Labour must start to make its case on the economy, says Nick McDonald

The leadership contest offers the chance for a debate about the future of our party. That debate is important; it will define us for the next decade. But whilst we must reformulate what it means to be a progressive party, and be seen to do so, debate will not win us the next election.

To do that we have to convince the electorate once again, not that we are progressive, but that we are trustworthy and that we have the right economic polices. Moreover, we must persuade the public that the economic decisions the Coalition Government is now taking will be disastrous for this country in the long-term. That is largely how Labour won power in 1997 and it is how we will win again. It is natural and necessary that we turn inwards after defeat and re-evaluate what the Labour Party stands for, but let’s not equivocate too long; we need to get back at them, and soon.

The party that develops the best lexicon to explain its economic position will win the next election. Voters do not necessarily care that cancelling the Future Jobs Fund is simply wrong, or that cancelling school building projects, or transport projects, is wrong. However, they will care if they believe that cuts will harm growth, or remove confidence, or adversely affect the housing market.

These are not nebulous concepts. They affect the lifestyles of each and every one of us. The growing number of unemployed face a tough time over the next few years, and the public sector employees that remain in employment are in for a torrid time as well. Even in the private sector, growth and confidence affect how busy businesses are, whether they take on or shed more staff, whether there will be a pay rise this year or a pay freeze. The Government’s devastating program of cuts will affect every one of us to some degree, though inevitably the poor will suffer the most.

This should be an argument we can win, yet the signs are that the Coalition is already winning. Anyone who has been on the doorsteps since the election will know that Labour is already blamed for wrecking the country’s finances. None of the blame for the hardship the Budget will cause is directed at Cameron and his cronies.

It is all targeted at Labour. We know that Labour did not cause the economic collapse of 2008, that it was global and that it had its roots in a variety of things, from unsustainable lending practices to rising oil prices. We know that without the rescue package put together for the banks, championed by Brown, global finance markets faced economic armageddon at that time. We also know that Labour’s policy of investing to lift the economy out of recession was one adopted worldwide, not least in the US. However, that explanation is complex, and complex explanations do not persuade voters.

We must quickly work out how to turn that explanation into a simple, cogent and powerful message and drive it home, from now until the day of the next general election. Both Sunny Hundal and Pat McFadden have argued this point, although from different directions.

The Coalition has their argument nailed down, and it is simple: Labour left the cupboards bare; Labour bankrupted the country; now we have to cut. It is appealing. It is also wrong. Deficit reduction is not debt reduction; in broad terms it is about ensuring that what comes in exceeds what goes out. Cuts may reduce what goes out in some respects, but they increase it in others (an obvious example being unemployment benefit). Consequently they also reduce what comes in (after all, the unemployed don’t pay tax).

Make no mistake, deficit reduction is achievable through drastic cuts, but only at the great expense of dramatically eroding the quality of public services and creating in our society, once again, an underclass that has no prospects and no support. That doesn’t matter so much to the Coalition, their voters will be less seriously affected, but it should matter to us.

It means we must win the next election and reverse the damage before it creates another generation of social and educational failure. But to do that we have to get our message nailed down too, and the only message worth selling to the electorate is the economic message. We must make the argument that we got the economic management of the global recession right, and that the Coalition are getting it wrong.

The key argument must be to explain that the Coalition government’s policies will reduce the deficit (as it did in Canada, though the analogy with Canada is deeply flawed), but that it is not the only way to do it and that this method will leave us weaker, less supported, less well looked after, less educated, less employed, and less competitive. We must start to persuade people again that a fair society is a richer society and consequently a nicer society to live in. We must do it well and we must do it now.

There is an appetite amongst the electorate for prudence. Therefore, screaming and shouting about the inherent unfairness of the Tory/LibDem cuts, as Labour politicians seem currently to be doing, is – whilst understandable – bad politics. In many ways, it simply reinforces the Coalition argument that Labour are incapable of taking a prudent approach to economic management. Good politics would be to find a way of explaining why that unfairness will further damage the economy and will therefore damage us all, rich or poor.

We have to do that effectively and we have to do it now, before attitudes harden. It is, as Bill Clinton once put it, all about the economy stupid. What would be really stupid would be to allow the Coalition to win an economic argument upon which it is fundamentally wrong before we’ve even started to make our case. Once voters formulate a view on the economic performance of Labour in Government, and of the present Government, it will stick. In the same way that Thatcher ruthlessly exploited the complex, global economic difficulties of the late 1970’s to present an image of Labour as an incompetent bunch of spendthrifts with no control over the Unions, the Coalition now has the opportunity to re-brand New Labour as the party that lost control of the economy and drove it to bankruptcy.

Cameron and Osborne understand this acutely, and the presentation of the Budget was a master-class in how to manage bad news and take control of the media agenda. Incoming governments always blame their predecessors, but this Coalition government has an unusually clear strategy of destroying Labour’s reputation and using it as the fall guy for the pain inflicted by its own policies. So far, it has succeeded and at the moment Labour has no credible response.

Nick McDonald is a Labour activist and lawyer. He is on Twitter.

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2 Responses to “Labour must start to make its case on the economy, says Nick McDonald”

  1. […] This post was mentioned on Twitter by mark hancock, Labour Uncut. Labour Uncut said: Labour must start to make its case on the economy, says @Nik_McD #labour […]

  2. So far, so boilerplate. But you’re missing a trick here. Drastic cuts won’t necessarily reduce the deficit. They haven’t in Ireland.

    The message is much simpler – cut too hard and you make it worse. It’s Labour’s scalpel or the coalition’s chainsaw. Which one would you rather the surgeon used?

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