking price for a house rather than buying it on a mortgage and there would be no startup capital to launch businesses.