Why Labour had good reason to feel cheerful:

Sometimes I fear we are not as surefooted as we should be. The events of the last week should us Labour supporters a bit chipper. It should make us realise that we can put the election defeats of 2010 and 2015 behind us. It should embolden us to reapply out thinking to the structural problems of the UK economy that remain unresolved – particularly social care, housing and the place of our young people in modern British society but also productivity….the bete noir of UK ever since the end of the Second World War.

The good news for Labour is that the government’s adoption of its fiscal and some prominent economic policies if properly talked-up by the party  will finally put to bed the notion that the program it offered last May was in any way undeliverable; irresponsible; or unrealistic. Quite to the contrary – we are all gradualists now and all in favour of businesses not using the Welfare system to maintain low wages – which is of itself one of the major causes of low UK productivity.

Mr Osborne has finally admitted in this first Conservative budget since 1997 that it is prudent and possible to spend £82 billion more over this whole Parliament; that it is possible to raise the minimum wage; that it is possible to increase taxes slightly; that reductions in public spending can be made over a longer timescale. Thus in principle what Labour offered in May was broadly right. Even if the government is now making poor choices it is still using the flexibility we identified. We are on longer therefore a party of economic incompetents and Labours spokesmen should welcome the Conservatives on to their centre ground.

Labour can now concentrate the debate on means and ends as the Conservatives have practically conceded the fiscal realities. How should government use that flexibility correctly identified by Labour in the public finances to the best ends for the good of the whole nation is what we should debate with the government. We, for example should not cut Tax Credits for many on low incomes to cut fund a cut in Inheritance Tax for those with homes worth 1 million pounds. Similarly, the argument Labour made on Energy turns out to be have been correct and the market  not only needs better regulation; the public get back what it is owed them.

Thus, we can finally put behind us the controversies of the past and put the leadership campaign in the focus of the future. We no longer need to feel the political debate  must be all about the closing years of the last Labour government. Instead Labour must concentrate on the problems like housing and engagement of our young adults in the economy and the polity – for they’re our future. We can also give Ed a standing ovation – because it turns out the argument was good even if we lost. Equally, we have to be truthful with ourselves, Ed wasn’t the best persuader we could have chosen to make the case and that the case was never made on the economy and the causes of the financial crash was our fault and not that of the electorate.

We now need a leadership that is fleet of foot and persuasive in debate –  and one that sounds – fresh – we have the issues – fairness – housing – social care and health care – and the reengagement of our future hope – our young people who are now being cut out of the security of the modern state by deliberate act of Conservative government policy.

We can now have a leadership campaign confident of the soundness of our judgements over the past decade.

Thank you Mr Osborne – in your eagerness to get into No 10 – you’ve made our most difficult political argument for us – we do have the resources available to make different choices and to bring about genuine change for the better for the many rather than for the advantage of the few.