Part of Labour's problem is they never fully challenged this utterly bullshit narrative.
Labour's spending did not cause the global financial crisis.
Austerity was not required, it was what the tories wanted.
Other countries didn't pursue an extreme ideological austerity, and emerged from the global financial crisis no differently than the UK, and in some areas the austerity is thought to have delayed the economy recovering.
Because the outgoing Labour government never challenged that the tories were able to inflict horrific austerity on poor areas of the uk, and escape much of the blame for it - the blame falling on "labour spending" or immigration. Which is why we are where we are today.