Growth is like sex: everyone is in favour of it, but no one is entirely sure how you go about getting any. And while George Osborne might be like someone who buys a copy of Neil Strauss’ misogynistic self-help book The Game – he doesn’t have a plan, and he’s a bit of a jerk – all too many Labour people are still hung up on 90s dating guide The Rules – something which made sense a long time ago, but no longer stacks up.
Labour’s overused paperback is Ed Balls’ Bloomberg speech. It was a fantastic, cogent speech: one of the most serious and scholarly contributions to the economic policy debate since the crisis by an elected politician. It transformed Balls’ reputation within the party and gave Labour a heft beyond ‘too far, too fast’. But it was fundamentally a speech about 2010, not 2015.
Balls, to his credit, knows that: that’s why he himself has moved away from many of the positions he adopted at Bloomberg. The trouble is, most of the Labour party hasn’t got the memo. Owen Jones was at it this weekend in the Independent, calling the speech ‘a founding document of British neo-Keynesianism’. The piece reflects a wider delusion on the left: that by winning in 2015, we will be able to go back to 2010. But the economic choice that Balls laid out is no longer available: in 2010, there were the fragile beginnings of a recovery and the first green shoots were starting to appear. In 2015, we’ll have had five years of stagnant wages, and falling unemployment figures conjured up by zero hour contracts and part-time positions. During the Labour leadership, David Miliband described the position Britain will be stuck in, ‘chasing its own tail’ on growth.
Frankly and simply, if Labour was so keen to make the Bloomberg speech the foundation of economic policy after 2010, it should have tried harder to win the 2010 election, rather than shuffling towards the most evitable of losses. But it didn’t, and defeats have consequences: namely, a far worse inheritance in 2015 than the coalition had in 2010. Labour now it has to accept that it must make policy based on 2015, not on the world it could have made.
How might Labour get growth in 2015? Labour must accept, as Steve van Riel puts it, the awful things we will have to ask of ‘people we like’. Worse still, Labour has to concede that many of the policies and directions Labour will take in 2015 will have to help people we don’t like. It is now too late to speak of a genuinely public bank, lending to small business and virtuous capitalists, because what Labour will inherit will not be a viable nationalised bank but the last few, largely toxic assets. A growth strategy in 2015 will mean things that will make many Labour people uncomfortable: from national insurance holidays for new employers, to tax breaks for corporations: and all of these things will have to be paid for by making cuts to things that Labour actually does like.
That’s not to say that a Labour growth strategy will solely about unleashing private sector growth: Labour should free local councils and communities to be more engaged with the private sector at a local level: from allowing local councils to set up credit unions and microfinance initiatives, to lend to businesses and to help shut out payday loan companies, to increasing the role of mutuals and social enterprise. But it means, above all, a willingness to live in the difficult spring of 2015, not the forgotten summer of 2010.
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Stephen Bush writes a weekly column for Progress, the Tuesday review, and tweets @stephenkb
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