Stalled, flat-lined and stagnant, just three words used repeatedly by the Labour party in these last few days and weeks to describe the economy. Sure, things are bad. Unemployment is touching three million, a record one million young people are out of work, thousands more being made redundant in the public sector, and a private sector stubbornly unable to grow. All in all, an economy in a dire state.
But I can’t help being unable to shake that nauseating feeling that the same situation cannot be said of David Cameron, George Osborne and the government. With an economy in such a precarious position, experience tells us that, if in government, Labour would likely see their polling numbers propping up the nearest lop-sided table. They’d be disastrous, worse than in the difficult days under Gordon. Yet, if I was advising this lot in power now I’d be pretty happy. And I imagine behind closed doors David and George are pretty happy too.
Sure, they’re down in the polls (but probably only by six or so points in what amounts to a soft lead for Labour), but they’re up where it matters and on what the next election will all be about: who do you trust to run the economy more – David and George or the two Ed’s? Frighteningly, David and George are winning hands down every time and in every poll, albeit that lead has shrunk a little (they’ve got plenty of lead to lose though!).
Now, don’t get me wrong, I believe that the broad thrust of what the two Eds are proposing on the economy is right for this moment in time. It’s a touch of Keynesian action to revive a stagnant economy, and a real attempt to set out an alternative strategy to the government. But it just won’t work.
It won’t work because it simply reinforces the picture painted so well by the Tories when in opposition and now in government: ‘Labour only know how to do one thing – spend your (the taxpayer/the voter) money, and they’ve spent all the money we have’ (a picture perfectly reinforced by Liam Byrne’s wit-free letter to his successor as chief secretary to the treasury).
That picture certainly isn’t accurate and there were a whole host of reasons why the treasury’s finances were as bad as they were when Labour left office, but we failed to set out an electorally credible deficit-reduction plan to sort out our overdraft problems – borrow more again in 2010, and only pay back half our debt in this parliament.
The Darling plan was, on paper, a strong way of managing our finances, but it’s not one the electorate bought into. They may not have been convinced totally by the Tories, but the idea of ‘our national credit card being maxed-out and the need to stop spending and pay back our debt’ rang far more true than ‘we’ll borrow more now and pay it back again later.’ If voters believed there was no money left, why would they vote for a party advocating more spending?
And it’s the same reason why Labour and the two Eds are still way behind on who the public trust to run our economy. The Tories (and now Lib Dems) still control the message – ‘that lot left no money so it’s their fault things are hard’ – and it gives them a lot of wiggle room with the voters, even when things turn disturbingly sour as they did on Tuesday when the chancellor made his Autumn statement (the chancellor’s plan to clear to structural deficit over two parliaments, instead of one, ensured the argument at the next election in 2015 will be about nothing other than the economy).
So, given our experience at last year’s general election, I ask: if voters believe there’s no money left and that it was our fault, why would they vote for a party advocating more spending next time around?
After all, that’s exactly what the two Eds are saying. The five-point plan has £20 billion plus worth of extra borrowing from its three tax cuts (reversing January’s ‘damaging’ VAT rise for a temporary period; immediate one-year cut in VAT to five per cent on home improvements, repairs and maintenance; one-year national insurance tax break for every small firm which takes on extra workers), and we must have ‘spent’ the bankers bonus tax three times over by now(!), with no tangible way of knowing just how effective it will all be. The Tories control the message and can tear it apart (particularly for undecided voters) by shouting loudly into their microphone about how, yet again, Labour are reckless and throwing borrowed money wildly around with no real outcome (the Tories are in government so have a bigger microphone to shout through!)
So what should Labour and the two Eds do? Labour should accept the level of cuts and the timescale the government are proposing on cuts (we can’t do anything about them in opposition anyway) and make the argument about the best use of public money.
Why is the Government cutting Corporation Tax to well below the level of other G8 nations but hammering the pensions of public sector workers? Why are they investing in major road infrastructure, but completely ignoring the green economy? Why are they decimating the ordinary worker’s employment rights, but letting Vodafone et al. off their huge tax bills? And so on…
This certainly isn’t what many Labour MPs or members will want to hear, and I dare say that’s not what many Labour supporting voters will want to hear from their party, but we don’t win by just saying the things we and our supporters want to hear. The thing is, too many voters in the places that matter electorally (‘middle England’) still believe that we need to make these cuts (the five-point plan means nothing to them) and that as a party we are financially incontinent, and until we recognise that we’ll be unelectable.
The five-point plan is ok for now, nothing more. But if the economy picks up in the last quarter of 2012 or in early 2013, then it all becomes about the economy and the best use of public money derived from a growing economy and an increased tax take (still in the context of reducing the deficit Labour left behind in 2010). The five point plan won’t feature, and we’ll be no closer to convincing the voters that Labour knows how to make the best of use of public money.
Anonymous Researcher works for a Labour shadow minister
Photo: Yourdoku
Dear Anonymous researcher,
Lets hope in an open “re-founded” and “open” party we have do not have too many people being afraid of revealing their identity when they ask questions.
Yous position is legitimate because questioning the “Balls’ prescription” on the Economy is understandable as it would be in any political party as it draws attention to the subject area and if the Shadow Minister has done his/her work right then the scrutiny will end happily.
In this case I had to wait until being Independet before challenging the Balls position, he may well be the economist (a small section of sociology) whereas I am from a more varied and wide-ranging science background, incidently you may have notice that we have few science grads in parliament….that uis because politicians with PPE degrees who have no indepth philosophies and play “pretend” science with stats can’t win many arguments against legitmate professional scientists (I am not one, I am merely a jack-of -all trades in life and the mirror opposite of a typical career politican).
This is part of the point incidently.
In the full context of Government expenditure and impact on the Economy the balls Blair-card plan is weak. It’s affect is very limited and I guess the only reason they have clumsily related bank bonus taxation to jobs for young people is a cynical attempt to patronise young people into becoming Labour party leaflet fodder…wellwhat else do they have for young people?
The simple reality is that being same as the Tories (do you remeber labours appallingly weak position before the General Election?) with balls and Brown avoiding discussing things like polices with even their Mps refusing to say anything on live TV Question Time as even today Labour is regressive on lobbying and corruption and worse than the Tories which is a world first.
The reality is of course is that on the cuts there is full consensus between labour and the Tories, we already know that guys like Balls can say anything they want they have historically (GB on ID Cards etc etc) completely shown utter contempt towards the public and press (the latter occasionally understandably) and have not forgiven people for the expense scandal. Mps love money and how dare we ask them to even begin to live like us mere mortals with proper professional accounting procedures…that’s why you have Hugh Grant using his celebrity position to attempt to regulate the media a very unwise and I promise…damgerous thing to do. I need a free press in my role to find the truth the whole point of doing this is to ensure we can aspire to a better life by addressing real problems, whether they be polices or people though of course no sane person would promote phone hacking which is illegal anyway and the police not doing their jobs is a problem of the establishment more than anything else.
Balls then has no credibility, Millibandwagon rider has not defined himself at all and since labour has no opposition to Corporate lobbying how can it have a view on “good” and “bad” business, or is it the case that uncompetitve Corporations and Banks are “good” when they fund labour or give MPs special jobs that do not involve any real work.
The tories can use Lobbying to destroy labour. because of it’s dependence on poorer people (that it uses and abuses on a snobbish Metro-City whim) Lobbying guareenttes lower Labour turn outs as the expenses did when the super-ultra-elites in the grand plan decided Nick griffin would make a better MEP than the Labour candidates…well with labours position on democracy, dure process, and the basics I woudl ague the toss over the difference and they both love money according to Griffin’s expenses.
Labour is no longer a party a opposition, the public have been taking care of that, labour is not a Party that can behave responsibly on the corruption position so the economy credibility is going nowhere, Labour is no longer the party for the poor so as more people become unemployed the less support Labour will get, Labour is no longer the Party of the “squeezed middle” because they are scared, struggling and are looking for security and people like Balls and bryne cannot offer even a sense of comprehension or empathy or consequence because they have none, pride of the middle class will disolve and be replaced by something else…fear and they will more than happily blame labour for a decae or two rathe rthan themselves or the circumstances, in the meantime they will keep pressure on the Tories via protesst votes in non-essential elections as they perceive it…….
Anonymous yu were right to speak out the recession is indeed a “Falklands Island” scenario for Cameron and I look forwards to the Shady Shaow cabinet “raising their game” because at the moment it does not matter what they say nobody will listen as credibility is very limited.
“Yet, if I was advising this lot in power now I’d be pretty happy. And I imagine behind closed doors David and George are pretty happy too.”
Yeah, I bet they are bloody ecstatic at the lack of growth, having to borrow much more than anticipated, and not being able to hit their own targets in time for the next election.
Fact is, we’re so far from elections that poll numbers mean little, and Gideon’s own analysis 2012 is going to be even worse than this year. Surely you would recognise the likelihood/probability of electoral problems for the conservatives if the economy and unemployment does not majorly improve in the next two years? I mean, surely anyone with any mild political insight would understand that the experience/memory of hard times from tory austerity are going to be a massive problem for them at the next election, right?
It’s absolutely ludicrous to think the tories are anything close to happy about the state of the economy and their political position at the moment. They made a big gamble on how deep the cuts would go, and at the moment it looks like a reckless, stupid one.
Voters believe there’s no money left. But this is because few people consider how our currency comes into existence (overwhelmingly now through bank lending), the role that public spending plays in facilitating economic growth, etc.
Yet this does not mean people accept the cuts when it afffects them – on doorsteps I’ve heard some pretty contradictory arguments on the need for cuts, but the need to retain some prized area of spending.
Accepting the cuts timetable will do nothing to improve credibility – because it has no credibility. It isn’t working. Which is why the anonymous researcher for an anonymous shadow minister will not put their name forward.
I agree about the difficulty of getting our Keynesian stance on the economy over to the public at large. But kow-towing to the Tory narrative at this point will destroy our economic credibility completely and make it impossible to propose any pump priming in 2015 if that is what’s needed.
As I said elsewhere at this site “Labour has lost the argument miserably, not because we have got it wrong but because ordinary people just do not believe what we’re saying. That in turn is because people are extremely wary of what Oppositions say (“They were there when things went wrong and they’ll say anything to get back into power”).”
As I went on to say, the answer is to build up our credibility by “tracking down all the eminent economists who subscribe to our analysis, get them to sign a statement to this effect, present the statement at a high-profile press conference, and follow this up with an ongoing campaign to get the message across at all levels. The more the
economy collapses the more the public might be open to what independent, accepted economic experts are saying in support of what we are saying”.
And even if the economy recovers we can use this analysis to lay the blame on the Tories for the unnecessary pain they have inflicted on the country to get us to this point.
Hope Anonymous can get this vital message through to his or her shadow minister so that it can be passed on to the rest of the shadow cabinet.
“Sure, they’re down in the polls (but probably only by six or so points in what amounts to a soft lead for Labour), but they’re up where it matters and on what the next election will all be about: who do you trust to run the economy more – David and George or the two Ed’s? Frighteningly, David and George are winning hands down every time and in every poll, albeit that lead has shrunk a little (they’ve got plenty of lead to lose though!).”
I’ve read commentary along these lines countless times from people on the right wing of the Labour Party, and all of it misses an important point – the impact of a coalition on electoral dynamics.
It’s certainly true that economic credibility will matter come the next election, but you also have to think about the electoral impact of the potentially large number of Lib Dem switchers. Current polling breakdowns suggest that the Tories have retained the 36% of voters they won in 2010 while between a third and a half of Lib Dem voters have moved their voting intention to Labour. The exact proportion and the “softness” of this switch is unclear, but there is no doubt that a switch has taken place, and in significant enough numbers to give Labour a polling lead on its own.
Almost none of these voters will get to the polling booth and cross the Tory box because they trust Dave and George more on the economy. They don’t trust the Tories on very much, and they won’t vote for them regardless. Most will actually have switched to Labour because they prefer Labour’s economics to those of the coalition.
Your argument would only apply if we had a preferential system of voting, because the Tories’ lead on the economy and on leader approval comes from their greater approval among Lib Dem voters. Under FPTP, these preferences won’t help the Tories.
I see where you are coming from but I have to say it would be dishonest for Labour to just allow the Government to carry on with such a misguided startegy over the economy. We need to carry on with the strategy on growth but what we need to do is balance it out with an ever more credible strategy over the deficit, but we also need to defeat the Tories by showing we understand the real thrust of the economic argument and that they are being idiotic rather than surrendering – that would be wrong and will lose us trust. We just need to create our own cuts agenda but but build on the strategy we have already.
Anonymous Researcher:
You are right – we need a “free” growth plan for now (of course, if things get worse and worse, we may not need it… look at the way Roosevelt finally got the US out of the Depression by borrowing more for war).
I think that “free growth” is not impossible. The role of government is to enable coordination between stakeholders. Where enablement is not enough, direct coordination is needed. It is the lack of coordination in most sectors of the economy that causes waste, unnecessary duplication etc. I know that this is certainly the view in parts of the knowledge economy where I work.
The cost of coordination is small. But, if delivered effectively it would not only boot up the economy but also precipitate cultural change away from destructive monetarist short-termism toward constructive and collaborative competition. The pharma industry has recognised this in its recent conversion to the concept of “pre-competitive research”. The internet is founded on this idea: it couldn’t work unless some basic standards were accepted by all. Every industry needs help to define what it “pre-competitive” for it. This will generate “free growth”.
No, thank you. If we can’t do better then the Tories, then we don’t deserve to be in government. Get a bit of courage and forget about the south and middle England. We can actually get a working majority without them and have a better government too. The wastage of much of the Blair years was the consequence of too many MP’s who shouldn’t have been there in the first place terrified of losing their seats
We have to remember that for the Conservatives the economic crisis is an opportunity for them to implement their own ideology; a belief in a smaller, weaker state and the dominance and deregulation of the private sector against the public interest. Labour needs to formulate a fairer alternative which is at the same time is economically viable. If Labour simply accepts that all the Tory cuts must be implemented verbatim without plans to reform and regulate the financial sector and without workable policies to deal with inequality through a redistribution of wealth, then I think a lot of progressives will end up feeling disillusioned and apathetic towards the Labour Party come the next general election. Of course that doesn’t necessarily dictate a return to old style high spend big state socialism, or the neo-liberal ideology of New Labour. Instead we have to promote a vision built on co-operation and mutuality where it is the responsibility of every citizen to engage in the transformation of society and where the state acts as both an enabler and co-ordinator, as well as a direct provider, ensuring that fair and just government policies lead to a reduction in inequality and the empowerment of ordinary people.
The Tory idea of the ‘Big Society’ is flawed because it is simply being used as a smokescreen for implementing a right wing ideology. However, an alternative built on the old Labour traditions of co-operation/mutualism and guild socialism, with members of the public participating in the direct democratic ownership and control of public services, is certainly worth exploring.
At the same time we also shouldn’t be afraid to implement taxes on the super-rich in order to deal with the structural deficit (for example by introducing a ‘mansions tax’ on the sale and transfer of residential property valued at over £1 million) and taxing the remuneration packages and high bonuses given in the city. Labour’s support for a higher bank levy (which is in the five point plan) is crucial, but it needs to go further. A co-operative society is all well and good, but not everyone will want to participate out of choice when they have a vested interest in preserving their wealth. In these circumstances taxation is the only methodology that can be successfully employed by the state to redistribute wealth, although we should also acknowledge there are other agents of change within society which can lead and convince people to becoming more ethical in their approach to sharing their wealth.
Most importantly a commitment to reintroduce the future jobs fund, a building programme which will provide more social housing, a plan to improve the country’s transport infrastructure, and a commitment to providing clean energy generation and forging the green economy, must all feature in Labour’s next manifesto. These are all vital areas which need investment and I am convinced that if economic growth can be generated from it then the money needed to finance these projects will and can be found.
I agree that the general public seem to accept Cameron and Osborne’s approach to debt reduction, tend to blamethe last Labour government for the economic mess we’re in and have little faith in Miliband and Balls’ ‘cut slower and spend’ policy but I do not agree with the assumption that if a policy meets with polling approval it implies the policy is right or, conversely, if a policy has little polling support it must be a bad policy. Let’s be honest-the public generally behave like sheep and will obediently follow and believe a view that is repeated ad infinitum by the coalition and their media supporters irrespective of the truth, otherwise, why would any public sector worker rationally support the existing real cuts in their salaries and future cuts and job losses because “they agree with Cameron and Osborne that this government’s austerity measures are tough but fair”? I wonder what % of those polled were public sector workers?
Why, after general condemnation of the 30 Nov. strike from the politicians (including Labour, shamefully) and the media (usually, first question to striker “are you happy that your actions have meant children have lost out on their education?”) is anyone surprised that much of the gullible and ignorant public (I use the word ‘ignorant’ not in a derogatory sense but as in “unaware of the truth”) fall in with the ‘herd’ view. Why, after 18 months in office, coalition ministers (in interviews) always slip in “….tough decisions….the economic mess left by Labour”? Because “if it’s repeated often enough it’s accepted as norm”.
On the otherhand, Miliband and Balls (and the rest of the shadow cabinet) have failed miserably to mount a credible alternative economic policy: indeed, they don’t appear to have ANY POLICIES! The so called ‘5-point plan’ has two major weaknesses. Firstly, it is a plan straight from the last knockings of the last Labour government that Ed is so keen to discredit. Secondly, it may fit neatly into a manifesto commitment but is meaningless to the public. Every time I see a shadow minister being interviewed (or, more usually, attacked) I am left with the impression of observing a character-light academic participating in some back-room political seminar being bullied into dithering submission by an aggressive presenter. I see no conviction, emotion, character, fluency, presence, stature, fight etc. in any of them – they’re all anaemic and ineffective in the political gladiatorial arena. Not surprising, therefore, that they command little polling support at this time. You may love or hate John Prescott but he gives no quarter to interviewers and, more importantly, makes convincing arguments for many viewers.
Why can’t Labour base their policies (when they eventually get round to working them out) on “supporting and protecting all citizens” rather than seeing our country as a balance-sheet with assets and liabilities. I’ve heard Ed talking about ‘strategy for cuts’, ‘taxation changes’ and ‘good business versus bad business’ but I’ve never seen him declare his commitment to ‘protecting the jobs and salaries of all to the best of his ability’, or, ‘everyone, public or private sector, deserves a decent and liveable pension’, or, ‘our main priority is to stimulate growth – even if it means injecting money into the economy’, or, ‘everything I’ll do, I’ll do it for you!’.
The only hope for Labour (in its present form) is mass unemployment. It is for the coalition to lose power rather than Labour to gain it.