By committing to the largest fiscal retrenchment in living memory the coalition has gone for broke. The prime minister says it will “change our way of life”. That's the problem. Ken Clarke used to say that good economics is good politics. The government has turned this on its head. Framing the debate as a choice between the public and private sectors is certainly good politics, but it is bad economics. The Budget will force 600,000 public sector workers into unemployment. With recent surveys suggesting rapidly worsening business confidence and no evidence of an emerging hiring spree, their prospects of finding work in the private sector are bleak.
The independence of the Office of Budget Responsibility has rightly been called into question; a matter that can only be addressed by its reporting directly to parliament. But even it has joined the International Monetary Fund and private sector economists in downgrading the UK's 2011 growth forecasts, to just above 2 per cent, below the rate required to lower unemployment.
I am an economic realist. The public finances need addressing. Labour's plans would halve the budget deficit and remove the bulk of the structural deficit in four years. It is the sensible, credible middle-ground between extreme cuts and unchecked spending. But the government's proposals, designed without an escape hatch in the event of slowing growth, reflect ideology, not realism.
The government also has no plan for jobs: cancelling the loan to Sheffield Forgemasters, stalling on the Green Investment Bank and still lacking a trade minister (in spite of George Osborne's hopes for an export-led recovery).
本届政府也没有就业计划：它取消向谢菲尔德铸锻集团 (Sheffield Forgemasters)的贷款，拖延设立绿色投资银行(Green Investment Bank)，而且还没有任命一位贸易部长——尽管财相乔治•奥斯本(George Osborne)希望实现出口拉动型复苏。
Instead, it should focus on the jobs deficit: the 2.5m people looking for work. Sweden made halving unemployment its priority during its 1990s fiscal consolidation. But Britain is repeating Japan's response to its crisis: pulling stimulus too early, raising value added tax and relying too heavily on monetary policy – leading to unemployment and stagnation.
Our economy must be greener, more innovative and more balanced. In the face of a widening current account deficit we must play to our strengths in manufacturing, services, universities and creative industries – as well as a properly regulated financial sector. This needs the public and private sectors to work in tandem, starting with five steps to end our jobs deficit.
First: create a British Investment Bank to facilitate investment into infrastructure, support good small businesses struggling to access funding and provide capital for export industries. The bank would be owned by the public, but would raise money on capital markets and be controlled by a commercially-orientated board. For decades similar banks in Germany and the Nordic region have helped their private sectors flourish. Financial reform gives us an opportunity to join the party.
Second: set and achieve a goal of having 60 per cent of 18-30-year-olds in university, higher level vocational learning or an apprenticeship by 2015. Growth depends on improving our skills base, not condemning our population to long-term unemployment by abolishing the Future Jobs Fund.
第二：制定并实现如下目标：到2015年，让60%的18至30岁年轻人进入大学、高级职业教育或学徒岗位。增长取决于不断提高我们的技能基础水平，而不是废除未来就业基金(Future Jobs Fund)，使得大批英国人长期处于失业状态。
Third: deploy the public sector to invigorate local economies by maximising the multiplier effect of public services. Cutting Building Schools for the Future is not just bad for education, it will hit construction jobs.
第三：尽可能扩大公共服务的倍乘效应，利用公共部门提振地方经济。削减“为未来建造学校”(Building Schools for the Future)计划不仅对教育不利，还将影响建筑业的就业。
Fourth: focus on increasing productivity and the quality of work in low pay, low value sectors of the economy. This requires a new workplace settlement, based on hard work, innovation and fair pay. Reformed corporate governance and models of ownership can give employees a greater stake in the success of their companies.
Fifth: pursue an industrial strategy for the 21st century, marshalling the state's tools of procurement, regulation, planning and taxation to attract the private sector where it is needed most. We can learn from Portugal's initiative on infrastructure for electric car-charging, a viable commercial case for investment in manufacturing. Germany's renewable energy policy combined feed-in tariffs with regional development areas and research, creating more than 300,000 jobs. Israel's approach to commercialising university research has taken it to the top of the innovation charts. Globally, governments are helping to expand the economic pie. Ours can too.
At the last election Labour could not find a single business to support its economic policy. I am determined to put this right – and lead Labour into again becoming the party of spreading wealth creation, not just spreading wealth. It is not good politics to have bad economics.
The author is MP for South Shields, and a candidate for the leadership of the Labour party