Today’s GDP figures offer a glimmer of light for the economy, up 0.3 per cent following the previous quarter’s contraction, thus avoiding a triple dip and raising hopes of good times ahead. Though still small, the better than expected rise has allowed George Osborne to claim the data is ‘an encouraging sign the economy is healing’, evidence the government’s policies are helping build ‘an economy fit for the future’. But what should Labour’s strategy be in response to the news?
The immediate reaction has been steady if predictable, Ed Balls maintaining the ‘flatlining’ narrative, calling the stats ‘lacklustre’ and the recovery the slowest ‘for over 100 years’. But it is what the party has to say about the medium- to long-term economic picture, looking forward, that will decide its electoral fate; that the coalition’s policies have failed to deliver sustained growth and prosperity up to now will not of themselves mean Labour gets credit for its foresight in predicting their effect, any more than the fact it was on our watch the recession started, allowing the Tories to blame us for what followed. It is both parties’ vision for the future that will decide it.
First up should be the formal publication, or at the very least briefing, of some policies, any policies, to end the vacuum that has arisen, filled in the absence of anything concrete from the leadership by claims from the Fabians that spending will rise post-2015 to the critiques from everyone from Tony Blair to Len McCluskey. It’s been three years since the last election, two and a half years since Ed Miliband became leader – and with David Cameron appearing to finally get his act together with the appointment of the bright, talented Jo Johnson to head the No 10 policy unit, the time is surely now.
By the time the next set of GDP data is out at the end of July, Labour needs to do more than just attack – even more so in the event of continued and increasing growth – but have some answers to what it would do, how much they would cost and what they would bring, to be expanded on at conference a few months on.
There are arguments to be made for more immigration, closer European integration and aviation expansion to deliver growth, though it will take a brave politician to make them against public and press hostility. Likewise on big business.
In terms of political, as opposed to policy, strategy, meanwhile, Labour shouldn’t be afraid of personalising the battle on the economy – not personal attacks on Osborne et al but highlighting the impact of his policies on ordinary people, as unions and campaigners have been doing, and how their lives, on an individual basis, would be further improved by our plans; human stories are more relatable to voters than the stats which frame them.
Ultimately, to win the future Labour must prepare for the possibility that the economy will be on the up from now till May 2015, even if a number of people won’t feel it, and that the downturns of the first half of this government will recede from public consciousness; for many, the fact Osborne was wrong doesn’t mean Labour is the answer.
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Shamik Das tweets @ShamikDas
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Yes, there’s an outside chance the ‘zero-growth’ critique of Osborne may not work in 2015.
But Labour’s economic case does not rest solely on the Shadow Chancellor’s patch.
It also depends on the strength of our plans for NEW growth – for innovation.
Here we need, ideally, “zero-cost / maximum growth” policies. Such policies boil down to reform of the entire innovation system:
* Reform of the governance of innovation (to stop the siloisation (by Treasury) of ministerial research, development and innovation budgets)
* Ending R&D tax credit scandals like Barclay’s getting more credits than any other UK company
* Supporting the construction of coordinated networks so as to enable cost-saving network efficiencies in the various fields of research, development and innovation
* Using tax credits to force more innovation investment in place of share buy-backs
Industrial policy is usually presented as a way of spending tax payers money. But it need not be that. It can be a way of using existing investment more efficiently and less for the benefit of over-paid executives and reckless investment bankers.