Labour should beware the fate of François Hollande, says Philip Collins. Read also Owen Jones’ response to How does Labour win a mandate for change, the theme of this Saturday’s Progress annual conference
Back in 1959, in the days when Labour never looked like winning again, Mark Abrams and Richard Rose published a book called Must Labour Lose? The book’s novelty was the heretical idea that a political party might, through the technique of opinion surveys, politely ask the electorate for its views every now and then. Their lament is both comical and more common than it should be: ‘Many people – notably in the Labour party – fear that the result will be to scale down policies to what people want.’
This, I would imagine, is likely to be the fate of an Ed Miliband government, should there ever be one. A radical prospectus will be scaled down, having made the party unpopular, to what people want. Miliband is often advised to seek a bold mandate for change but this advice contains a hidden flaw. No such mandate can possibly be won. The consequence of seeking a mandate for extreme radicalism, certainly of the kind that Miliband favours, will be a shrunken victory, either in coalition with the Liberal Democrats or at their behest as a minority administration.
A victory of this limited kind is no basis for carrying out a radical programme. The Miliband team insisted that the rules of politics changed in the shadow of the 2008 crisis. It was always a curious thought that politics would suddenly shift to the left. Indeed, since 2008 social democratic parties in Britain, Spain, Germany, Sweden, Norway, Finland and Portugal have all gone down to defeat.
With Labour’s opinion poll rating dropping, it really does not look like much has changed.
It is important to get the critique right. Labour is often accused of working to no plan. This is not true at all. Miliband clearly does have a plan, just not a very successful one. Labour has a clear intellectual position based on the belief that capitalism engenders too much inequality and that it is the job of government to rectify this. Labour will seek a mandate for the state to be active in reshaping markets such as banking and energy. It is worrying how much this leaves out – it is not clear yet, for example, how Labour plans to run the NHS – but the economy is the biggest issue and Labour has a plan.
The correct critique is that the plan will take a Miliband government into the territory that has recently been charted by the Hollande administration in France. Elected on a declaration of war with financial services and a pledge to abandon austerity including the loss of public sector jobs, to tax the very wealthy at 75 per cent and to lower the retirement age to 60, the president found in office that he could not redeem his promises. On almost everything he was ostensibly elected to do he has changed course.
The mandate that Miliband should seek is quite different. He needs permission from his own side that he has yet to broach. The crash of 2008 did change everything in one respect. It meant that the immediate political context was one in which there would be no extra money to spend. This is more or less an existential question for the Labour party. It is a question that has barely even been posed.
Right at the beginning of his time as leader, Miliband faced the question of how to conduct a reckoning with Labour’s economic record. The 2008 crash was not the government’s fault and it is propaganda to say it was. It is true, however, that, from 2005 onwards, Labour was spending more money than it had. Based on the hubristic idea that boom and bust had disappeared and fictitious projections of tax revenue from a compliant Treasury, Labour carried on spending. When the cycle turned Britain was slightly less well prepared than it might have been. By refusing to accept this limited truth, Labour has been labelled as incredible on economic policy.
Labour has to fix this. It is too late now to go back into the argument about the crash so it will have to be done by looking forward. There are two things Labour can – indeed must – do in the attempt to restore its credibility.
The first is that it has to make the shadow chancellor’s zero-based review of spending a public process. Labour has to start looking serious about looking after other people’s money. The spending commitments are starting to creep up. You can be sure that the Tory number-crunchers are already adding up the cost of Labour’s promises to make the world better. Fixing inequality does not come cheap, even if Miliband hopes that most of the price will be paid by corporate Britain.
Labour needs to show that it understands that money is tight. This comprehension will only be credible if it is dramatised by some indicative cuts to which Labour is actively committed. Instead, Labour people have vented their public loathing of cuts with such abandon that it felt as if they were enjoying themselves. This would make austerity an argument between the random version of the right and the principled version of the left.
A change in both substance and tone on the cuts needs to be coupled with a commitment to reforming the state which has been conspicuously absent from Labour’s pitch so far. If the opposition were offering any ideas for improved service quality at a lower price, then its aversion to austerity might not have sounded so much like an avoidance of reality. To that extent, Miliband’s recent speech on the NHS, echoing the speeches of his shadow secretary of state for health, was disappointing. It will not be enough simply to repeat a love for the NHS and hope that that will suffice.
The point about public service reform is not that anybody is especially clamouring for it. The point is that, by being serious about improving the productivity of public services, Labour makes a bid to be credible in its custody of the public finances. It would be able to point to the reforms to say: ‘This is how we intend to run the state, to give you the same level of service, more efficiently provided.’
Unless something is done to restore economic credibility, Miliband’s own leadership ratings will stay horribly low. The arithmetic of the next election will be messy but it is asking a lot for the country to elect a prime minister it both does not trust with its money and does not want in Downing Street.
At the moment, the Labour plan stands on four pillars: the universal enforcement of the national minimum wage; the democratic control of industry; a revolution in national finance; and the surplus wealth for the common good. Anyone ready to applaud at this point might reflect on the fact that this is not just a version of Miliband’s Labour. Those four priorities were actually written by Sidney and Beatrice Webb in Labour and the New Social Order, which became the young Labour party’s programme in 1918.
It all feels rather vintage. It also feels rather incredible and unlikely at the moment. Without a restoration of economic credibility there is no way out. The overwhelming reason to conduct a serious review of spending is not because Miliband could win if he does (which is true) but that he could win if he does not. That would be a victory gained under false pretences and the collision with reality would not be pretty.
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Philip Collins is a columnist at the Times
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Join Philip and many more at Progress annual conference, Winning a Mandate for Changes, in central London this Saturday. Sign up for your place here
Is it just a coincidence that EVERY labour administration has left the country in dire straites ?
The problem is with the old fashioned Marxist concept of surplus. it doesn’t make the slightest sense in a modern economy. It’s why the Soviet Union exports only raw materials, oh and arms. In a command economy “surplus” is he difference between the global price of oil and what you pay your enslaved population to pump it out. But in a market economy the serfs have the annoying habit of going to work elsewhere.
Ed of course is the master of Marxist theory but I can’t see his “liquidate the kulaks” policy being embraced by a country whose people choose every week to read the Sun and the Mail. In the end they just won’t believe that Big Ed wil do a better job spending their money for them than they could do on their own.
Whilst there are many good points in the article, it does seem the author suffers from one of the same problems as Miliband, that of underestimating the extent of Labour’s mismanagement of the economy – Britain was not “slightly less prepared” as a consequence of Labour overspend for the 2008 crash, we were completely unprepared. Equally this is not a “limited truth” – but a very strong reason for people not to have faith in Labour’s economic management capabilities.
The pronouncements of Ed Balls in the early years of the current government about how to get out of the mess we are in have also only served to further undermine Labour’s credentials. He has at least gone silent now!
Agreed. One only has to look at Australia which had enough of a surplus to give every taxpayer a refund which stimulated the economy into growth again.
I really think what’s happening (and happened) is that has actually been overplayed by Cameron, Tories and Clegg..remember – they all voted for the economic plan at the time, there was no protest..that Miliband and Labour failed to make the argument afterwards is hardly surprising, people were angry and hurting. Most commentators still don’t ascribe the ultimate blame to Labour economic policy nearly so much as a bloated financial sector run riot and a global bubble bursting – starting in US!
The problem is that it was a Labour government – they would have taken credit if the economy had improved and so cannot share the blame with the opposition when their policies failed. It is true that the trigger for the crash in the UK economy was the global situation and Labour cannot be blamed for that. However they can be blamed for failing to regulate the banks so that banks such as Northern Rock, HBOS etc had massively over extended themselves, not even in casino banking but just in normal bank business. They can also be blamed for running a deficit at a time when they were claiming the economy was doing well – completely at odds with any established economic theory. These are both huge failures for which under any government we would sill be paying the price and can expect to continue so doing for the next few years.
If you are going to talk about money, better get your facts straight first.
“It is true, however, that, from 2005 onwards, Labour was spending more money than it had – “
is only true for current expenditure. If you include capital spending – which is after all still money and therefore has to be funded by taxes of borrowing – debt started rising after the 2002-3 tax year. http://tinyurl.com/k7xtp9o
With a Shadow Chancellor whose track record on the economy is so poor that in private industry he would have been deservedly fired, the Labour Party cannot expect to have any economic credibility. Strangely enough this article does not mention Mr Balls’ abject failure as Shadow Chancellor.. and yet he is key to making a success of a Labour Government.
Anyone who looks at the UK economy and the ageing of the UK population knows that current welfare spending and pensions burden coupled with funding the NHS to cope is not feasible without very significant tax rises. A 2015-20 Government will start to encounter that problem in a major way as those born in the 1945-50 period will be in retirement blocking beds and added to the burden of the NHS..
A party funded by the major trade union supporting producer interests in the NHS is hardly fitted to carry out the major reforms needed. And the current Shadow Health Minister has no credibility in that area having refused to recognise the scale of the NHS’s maltreatment and killing of patients.
So two key jobs are occupied by proven losers in their field.. A guarantee for future failure I would suggest.
Very well reasoned.
Labour is incredible on economic management. History has shown this time and again.
It really isn’t “economic” credibility that Labour lacks, it’s managerial and administrative credibility. Philip Collins writes:-
“The point is that, by being serious about improving the productivity of public services, Labour makes a bid to be credible in its custody of the public finances. It would be able to point to the reforms to say: ‘This is how we intend to run the state, to give you the same level of service, more efficiently provided”
but this requires an attachment to measurement, fact and reality that the Labour Party as a body has never accepted the need to have. In fact, Labour has always shied away from any attempt to run things on the basis of having previously walked through plans on a formal costed and full-consequential basis. There has never been any serious attempt to look at policy from a combined process/outcome point of view. For Labour, it always seems to be one or the other – either enormously expensive, ideologically “sound” processes that don’t really achieve the objectives they seek, but often have far-reaching negative consequences that haven’t been taken into account, or the enforcement of a specific outcome irrespective of the cost of the investment in process that is required to do so, and irrespective of the secondary consequences of the actions taken.
Why can’t Labour focus on identifying areas where things can actually be done better, rather than on projects that can only be made to work in theory, but never in practice?
How typically delusional to read this call for Labour to regain its credibility in economic matters by instituting the usual socialist fantasies of minimum wage, control of industry, revolution in national finance, and surplus wealth for the common good, all of which are the usual problem, not the solution.
Leftist intellectuals, as usual, continue to be surgeons convinced that the cure for the common cold is amputation of the patients head.
Within 2 yrs Hollande & the socialists did not stand a chance in the French 2017 elections
They just do not get that they must live within their means, stop borrowing & wasting other peoples money
Very interesting, thanks. Surely it’s back to those old ‘dividing lines’ Brown was so fond of (and Miliband was around to share the strategy, wasn’t he); but with NHS that’s exactly what is required – differentiation. People are concerned about break up and privatisation of our health services – it also has an advantage of being an emotive issue which is just the sort of thing to help people warm to Ed the man, I think, which we know is sorely needed.