Caroline Lucas: Balls calls into question the very purpose of the Labour Party

Caroline Lucas, Green MP, made this response to Ed Balls' retreat on cuts in the Guardian:

In his interview with your paper on Saturday, Ed Balls effectively holds up a white flag and admits that Labour has given up any attempt to set out an alternative economic agenda (Beyond the hair shirt: Labour party can give Britain the tough love it needs, insists Balls, 14 January).

His capitulation before the Tory-led coalition's definition of economic credibility as meaning ever more fiscal austerity, and his jaw-dropping statement that "we are going to have to keep all these cuts" calls into question the very purpose of the Labour party.

Moreover, the choice he poses between higher public sector pay or growing unemployment conveniently ignores the fact that many public sector workers are on very low incomes, and falsely suggests that we can't afford to fund both. It is investment in decently paid jobs that generates income, and thus the tax revenues to pay for credit or borrowed money, not the other way round. Instead of trying to outcompete the government in some kind of masochistic virility test to see who can threaten the greatest austerity, an opposition party worthy of the name would be making a far stronger case that austerity isn't working, and offering a genuine alternative.

A combination of more progressive taxation, a crack down on tax evasion and avoidance and, crucially, Green quantitative easing to deliver investment directly in the new jobs and infrastructure the UK urgently needs to make the transition to a more sustainable economy, would do far more to challenge the government than the Tory-lite policies set out by the shadow chancellor.