Anti-austerity policies cost Labour election victory, Jon Cruddas claims
Anti-austerity policies are a vote loser and Labour's defeat at the general election was caused by a failure to persuade the public it could be trusted to tackle the deficit, an independent review has found.
The study, led by the party's former policy chief Jon Cruddas, found that "the Tories didn't win despite austerity, they won because of it".
Mr Cruddas said the party had to accept "hard truths" that the public backed the Tory squeeze on spending and welfare.
"On the basis of the data, the public appear to think anti-austerity is a vote loser - we cannot ignore that," he said.
"We can seek to change the views of the public, but it's best not to ignore them."
Labour leadership contender Jeremy Corbyn has enjoyed a surge in support for his anti-austerity message, but Mr Cruddas warned that would not appeal to the wider electorate.
Mr Cruddas said: "Voters did not reject Labour because they saw it as austerity lite. Voters rejected Labour because they perceived the party as anti-austerity lite."
In an article on the LabourList website he said: "The Tories won because voters believed they will cut the deficit, even though a majority understand that the economic system is unfair.
"The Tories' message on the deficit was clear, Labour's was not. The Tories are trusted to manage the country's finances, Labour is not."
Polling for the review found that 58% of voters agreed cutting the deficit was the "top priority", with just 16% disagreeing. But some 60% agreed the economy unfairly favours powerful interests and 43% said they would vote for a party that would redistribute wealth from the rich to the poor.
Mr Cruddas said: "The message I take from our poll findings is that the electorate in England and Wales is both economically radical and fiscally conservative.
"But first comes fiscal responsibility, then economic reform."
Labour's crushing defeat in Scotland to the anti-austerity message of the SNP "does not set a precedent for its leftward shift in England".
"The SNP's anti-austerity politics simply increased the risk that Labour represented to English voters," he said.
Indicating the need for a federal approach, Mr Cruddas said: "Scotland poses a dilemma for Labour. It has a different political tradition and its voters are more progressive and collectivist minded than in England.
"The English tend to be more individualistic and have a more 'small c' conservative disposition. Labour will need to develop a more federal politics to accommodate the paradoxes of radical and conservative dispositions and our national cultural differences."