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Labour must admit blame if it is to regain public trust

If I hadn't remembered that the Feast of the Conversion of St Paul the Apostle falls on Burns Night, I might have thought that the leadership of the Labour Party were celebrating it just now.

It is, however, simply that the Labour conference is beginning in Manchester, and both Johann Lamont and Ed Miliband have prepared the ground for it by disowning the party's previous record and normal priorities. Neither of them would put it quite like that, of course, but the Damascene nature of their apparent discovery that there is no money to fling about is an essential component in the task of presenting Labour as an electable government, both north and south of the Border.

Convincing anyone to vote Labour ought to be a difficult enough job at the best of times, given the party's 100% record in leaving the country worse off at the end of each of its terms in office than it was at their starts. But when we are in a slump which has now been going on for longer than the Second World War, which shows no sign of improvement in the near future, and which was by the most charitable view considerably compounded, and by the more rational one mostly created, by the last Labour leader, the problem becomes thornier.

Spending public money (ie taxpayers' money, or borrowed money that the taxpayer will need to repay) is the entire raison d'etre of the Labour Party, but since a man with half an eye can see that – as Labour's last Chief Secretary to the Treasury, Liam Byrne, so amusingly put it – there isn't any money left, Mr Miliband and Ms Lamont have to resort to desperate tactics.

These may even, breaking new ground for the Labour leadership, involve telling the truth. It would be too much to expect the speeches from Ed Balls and Mr Miliband to the party faithful this week to include the exact phrase "Gordon Brown – j'accuse!" or for them to dwell on his incompetence (particularly given their complicity in driving the economy into the ground), but I expect that acknowledgement of the last Government's failures will be as much a theme as criticism of the current one.

To put it bluntly, it will have to be, in order to persuade the electorate to return the party to office only five years after being kicked out. For while Labour is ahead in the national polls, it is by only five to 10 points, according to which of the weekend's polls you believe, while Mr Miliband's personal rating is, not to put too fine a point on it, atrocious.

He couldn't even get elected by his own party, instead relying on the trade unions' block vote. That may be why the Labour leader has now engineered a row with Len McClusky, who heads the public sector union Unite, saying that he was wrong to oppose pay restraint. This has the virtue of being indisputably true, as well as being the view of the majority of the public and – judging by their turnout in ballots – most of Mr McClusky's members. What's more, Mr Miliband didn't even use the phrase about it being "time to put aside the rhetoric" which made his last interview about union strikes look like a scratched DVD, or a trailer for the time-travel thriller Looper.

Ms Lamont, similarly, has come in for stick for saying something equally bleeding obvious, which is that public services need to be paid for, and the SNP Government will, sooner or later, have to accept that free university tuition, care for the elderly, prescription charges, concessionary travel for pensioners and all the rest of it have a cost.

We may well be sceptical of this newly-discovered candour, particularly when Mr Miliband and Mr Balls were so thoroughly involved in devising the criminally inept financial policy of the last Government. But if it acknowledges the reality of the current economic situation and can face down the public sector unions and other vested interests which provide so much of its funding, there may be some hope for Labour.

Its real advantage lies not in any useful policy of its own, of course, since those still involve flinging public money about and, as I say, it seems gradually to be dawning on the Labour leadership that there isn't any to fling. But Labour's best policy, in fact, would be to draw attention to that fact, since it is the greatest weakness of their opposition, both in Holyrood and Westminster.

The Coalition Government has increased the deficit to its highest level in history and increased both core spending and debt (despite the rhetoric on austerity and cuts, public spending is actually up – to £688 billion, some £67bn more than Mr Brown's last year in office). Meanwhile, the Nationalists have focused on the coming referendum as an excuse to ignore the costs of services which, however desirable they may be, are, as Ms Lamont points out and John Swinney must know, unsustainable within current taxation.

One of the most credible attacks which can be made against the SNP's current policies and indeed the case for independence itself, is that the Holyrood government has never exercised its power to vary the rate of income tax. Many of us think that, as public spending priorities go, care for the elderly and education are perfectly sensible priorities. But if we would like a Scandinavian-style level of public provision of such services, it must be recognised that they are paid for by Scandinavian levels of taxation (in Norway, up to 47%, Sweden 57% and Denmark 62%).

And Mr Miliband would be performing a service if he drew the public's attention to the fact that the Coalition is actually spending and borrowing more money than Alistair Darling had planned to. The intrinsic dishonesty of the governments at both Westminster and Holyrood provides Labour with a better electoral footing than it has any right to expect, given its own dire record in office.

But it will yield results only if the voters can be persuaded that the party understands how much of the mess we are in was their fault in the first place.

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