Gordon Brown's use of the "c-word" this week was designed to clear the air over spending - but Labour's problems as it approaches the next election go deeper. Here's today's Journal column.
Over the course of the last three general elections, British politics has followed a fairly familiar pattern, with the question of who can best be trusted to run our key public services the main point at issue in each contest.
For almost all of that time, a Labour Party which promised more national resources for services such as education and health after 18 years of Tory tax-cutting and spending restraint has had things by and large all its own way.
By contrast, the Tories found themselves on the wrong side of the political tide – instinctive tax-cutters and reluctant spenders who were simply not trusted to carry out the investment in schools and hospitals which, by then, the public wanted to see.
When the history of the Blair-Brown years comes to be written, this underlying political consensus for greater public spending will be seen as the key factor underpinning Labour’s long political hegemony.
Of course, there were other reasons for Labour’s three successive victories. In 1997, the country was so heartily sick of John Major’s sleaze-ridden Tories that Labour would probably have won irrespective of its spending pledges.
The Tories then compounded their problems in both 2001 and 2005 by going into the election with the wrong leaders in William Hague and Michael Howard, when Ken Clarke would have been a much more voter-friendly choice on both occasions.
And of course, throughout this time they were up against an acknowledged master in Tony Blair who, whatever his shortcomings as a national leader, will go down in history as an election-winner par excellence.
But notwithstanding this, the essential dividing line in British politics between 1997 and 2009 remained one of Labour investment versus Tory “cuts” – although in reality that sometimes just meant the Tories were planning to spend slightly less than Labour.
For Gordon Brown, who as Chancellor oversaw the huge public spending programme, the lesson was clear. The way to win elections was to simply to highlight what local services the Tories would “cut” from Labour’s own programmes.
And who knows, it could have worked for him again, could have secured for Labour that elusive fourth term, were it not for the fact that the whole strategy was blown sky-high by the recession.
The extent of the problem really started to become clear in this year’s Budget which revealed the scale of the debt mountain facing the country in the wake of the government’s reflation measures.
Henceforth, there would be no “investment” as we have come to understand the term. There would, and could only be cuts.
This presented Mr Brown with an obvious difficulty. The Prime Minister is not known for his political agility and once he decides on a certain strategy, his usual approach, like Churchill’s, is to “keep buggering on.”
And so he did, through numerous Prime Minister’s Question Times this summer when the “Labour investment versus Tory cuts” mantra was faithfully trotted out to an increasingly weary public.
It was, unsurprisingly, Peter Mandelson who first cottoned-on to the fact that it just wasn’t working any more, and as I wrote a few weeks back, it was Mandy who began to lay the ground for a different approach, in his Newsnight interview last month.
“I fully accept that in the medium term the fiscal adjustment that we are going to have to make….will be substantial. There will be things that have to be postponed and put off, and there will probably be things that we cannot do at all,” he said at the time.
The upshot of all this repositioning was this week’s speech to the TUC Conference by Mr Brown in which he finally conceded, for the first time, that Labour too will oversee spending cuts if, against all odds, the party still manages to win next year.
To give Gordon his due, he didn’t just whisper the dreaded c-word. In fact he used it four times for good measure.
“We will cut costs, cut inefficiencies, cut unnecessary programmes, and cut lower priority budgets,” he told the conference.
Labour’s spinners say the speech was designed to “clear the air and enable Labour’s message to be heard again.” Whether or not it will achieve that end remains very much an open question.
As it is, the dividing lines between the two main parties, at least on the issue of public spending, now seem very blurred.
The argument between Mr Brown and Tory leader David Cameron would appear to revolve around the question of whether the cuts should happen now, as the Tories are advocating , or later, so as not to damage the recovery as Labour is arguing.
But of course, by the time the election actually comes round next spring, this distinction will have all but disappeared, and we will be in a scenario where cutbacks will swiftly follow whoever wins.
Lord Mandelson, with his customary indefatigability, is trying to draw a distinction between a Labour Party that will cut spending reluctantly and a Tory Party that will do it with relish, but it is doubtful how much traction this has with the public.
The real difficulty for Messrs Brown and Mandelson is that the next election is looking increasingly likely to be fought on what is natural Tory territory.
Thanks to the downturn, the consensus in favour of increased investment in public services which has been the foundation of Labour’s success over the past decade has finally started to shift.
What the public now wants and expects is, first and foremost, a government that will get the public finances in some sort of order, even if it means cutting spending programmes.
And if the prevailing public view is that spending has to be reduced, the hard truth for Labour is that the Tories are, by temperament and history, the party best-placed to do it.