Amid all the soul-searching and data-crunching of the past few weeks, one statistic haunts me more than any other. By a margin of 39 points, people who voted on 7 May said the Conservatives would manage the economy more effectively than Labour. That is not a small gap that might be clawed back with a fair wind in this parliament, it is a chasm between us and the Conservatives. If Labour is to win in 2020, our principal challenge is to restore our reputation as a party that can be trusted to manage the public finances. The lesson of 2015 is that if we fail in this task, everything else (including our 17-point lead as the party trusted to manage the NHS) is immaterial.
We are only a few weeks into our leadership contest, but my fear is that the economy has not had the prominence it deserves. The early consensus seems to be that we should apologise for overspending between 2005-8 and quickly move on. We must resist the temptation to do the latter. Not least because we run the risk of saying something we know voters want to hear, without sounding like we mean it. Instead we need to be categorical; acknowledge that we overspent between 2005-8, apologise unreservedly for running a deficit at a time we should have been running a surplus (as every good Keynesian will tell you) and vow never to repeat the mistake again.
An unambiguous apology for the past will be a start but on its own, it will not nearly be enough. To earn a fresh hearing on the economy, we need a leader who demonstrates as much enthusiasm for clearing the deficit as they do for protecting our public services. To do this, we should abide by a simple principle, to act in opposition as if we were in government. That means no more kneejerk opposition to every cut in public spending, but a more considered and forensic style of opposition, which exposes and fights the most dangerous elements of the Conservative agenda, but does not cry outrage on a daily basis.
Having a responsible and costed plan for cutting the deficit does not mean the Labour party needs to sign up to the totality of George Osborne’s agenda. On the contrary, we need to demonstrate that the public finances can be repaired by making different choices, especially when it comes to universal benefits.
Liz Kendall has said she would drop the policy of lowering tuition fees to £6,000 per year, as it was effectively a subsidy to the middle classes and that the money would be better focused on supporting early years education. I can support that argument, but on the basis that we apply the same standards to all areas of policy. Take winter fuel payments, an ineffectual, costly and badly targeted scheme. Abolishing it would save billions, some which can be used to make sure we protect people in fuel poverty, the rest towards deficit reduction. End the anomaly which allows over-65s who are in work to not pay national insurance and raise £2bn per year. Restore the link between free prescriptions and the retirement age (not 60 as it currently is) and raise £1.6bn in the parliament. These are just a few examples, all courtesy of excellent papers from the Intergenerational Foundation – there are countless more out there.
It will take courage to challenge the principle of universality in our welfare state, but to rebuild our reputation as a party that can be trusted with the public finances, there can be no issue cast into the, ‘too difficult’ box. Only if we are candid about the scale of the challenge can we set the Labour party on a trajectory to eliminate that 39-point gap on economic competence and stand ready to win again in 2020.
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Whether the level of revenue spending between 2005-2008 is something to apologise for is a matter of judgement. Conservatives generally prefer to spend less and do less, though they rarely admit to the latter. Labour generally prefers to do more and if necessary spend more. I, for one, am not ashamed of saying we should do more than the Tories and if necessary spend more to do so. If we are down to debating spending in a small 3- year period of Labour’s 13 years, it makes a mockery of how the Tories meanwhile have by economic mismanagement allowed the economic growth they inherited to stall and then stutter, so costing the nation billions in benefits to support people needlessly unemployed or under-employed. We should hammer home how under this last 5 years the UK National Debt rose by one-half having taken 300 years to get to the 2010 starting point.
I suggest you read the article in Left Foot Forward today. The political ineptitude of the Labour leadership in allowing the Tories to set the narrative of “Labour’s mess” was astounding and it would be virtual political suicide to say, in effect, that they were right all along, Labour can’t be trusted with the economy. The damage caused by letting the Tories to get away with the big lie will not be repaired by going along with the myth that they created but by the development of clear, confident policies to deal with the crisis of turbo-capitalism.
Spot on.
Labout did not over spend. It was making up for 30 years of under-investment in schools, hospitals, roads, railways etc. Without addressing this massive back-log we would have had crumbling infrastructure and services. It is difficult to have counter-cyclical cuts when we have had 30 years of counter-cyclical cuts. And don’t forget that moving into 2008 Gordon Brown was already making moves to cut public expenditure in order to build up a surplus ready for the next down-turn – Government Departments and Agencies were being warned that spending would not continue at the then current levels.
Labour’s mistake was to believe that the financial and banking system was being run by competent and honest people. People who were not betting just the bank but the whole economy on schemes which they did not understand; people who were not lying to and ripping off their customers; people who were more concerned with making large bonuses than providing a service which was useful to their customers. It is this blind belief in the banks and ‘masters of the universe’ (and the use of neo-liberal fudges such as expensive PFI schemes) which Labour needs to apologise about – not investing in fixing the roof whilst the sun was shining, which is what it did quite literally (remember all those leaking school and operating theatre roofs under Thatcher and Major?).
If YOU think Labour underspent – which schools and hospitals would YOU not have spent money on. Which rail-routes would you not have modernised? Which universities would you not have expanded?
I’m appalled by the message of the article. We had a case. We didn’t make it. If we carry on not making it, then we’re asking for the Great Crash Lie to become our Winter Of Discontent issue…..hanging over us for a generation.
We made the same mistake in not standing up for ourselves in 2010. If you know anyone who says that we didn’t defend our record in government, please refer them to the following?
If you want to see an analysis of the results of years of Tory lack of spending on our services and infrastructure…..and what we did to turn all that round……..search for ONE CONSTITUENCY, TWO GOVERNMENTS. It was written for the 2010 Election. The Intro was slightly amended to fit it into to 2015, which makes it a bit clumsy.
Accepting the big lie is imoral and will come back to bite anyone who accepts lies as truth.
As others here are saying our time is better spent pointing out in unmistakable language the Tory lies; their incompetance at borrowing more in 5 years than Labour did in 13; that growth from a low base (caused by an economic scorched earth policy) is both easy and nothing to boast about; than the sluggish economic growth there is has only happened because austerity was eased off without any fanfare (just as Thatcher did); that in the last 5 years the UK National Debt
rose by one-half; that the low productivity puzzle is answered by accepting that the unemployment and employment numbers are a lie (which is why the Bank of England is not worried about wage inflation). And repeating that Cameron and Osborne said they would match Labour’s spending plans Pound for Pound, but would not have balied the banks out thus ensuring that everyone in the UK would have not been able to get access to their wages and pay their bills, or pay for their shopping.
And read this for a more detailed explanation of why, and how, the Tories got away with the lie about ‘it was all Labour’s fault’:
http://mainlymacro.blogspot.co.uk/2015/05/recognising-success-of-macroeconomic.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed:+MainlyMacro+%28mainly+macro%29
This article has nothing to offer the Party. It just high-lights the failure of Gordon Brown and the leadership that replaced him (and will replace Ed Miliband) to argue the economic arguments. This 4 years of silence was a disaster – not challenged by anyone in the shadow cabinet. When did an apology ever achieve anything? We apologised over immigration (a big mistake) rather than setting out the realities of the world. When Cameron massively missed his immigration pledge did he whine and apologise? When he only halved the deficit did he apologise? Not a chance. The massive cuts of Tory austerity flat-lined the economy for 3 years – until they quietly realised they were disastrous and took their foot of the brake. Now they propose another 3 years of cuts that will again hit growth – the only real solution to the deficit. The SNP, PC and the Greens are right – austerity must end now. That doesn’t mean spending like there is no tomorrow – but certainly no £12bn cuts. I am amazed that Labour can sign up to HS2, replacing Trident and building stupid huge aircraft carriers – but not commit to spend big money on social housing for rent. Housing that would meet a desperate need, and drive down or slow the rise in rents (and perhaps property prices). I am not sure about paying NI over the age of 65. Why tax working pensioners by 11% extra if they have paid their maximum contributions (or is this for people who haven’t?) Why not make the self employed pay more than £2.80 per week towards their state pension and the NHS? That’s a piss-take. Most self-employment is now bogus – allowing business to dodge their NI contributions. (Another form of zero hours contracts.) Why not just extend NI above its upper limit – a limit which practically cancels the impact of the increase to the 40% Income Tax level for the better off? If we are going to reject cutting tuition fees as a subsidy to the middle classes, why not means-test free child care, rather than extending it. Isn’t that a similar subsidy – much bigger than universal child benefit? If you want to be stupid perhaps we should extend the Bedroom Tax to pensioners – the main under-occupiers of council housing? And remove the council tax benefit protection for pensioners? Don’t just throw a few selected issues into the pot because they suit one candidate, if you want to seriously discuss issues of universal benefits.
Are we really saying that because Blair and Brown built hospitals and schools that is what caused Lehman Brothers to crash? We lost the debate on the economy because when we had Cameron and Osborne on the ropes with the Cornish Pasty Budget Ed M and Ed B had them by the throat but did not have the guts to squeeze. Osborne learned from his mistakes, we didn’t. We have to realise one thing. Brown reduced the national deficit for most of his period in office. It was only when he decided, rightly, to bail out the banks that public expenditure went through the roof. What we should be planning for is getting the Tories to apologise for depressing wages and growing inequality which will be massively apparent when we get to 2020.
Barry K
I am heartened by the comments with which I mainly agree.
Implicitly, the article is attacking old, retired people. How stupid is that?! Is the author yet another aspiring Career Politician? They seem to view “old” people with contempt (perhaps envy?).
I said at a Progress conference last year that policies ought to be directed towards the Grey Vote, as they are more likely to vote than any other age group. Of course, my comments were ignored by the platform of mainly bushy tailed, bright eyed, young “experts.” However, was it the Grey Vote that brought about Labour’s rout?
Miliband surrounded himself with other Career Politicians. At Labour’s conference, I used to see him swan into a reception with his entourage of “children.” What “Bright Young Thing” came up
with the stupid, childish idea of the Ed Stone? And, no doubt, cheered on by other happy, clappy members of the “In Crowd.”
When I became active in politics some 20 years ago, after early retirement from lecturing, I was astonished that young graduates dominated “Think Tanks,” NGOs, etc. Many are promoted beyond their years and have little (if any) REAL “shop floor” experience of the area/organisation
they head up, as do many ministers (or their Shadows). Advisors and policy makers need maturity and to have direct, in-depth experience of their “subject.” Wisdom does come with age, but also experience. PhDs and degrees in Humanities are a foundation, not an end in the “University of Life.” Many of the problems we are now faced with were predicted by many of us in the Grey Vote. We had seen it all before. We questioned, for example, how sustainable it was for people to get mortgages of six times income when the norm, in our day, was three times
wages/salary? We could see PFIs, PPPs would have long term disastrous consequences. Yet, all our protestations were poo pooed and swept aside by our young, career politicians.
God help us if we get a Career Politician leader of the Labour Party!