Throughout the 1980s, the images of the ‘winter of discontent’ – picket lines at hospitals, uncollected rubbish, and the unburied dead – were successfully crafted by the Conservative party into popular folklore that underpinned Labour’s image as economically incompetent.Never mind, of course, that the Conservatives managed – in the space of just ten years after Margaret Thatcher arrived in Downing Street – to engineer two deep recessions, interrupted only by a brief, unsustainable boom.
Never mind, either, that Labour’s poor reputation on the economy rested, in part, on the appalling record of Ted Heath’s administration, from which the Thatcherites successfully distanced themselves – creating a widely held belief that the three-day week and the strikes of the early 1970s all occurred under Labour’s watch.
Seven years after Labour came to power, Gordon Brown’s stewardship of the economy has well and truly shattered this Tory myth.
Labour has managed to achieve both economic stability and progress towards greater social justice. We have not just the lowest interest and mortgage rates for nearly 50 years and the lowest inflation for nearly 30 years, but also employment levels not seen for 25 years and record, massive investment in our public services. Labour could not have promised such a record in 1997 – nobody would have believed that we were capable of achieving it.
There are, of course, still economic challenges to be faced: investment in public services needs to be matched by reforms that deliver greater choice and personalisation. We need to raise the long-term growth rate of the economy (our GDP growth under Labour has been stronger than the rest of the European Union, but weaker than the US under Bill Clinton). Productivity rates are still much lower than in the US and much of the EU.
This, in turn, requires greater capital investment, improving workers’ skills, and more investment in research and development. And, yes, to entrench economic stability over the long term, Britain does need to bite the bullet and join the euro.
But, in the short-term, Labour is faced by an important political task: to create in the public mind a more compelling message around our economic record.
There is, of course, a precedent that Labour needs to learn from. In 2000, Al Gore ran for what was effectively a third Democratic term in the White House. There are, naturally, very important differences between that election and the one that Labour faces next year. However, it’s also important to remember that a record of prosperity alone does not guarantee electoral victory. And a Gore-inspired, tired, class-based message that purports to pitch the ‘people versus the powerful’ and speaks solely to those who have lost out in the new economy simply will not cut it with the electorate.
First, Labour must make clear (in a way that Gore spectacularly failed to four years ago) that very particular policies and actions by the government have played their part in creating prosperity. Too many voters, while recognising the strength of the economy, do not credit the government for its role in achieving this (although we must remember, too, the critical role played by successful businesses and their workforces).
Second, we need to spell out a new narrative about progressive economics, a new folklore about the party and the economy, as compelling as that which the Tories used to tarnish Labour in the 1980s. The party has not successfully communicated how economic growth and stability fit into its wider story about building a fairer country. If City entrepreneurs, soaring house prices and wider share-ownership were the motif of Thatcherite economics, then why shouldn’t the unemployed youngster moving via the New Deal to work, the family finding that work at last pays more than welfare, and the small business being assisted to set up in a regenerated inner-city area become motifs for the new progressive economics?