George Osborne is the Tories’ spinner-in-chief. He has one purpose: trashing Labour’s economic record. In the knowledge that Labour was trusted by the electorate on the economy and public services in three successive elections, they know they still have to attack that record. In areas like mine in Merseyside, the belief that the Tories would damage job prospects and send us back to the eighties was enough to deny Cameron a parliamentary majority.

So it came as no surprise to me on Monday when I listened to George Osborne answering an urgent question on benefits cuts. During recess last week, the chancellor briefed the BBC that he’s going to take £4bn out of the benefits bill. Naturally, my constituents (and I imagine many others) reacted with concern and fear, especially those with a disability who appear to be Osborne’s likely target. One of the Lib Dems still pretending to be in opposition, Bob Russell, asked the chancellor to come to the House to explain.

George Osborne was determined to evade the question asked. By way of preamble we were treated to a discussion of the economic context. The self-justification was frustrating, full of myths to direct blame in Labour’s direction. Whilst no government is perfect, Labour’s record on the economy is being publically discredited with shameless manipulation of the facts. When the Tories make accusations about the way we ran the economy they do so because they know it has real electoral impact.

That’s why it’s our job to keep speaking to the public on this. We need to listen very carefully to the impact that Osborne’s economic instability is having now. We must be clear about how the deficit arose, and what will work to reduce it and grow the economy. We cannot leave this to chance. Labour campaigners need to become economic commentators. So, from yesterday’s talk from the Tatton Terror, here are my top three myths, and how I think we can respond:

1. ‘The previous government left Britain with the largest budget deficit of any major economy and no credible plan to deal with it.’ (Hansard Mon 13 Sept, col 599)

On the question of the size of the budget deficit, the first issue to clarify is what the deficit is and what it is not. It is the gap between what the government has coming in and what is has going out. The deficit exists because of increased benefits being paid to those without a job, and less taxes coming in. It is a consequence of the crash, to which the UK was highly exposed because of the dominance of the finance sector in our economy.
It is not a consequence of reckless spending. If it was, it would have crept up over the time Labour was in power. But it didn’t. From 1997 to 2001, the budget was in surplus. From 2001 to the crash, it ranged between 2.3 to 3.3 per cent. The leap upwards was caused by the recession, which happened because of failures in the global banking system.

For Labour’s credible plan to deal with it, see our March budget – now wiped from the Treasury website as though it never happened.

We can explain the reason for the current deficit to the public – we just need the facts at hand.

2. ‘That was a major cause of instability and uncertainty that threatened any prospect of economic recovery.’

On instability, there’s this straightforward analysis from Rachel Reeves back in June here. As she says, ‘from the point of view of the sustainability of our fiscal position, a nation’s solvency critically depends on the amount of its outstanding debts; this is common sense. And as a percentage of GDP, national debt in the UK in 2009 was 72%…there is no getting away from the fact that the UK is a long way off being close to Greece in terms of its national debt.’

It suits the Tories and the Lib Dems to say that they had no alternative. They will trot out the standard ‘the country maxed out its credit card’ line, and hope that the public believe it as they see public service deteriorate.
But government doesn’t work like that. It must carefully invest in the right things to improve the chances of growth. For a government, borrowing to make the right changes, like better transport, or to support burgeoning high-tech manufacturing business is a sensible choice. I suspect most people in Britain know this. In my constituency, where we have science-led industry and now benefit from a swift, convenient train link to London, I think this is why many chose to stick with Labour in May.

3. ‘The [coalition’s emergency June budget] has restored stability to the British economy and provided a sound basis for a sustainable recovery.’

On the current business environment, this is the strangest claim of all. My constituency is only 30 miles from George Osborne’s. So I would guess that he has similar conversations to me with businesses. They face uncertainty over government contracts, low consumer confidence, and difficulty getting credit from banks. There is more appetite than ever for new technology, but disappointment that the government removed investment tax-breaks to provide a straight corporation tax cut which helps especially big business making the most profits. We cannot allow the Tories to say they have improved circumstances for industry or small businesses.

And as George Osborne’s counter-productive cuts kick in, we’re likely to see more people out of work and claiming benefits.

Which is ironic, as this is how the deficit came about in the first place.