I don’t know if you have seen the Labour party action plan for family budgets. Or our insistence that the NHS will be the defining issue at the next general election. Well, I’m sorry to tell you, it won’t be. In the vein of Hopi Sen’s great piece on the Challenge for the Labour Right, I want to suggest my own three-point plan to give us a fighting chance at the next election:
1) Admit culpability for the economy;
2) Apologise profusely for the economy;
3) Promise to never do it again.
It feels like a tired old drumbeat, I know, and I expect many of you will be frothing at the mouth to tell me how wrong I am. The truth is, many people feel this way – rightly or wrongly. While we were dithering in our navel-gazing leadership contest, the Tory-led coalition lay a lot at our door that we will never be able to shed. It is about perception and consensus, which work hand-in-hand and create the political landscapes that we operate in. For example, take two revolutionary prime ministers of the 20th century: Attlee and Thatcher. Attlee created the postwar consensus, and the perception of the majority of the population, and thus the political conclusions of their representatives, was to sustain a welfare state and to subsidise mass manufacturing and other industry. The Tories competed not on terms of taking off the ‘corset’, but of a paternalist socialism versus a state-controlled socialism. Thatcher had other ideas – our perception of this model had changed, we were now the sick man of Europe who couldn’t manage to even bury their dead or collect their rubbish. The veracity of such perceptions is debatable, of course, but it allowed her to create her own consensus, the idea of the shopping basket economy and of greater freedom of the individual. Whether you agree with these outlooks is not essential or even pertinent: that is the consensus she created and still, to a certain extent, the rules of the game we currently play.
Allow me to pre-empt the two arguments that are usually put forth to counter this economic mea culpa. The first is ‘the alternative’, the utopian rainbow alliance just waiting to be formed to turf out this vicious rightwing coalition. The second is that we could never hope to outflank the Tories on cuts anyway, so we may as well continue bawling in our echo chamber about the bankers.
I am not an economist, and I’m not going to copy and paste Stiglitz or put forward an economic alternative to you. What I know is this: sometimes the economy is good, and everyone is happy and there is lots of money, sometimes the economy is bad and there is not a lot of money and then good music and gritty kitchen sink dramas are made (that bit, unfortunately, is yet to come). We have entered an age where austerity is the consensus and the perception is that it is our fault somehow. What I do know is that we were running a budget deficit from 2002. When I learned this, to my untrained eyes, this seemed a bit bad. Maybe I’m a child of that shopping basket economic consensus. But even if I could articulate a very specific economic plan that did not involve a single cut, I doubt that would resonate with very many people at all. The perception is there rightly or wrongly, and that is why we need the mea culpa.
That is not to say, however, that we cannot offer any different vision. I am not suggesting that we do not criticise the Tories on any cut or any reorganisation, or promise we would cut harder and deeper. But we can fight a different battle and that is one of competence. We have a tendency at the moment to jump on any left-populist cause, as any opposition may feel tempted to. But we should, ultimately, as any serious political party in Britain should, avoid an entirely Jean-Luc Mélenchon lurch. In a time with dealigned voters, when the first to the centre-ground becomes king, what matters increasingly is our voters’ perception of competence. Those are the rules of the game and a competency model of voting is here to stay for the foreseeable future.
We need a mea culpa. We need to regain our credibility. The thing is, this coalition is utterly incompetent, and to beat them we need to be riding into 2015 looking like a party ready for government. We don’t need to self-flagellate forever, but a little humility would go a long way.
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Curtis McLellan is the international officer for Labour Students and former club co-chair of Manchester Labour Students, and tweets @cjmclellan
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Absolute nonsense, both in factual terms and in strategic terms. Far from being culpable for the economy Labour got the economy broadly right when it was in office.
It gave us an unprecedented ten years of unbroken growth which allowed us to restore our public services (itself a vital underpinning of our continuing economic strength) after years of Tory neglect. Agreed much of the growth was based on borrowing (given the unwillingness of the public to accept higher taxation) but this borrowing and the related fiscal deficit was well within accepted limits by historical and international standards. It only came to an end as a result of a once in a lifetime global financial crisis which hardly anyone saw coming and it was Gordon Brown who led the world in preventing the ensuing recession from becoming a 1930’s style depression.
Moreover, events since the Tory-led Coalition took over have proved that Ed Balls was right to criticise the government for cutting too far and too fast and not putting sufficient resources into growth. All this has been validated by leading economists like Paul Krugman, David Blanchflower, Robert Skidelsky and Anatole Kaletsky. If Labour has been at fault it is in not getting this message across to the extent required.
Even if Labour had got it wrong , it would be a massive strategic error to admit this after two years of arguing we were right. Not only would it simply buy into the Tory myth of Labour incompetence when we were last in office but it would also confirm the main charge that will be made against us at the next election, that however bad things are Labour cannot be trusted on the economy.
I suggest you stick to international matters, Curtis.
Stan you are being too harsh. Fact is we lost the election because people didn’t trust them with their money. We have to realise that sorry truth that we are on the backfoot, and even though the Conservatives and the Liberal Democrats are wrong to go ahead with that their stupid economic strategy that is squeezing the blood out of our economy and even though we are right, we have got to realise that people still do not trust us. I agree with you Stan when you mentioned our achievements on the economy, and you are spot on when you list them but we were ‘broadly right’, not ‘always right’, and we have got to accept that we made mistakes on the economy. but we cannot deny the fact that we got rid of the 10p tax rate, we had the 75p pension rise, we sold the gold reserves at a huge loss, we failed to boost the manufacturing industry costing jobs up North, we did not always get value for money like on PFI, NHS IT system and even to some degree on Building Schools for the Future (though the government was UTTERLY wrong to scrap it) but worst of all we failed on financial regulation! We need to be humble and accept that because of mistakes, the public blame us wrongly for the deficit and the crash and if we just become complacent because we are right on economic policy and made good decisions in government and just tell the country “you are wrong” then we will lose 2015, and my fear is Stan that you are in a mindset of trying to win 2010 whilst attacking those, like Curtis, who have legitimately described the challenge that we face now. Though I believe the Five Point Plan, is right I think we have not equally prioritized how we cut if we were in government. Also we need to bold on welfare reform, so it is true to core Labour values and adheres to our fiscal realism. Also, Ed Balls needs to be saying that Labour’s top priority is “the deficit” and we need growth and jobs to tackle the deficit rather than saying (which is what it sounds like to many) we need to ignore the deficit and concentrate on growth and jobs.
I think one way that Ed Balls would be brave to propose a “net worth tax” similar to the Buffet tax rise rule in America. According to Labour’s ancient “radical liberal tradition” we should be looking to tax wealth as well as income. Now, the government are on the back foot in public opinion because they look like they are on the side of the rich but we are below on taking tough decisions, now is our chance and that’s where this “net worth tax” comes in. The idea because there are eleven billionaires in our country, the vast majority (if not all) are paying no taxes through “legitimate” tax loopholes we could call for a minimum rate of tax, set at fifty percent, on their total net worth which they will have to pay. This can tie into our call for “responsible capitalism” but also we could say that it is unfair how hard working middle class people are being squeezed and are paying taxes out of their hard earnt money but the richest people in the country do not pay their taxes, and therefore it is time for some real national solidarity and true patriotism and a time when Britain is going through times of fiscal constraint. A net worth tax can raise at least £23.5bn a year which we could spend on cutting the deficit. It might sound a little leftwing but it will only affect 11 people in the entire country and if we sell it as something patriotic, fair, fiscally realist and for the good of the entire nation rather than as some ideological junk which was ripped out of a page of that damning suicide note we had in 1983, then we will be able convince the country to support it and get the upper hand on the economy through talking about it, as well as even MORE policies to deal with the deficit and boost growth.
Curtis: it’s not a question of mea culpa. It’s simply a matter of telling it like it is, warts and all.
There is little doubt that the 1997-2010 Labour government failed to see the 2008 crash coming. So it then failed to take preventive action. But afterwards it took the right remedial action. Growth resumed.
By contrast, Tories and LibDems, on taking office, switched to the wrong remedial action. They too had failed to see the crash coming. They too had failed to propose preventive action. And now they have distinguished themselves by selecting a quack remedy. Growth collapsed and continues to flat-line.
I can’t see that this description of events won’t be understood by most people in the UK. It’s just a matter of telling it like it is.
But it is also worthwhile getting to the take-home message: Labour failed to see the crash coming because it believed the world banking system was not going to collapse from a US housing bubble. Casino capitalism – irresponsible capitalism – seemed robust. But it wasn’t. And Labour learnt that lesson pretty fast. First Brown and Darling shored up the banking system and pressed hard for much tighter banking regulation. They led the world on that. Then Mandelson broke with the consensus and pushed for a revival of manufacturing capitalism. And Miliband stressed the need for capitalism to be responsible. He has led the way on that.
You seem to want Labour never ever again to fail to see a crash coming. That’s impossible. And for Labour to promise t0 see a future crash coming would be laughable.
I absolutely agree with what you said Martin, but that is not what Curtis is saying. He is saying that we have got to reach out to the public because we are not yet fiscally credible, and we need to be fiscal realists otherwise we will not be trusted with the country’s money again. They blame us for the recession and the deficit, unfairly I know, but we have to realise that and the problem is that we are not talking enough about cuts that we would make and other ways of reducing the deficit, even though we are correctly talking about growth and jobs.
On responsible capitalism, I love it since it goes right to the heart of fiscal realism and our founding values. But the public want more policies on responsible capitalism and less soundbites. Mutualising RBS and Lloyds TSB, regulating the Big Six, capping loan costs, introducing rent control and giving tax reliefs to ethical banking might be a start!
Hi ThePurpleBooker
I am glad we agree that Labour needs to tell like it is (rather than indulging in self-flagellation).
And I agree that Labour’s “too far too fast” critique needs fleshing out with a concrete “less far less fast” set of proposals. But those proposals will have to wait until 2015 (probably) if they are to be serious.
In the meantime, I think Labour has to develop links to people who are supporters of responsible capitalism and responsible growth. The success of such a strategy will be measured by Labour’s ability to attach individual Conservatives and LibDems to the ‘responsibility agenda’. My mind goes back to the significance of Sean Woodward quitting the Tory Opposition benches.
Purplebooker, fiscal credibility does not come from being in step with a right-wing ideological consensus but from being proved right by what happens in the real world when the right-wing approach is followed. This can be seen in the contrasting fortunes of the ailing economies of the Eurozone and the improved performance of the US following a more Keynesian path out of the crisis.
As Martin says, spelling out what specific cuts we would make can wait until nearer the next election and self-flagellation about the past can only aid our enemies. In this latter respect winning 2010 is a key part of winning 2015 and we should seize every opportunity to show how we were broadly right then and are right now.
Stan, it’s not right wing to say how we would cut. We have been too slow to be straight with the public and say the extent and the amount that we would have to cut. I think we owe the public a bit of honesty, rather than shading it from them. Fiscal credibility does not come from being in step with a rightwing ideological consensus, you are right, but fiscal credibility comes from admitting your mistakes and talking about the cuts that you would have to make.
We need to start talking about cuts as well as growth because people will just think we are going to spend, spend, spend like there’s no tomorrow.
All thr right will do if we go into guilt mode is to say “We told you so – never trust ths lot again – even they say they were useless, etc” So it’s a non-starter. We need to offer positive alternatives, positively framed. Purple Booker is dead right that growth has to be the answer to the deficit, not cuts and austerity – and I call in aid my neighbour, a dry right-wing stockbroker, who was arguing this two years ago!
Hang on, Roy Boffy you are misinterpreting what I am saying. I mean this is why I get really frustrated sometimes. Arrogances will not wash. Haven’t u and Stan and Martin realised that the country are believe that we terrible on the economy. Not admitting our mistakes and being more honest about how we would cut is the root to fiscal responsibility. It’s a question about growth any more really, it’s about how we can get our message out but get humility and strong fiscal realism rather than arrogance, complacency which is what is clearly being shown.
Thank you for your comments, but with all due respect, Martin and Stan have fallen into the bawling-into-the-echo-chamber trap. Remember: the truth is not essential or even pertinent. That’s the point I’m making.
I do believe people have some sympathy for us about the financial crash. But, there is certainly a perception that we spent too much. Driven by a right wing tabloid press, the idea of the public sector non-job, elf’n’safety and red tape stifling business etc. really can change the perception of a modest budget deficit to horrific over spend and fiscal imprudence. And we do ourselves no favours screaming until we are blue in the face about the Bankers and the global recession.
What was it? Maybe we truly, truly believed we’d ended boom and bust. And for that we should apologise.
We need to get it out of the way, hold our hands up. Denial won’t wash.
Coming up to 2014 and 2015 we need to be looking like a government in waiting. If we are still fighting the old battles of 2010-12 then we may as well forget it. I reiterate: competence, competence, competence.
Curtis, with respect I think you have simply fallen for the Tory propaganda spread by the right-wing press. For example Brown never said that we have abolished boom and bust. He said we have ended the OLD boom and bust. The OLD boom and bust was about an inflationary boom followed by a corrective high interest rate recession. There was none of that on Brown’s watch. Ten years of unbroken growth only came to an end as a result of a once in a lifetime global financial crisis, as I’ve said before.
To apologise for MISperceptions created by our enemies is plain madness.
I suggest you mug up on basic economics before continuing to prostate yourself before the Tory tabloids (and broadsheets).
Hi Curtis
I agree it was wrong for Gordon Brown to have seemingly claimed to have ended the cycle of boom and bust. Whether it was an “old” boom and bust cycle or a “new” one, it is unwise for a politician ever to say never.
If Brown won’t apologise, then so be it. The Miliband leadership should. Not simply because the Brown boom busted. Not simply because Balls was in the Treasury at the time. Not just because the concept of market economies having no business cycle is unreal.
But because, to win in 2015, Labour will need policies that deal with a boom-bust cycle that a former Chancellor had seemingly declared dead.
So the apology is not, as you suggest “to get it out of the way”. It is part and parcel of the concept of encouraging a “responsible” capitalism…. properly regulated (as the post-crash Brown wanted) to cut systemic risk.
The Brown boom busted for the exceptional global reasons I have previously mentioned not for the old business cycle reasons you seem to believe in.
Policies will therefore be needed in 2015 to deal with the results of that global crisis (and the way the Coalition government has handled it) not to deal with the old boom-bust cycle.
So I repeat, to apologise for things we are not responsible for is sheer madness. And I thought you were one of the saner ones.
Hi JohnJustice
You are making an economic case. But the issue is political.
1. It was politically unwise for Brown to declare Labour has ended ‘old’ boom and bust. Who knows, old B&B may return.
2. Labour failed to foresee the ‘new’ B&B – what you call an “exceptional” B&B. If Labour does not admit it failed to foresee this new, exceptional 2008 crash, then, who knows, the new, exceptional B&B may return. I am sorry Labour failed to foresee 2008. You are too – surely. Everyone is sorry.
3. Labour has to say it is sorry it failed, if it wants to make the case for Responsible Capitalism. This is simply because the case for RC rests on the causes of the crash and is justified by the crash.
4. If Labour had foreseen the crash, then it could/would/should have made the case for RC much earlier. And it would have had the power to act to build RC sooner. For example: [a] Mandelson’s ForgeMaster gambit could have been made in 2007 (rather than 2010); [b] the growth in public spending could have been curtailed more openly and vigorously. On both issues, the Tories would have protested. And would have looked stupid by 2008.
5. Once Labour has said ‘sorry’, then [a] it can ask why the Tories and the LibDems also failed to foresee 2008 [b] it can take the argument forward and say that Labour had under-estimated the instability of neo-liberalism / Thatcherism / free market purism [c] it can attack the coalition’s economic policy as neo-liberal dogma (i.e. go beyond the ‘too far too fast’ story).
In a nutshell, an apology is one step back that allows two steps forward.
By the way, the New York Times is running a series of articles calling for a bonfire of the neo-liberal vanities e.g. Throw Out the Probability Models: http://www.nytimes.com/roomfordebate/2012/04/01/how-to-teach-economics-after-the-financial-crisis/throw-out-the-old-economic-models
Being sorry for not foreseeing the 2008 financial crisis is rather different from apologising for being responsible for the UK’s debt crisis which Curtis seems to want. And I think Labour people have already said something to this effect. Incidentally Labour set up a financial agency to keep a watch on these things immediately after taking office in 1997 so if anyone’s to blame here it’s that agency.