Oldham win lifts Labour out of relegation zone

by Atul Hatwal

It’s a tough stage of the season in both football and politics. The threat of relegation stalks struggling teams. Managers are desperate for some breathing space. Only one thing can help: a win. Every game is like a cup final.

Last night Ed Miliband lifted the coveted Oldham East and Saddleworth cup. For once, the morning’s newspapers provide decent reading for Labour. There will be no need for hastily arranged media interviews to stamp on rumours about losing the dressing room. Victory has bought the Labour leadership time.

The question is: how will they use it?

Learning from a win can be difficult. The temptation is to take it as a vindication of all that has gone before. But booking the open-top bus would be premature. There is plenty of cause for caution.

Recent polls paint a picture of an electorate that has not changed its mind on the fundamentals since the election. 40% of people think that the cuts are Labour’s fault. 52% think that they are necessary.

The most relevant polling is on the impact of the cuts. 51% believe the cuts will only affect their family’s income a little and 16% not at all. 63% do not think their job is at risk.

Two-thirds of the electorate think that it’s all going to be ok.

Nor is this just wishful thinking. The majority of people do not work in the public sector. Most will keep their jobs. And they face historically low mortgage rates. Lord Young was a fool for saying it in an interview, but there is an underlying truth there.

The only way the cuts will not be bearable is if they cause another recession that tips Britain into the pen with the so-called PIGS: Portugal, Ireland, Greece and Spain.

Each of these countries has been convulsed by general strikes and unrest. But spending here is being reduced by 19%, compared to cuts exceeding 40% in those countries. Gambling on that level of upheaval in Britain puts Labour’s political strategy on a par with that of the Socialist Workers party.

When the economy does not implode, but improves (or at least does not get worse), the electoral exam question will be simple: “Who was tough enough on spending to fix the problem, Labour or the Conservatives”?

Limping along saying that Labour will cut less and more slowly is a mini-me line that offers no alternative. Protesting that the spending wasn’t Labour’s fault and was caused by the recession will not wash either. The public passed judgement at the last election.

It doesn’t have to be this way.

The space created by winning Oldham East and Saddleworth should be used to neutralise the deficit as an issue and move the debate onto new ground.

Much of the current Labour leadership were senior advisers in the 1990s. They were part of an opposition machine that minced the Tories. They saw first hand what worked.

Success was based on two simple rules:

First, the opposition sticks to the government’s spending plans. Period.

The logic behind this rule was that back then we were suffering from a lack of credibility. We were in opposition because voters had already made a deliberate choice to reject us.

It is as true today as it was in 1994. 38% of the public think George Osborne is the right choice for chancellor, compared to 28% who would prefer Alan Johnson. Even in Oldham East and Saddleworth, voters had more confidence in the government. 37% prefered Cameron, Clegg and Osborne to manage the economy, compared to 22% for Miliband and Johnson.
Committing to the government’s spending plans would let Labour move on from deficit reduction. It does not mean that we cannot oppose cuts or tax rises. In the 1990s, the party hammered the phrase “twenty-two Tory tax rises” into the public’s consciousness. But we did not commit to reversing a single one of them.

And as to the substance, going with the same overall spending plans is not wildly different to the current policy. Labour’s current line might be “too far, too fast”, but both Labour and Tories are committed to removing the structural deficit. The policy reality is that Labour is not saying “too far”, just “too fast”.

Second, define the difference by taxing the bad minority to fund the good majority.

Once the spending flank is covered, Labour can draw some new dividing lines.

Last time in opposition, the party targeted the utilities with a windfall tax to fund the new deal for the young unemployed. Today, there is an embarrassment of potential funding sources. An extension to the bonus tax is already on the table. Another windfall tax on utilities is a possibility, as is a mansion tax on the property empires of billionaires.

The key is that these funds are ring-fenced, so that people understand exactly where the money is going, and that they clearly benefit the squeezed middle, NEETs, Worcester woman or whatever is the preferred demographic du jour.

The weak point in the Tory narrative has always been that “we’re all in this together”. Targeting privileged wealth to fund popular programmes would help define a new central question in the economic debate. It would replace “who can cut the deficit” with “whose side are you on”?

These two rules were the basis of what New Labour achieved in opposition.  Without the first, Labour would have been pilloried as anti-aspiration tax and spenders. It shored up the defence. Without the second, there would have been nothing to differentiate Labour from the Tories. It set the pattern for attack, and gave balance and bite to the most effective opposition since the war.

At the moment, Labour is trapped on the side of the vocal minority. And it looks like it’s not serious about the deficit. The majority of the public is on the other side and, barring economic collapse, is likely to stay there.

Oldham East and Saddleworth offers the opportunity to change course.

But unless the party can remember lessons from its past, the chance will be missed. One-off victories like last night boost morale. But, like winning the league, winning the general election is a longer haul. Without a fundamental shift in strategy, last night’s joy will soon recede into what will become a long and disappointing season.

The choices that we make in the coming days and weeks are critical. Labour’s electoral fate is still in its own hands. The management can still turn things around. But they don’t have long to do it.

Atul Hatwal worked at Labour HQ on the 1997 general election.


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23 Responses to “Oldham win lifts Labour out of relegation zone”

  1. The Photon says:

    A fascinating post that was a delight to come across this ‘good’ morning. My only regret is that Ed is so slow to pick up the reins of leaderhsip – he still looks like a rabbit caught in a car’s headlights every time he tries to look big.

  2. Phil Ruse says:

    “The majority of people do not work in the public sector. Most will keep their jobs.”

    I’d qualify that with many in the private sector were already feeling the pain a year ago – whilst the public sector was inexplicably still growing.

  3. David Clark says:

    It’s and interesting and intelligently argued case, Atul, but I want to make a few counterpoints.

    1) The polls present a more mixed picture than you allow. They show that the public think the cuts are necessary and inevitable, but unfair and taking place too quickly. Labour can agree with all of this. The stronger case is that none of this will matter in four years because Britain will be in a different place. The balance of probability is that we won’t return to a technical recession and we have to factor that in. In any case, it would be a mistake to base our strategy on any particular economic outcome because even economists don’t know what’s going to happen.

    2) You probably over-dramatise the importance of what is said at this stage in the Parliament. After all, Cameron and Osborne backed Labour’s spending plans until 2009 and then switched track. Labour is having real problems convincing anyone that it matters. Provided Labour is canny enough in what it says, it will have room to adapt to changing economic circumstances.

    3) I think there is more to winning the next election than mechanically applying the lessons of the past. If I may borrow the football analogy, your strategy reads like a kind of Route 1 Blairism. There are swing moments in history, like the late 1970s, when the basis on which politics is conducted changes. I think we are at one of those moments. I don’t pretend to know all the implications, but you must at least acknowledge that something has changed because of the crash.

    4) The big strategic debate that will define the shape of politics in the era ahead is whether you think the crisis was caused by profligate government or unregulated markets. If we unconditionally accept Cameron’s narrative, we risk closing down our options in office for a generation. This is where I depart from your football analogy. In football, winning is the end. In politics, winning is the means to the end. Some Labour people might settle for a trophy government, but I want one that does something.

  4. Spot on – the condtons which brought about a 29% vote share last year haven’t fundamentally altered. People blame Labour for the deficit and at the moment for the cuts. When they really start to bite, it may be a different matter, but too many 30- and 40-somethings on the left seem to want to refight the battles of the 1980s, presumably out of some sort of misplaced nostalgia for an era in which, let’s not forget, Labour was losing election after election (but doing rather well in opinion polls and by-elections iirc).

  5. Yet more from the school of ‘I haven’t bought a new calendar since 1997’, right down to the unnecessary football analogy.

    Accepting the Tory cuts plans is not a sensible option, especially when they’re becoming less popular by the month. The lesson of New Labour is not always swing to the right, it’s pay attention to what people are saying. And 57% say they think the cuts are being carried out unfairly. In addition, a U-turn on our attitude to the cuts is not feasible when we’ve been attacking them for six months – if the frontbench reverse in the way that you argue, they’ll be mercilessly pilloried for it by all sections of the press.

    What’s more, the numbers on Miliband are fluid, as he hasn’t defined himself, whereas for the numbers of Johnson the problem is as much his own lack of confidence in his brief as views of the government’s economic plans.

    Moreover, we need to consider that alongside the usual Labour-Tory swing voters, half to two-thirds of former Lib Dems up for grabs – and in most constituencies in the country that equates to at 10% of the electorate. These are anti-Tory and anti-cuts voters. If we hug the Tories and the cuts close, we lose them, most likely to the Greens. It is not in the long term interest of the Labour Party to have a Green Party consistently polling upwards of 5%. (And as a side note, as cuts hit working-class Labour areas hardest, the other party that could benefit from protest votes, albeit from a different group of voters, is the BNP. The last thing we need to do is pull those bankrupt cretins back from the brink of extinction.)

    Then there’s the fact that Labour are committed to removing half of the deficit over the course of this parliament, rather than all of it. Your failure to notice this fairly elementary distinction between us and the coalition suggests you don’t really have a clear handle on the economics of this, which suggests you aren’t qualified to pontificate on our cuts strategy.

    The stupidest bit of this, however, is this: “Nor is this just wishful thinking. The majority of people do not work in the public sector. Most will keep their jobs.”

    Let’s consider that consensus estimates suggest that around half a million may lose their jobs in the private sector as a result of supply chain failures or the general slowdown putting public sector workers out of work will cause. Then let’s consider that unemployment is worst amongst the young, so even quite middle-class voters will know somebody unemployed, amongst either their own children or those of their contemporaries. Then let’s consider the social costs of unemployment and the economic costs of paying benefits to the unemployed.

    Bring all these things together, and it’s clear that we can make an argument that the problem with the Tories is they don’t care about unemployment. Indeed, it’s arguable that we have to make the case, or we’ll be damned as being all the same.

    And this is before we get on to the elementary fact that if we agree to the cuts then the Tories will just announce more…

    No, it’s not alright now. We have to make changes, including probably endorsing a few more cuts. And it’s certainly right that we can’t just hope for a bondholder’s strike. But your prescription is ridiculous.

  6. Atul Hatwal says:

    Dave,

    I see what you’re saying, but, and there would be a but:

    On 1 – The polls do give a mixed picture, but the questions that matter focus on how deeply people think that the cuts will impact them. On this, the one poll which asked these questions – ICM back in October – gave clear answers. Most folk think its going to be alright. Perception of the cuts can be unfair and too fast, but if they don’t make much difference to you personally then there is little real cost. The public’s position is basically: the deficit has to be tackled and cuts that affect others are a lot better than higher taxes which will hit me.

    On 2 – I’d say part of Labour’s problem with being relevant is that till the deficit question is answered, it’s difficult to get beyond square one. Everything the party says has an automatic discount placed on it because we haven’t faced up to what is seen as our responsibilty on debt

    On 3 – It’s not so much route 1 as the basics. We’ve got to build from the back. Plug the deficit shaped hole in defence and then go on the attack. We can wish things were different and the total football of the new politics was enough, but without a solid back line, nothing is going to work.

    On 4 – I certainly wouldn’t say we should accept Cameron’s narrative as the basis for a prospective Labour programme in government. There’s the process of getting to government – part of which involves accepting their deficit schedule, that’s one thing. But during this process there are the specific programmes which can be used differentiate, for instance like using the proceeds of the bonus tax to fund an infrastructure programme that will provide a fiscal stimulus. And then after the term of their spending plans are complete, its up to Labour do decide levels of expenditure.

    The problem last time was that Blair became much more right wing the longer he spent in office. This doesn’t detract from the practicalities of getting to office, it just relies on the leadership making the right choices once there. Big assumption, I know.

    Atul

  7. Well said by the way Edward Carlsson Browne, with analysis like yours at least I leave this page a little reassured.

    I think people like Atul are tending to go for the full on navel gazing experience.

    The way Atul talks about what strategy we should have for these cuts and the football analogy suggests you think these cuts are a game, perhaps they are not affecting you – yet?

    Let me explain that these cuts are already having a detrimental affect on people and their lives, they are not just affecting public sector workers, but they are also affecting the construction sector, which is just one month’s figures away from being officially in recession and the service sector, just two months more below 50% and they will officially be in recession too.
    Public sector workers losing their jobs will not just affect public sector workers and their families, the knock-on effect from that is colossal and this in turn will put further strains on the private sector.
    These cuts are not a game, labour should oppose them for the right reasons and not because they think they will win them votes.

    These cuts are wrong, they are politically motivated and ideological and the opinion polls are actually beginning to show this, this opinion will not just magically change over night, it will take time, but it will change. If this government is not stopped then this time next year this country will be in serious trouble and I have seen it all before, I lived through the 80’s and 90’s and I saw what it did to people and to write people off who want to make the comparison is making a huge mistake and then there is the matter of the NHS, which is going to hold serious implications for people.

    Yes labour need to start winning the argument about the deficit and who’s fault it was we built up this deficit. The National Executive did not exactly help here by having that ridiculously lengthy, tedious and unnecessarily long leadership contest, it allowed the Tories and their poodles to firmly lay the blame firmly at labour’s door, this Tory led government were allowed to go on virtually unchallenged, totally and utterly foolhardy. However, we are where we are and it is this we need to work on and undo. Inevitably in the end the public themselves will just go tired of hearing the Tories and the Lib Dems repeatedly blaming labour, that argument has a very short shelf life and there are signs that this is now beginning to happen.

    I think the tendency is to over analyse the situation and honestly some people cannot see the woods for the trees and are over complicating what is basically very simple. The cuts are ideological, they are going too far, too deep, and too fast and people are recognising this. it is this we need to concentrate on.

    We do not need to present a strategy at the moment and we should resist the temptation to do it, it is too early, but we should have one prepared in case this government is brought down early and I think the likelihood of this happening is very real.

    Also Atul you complete ignore where the labour party were in the polls just 8 months ago. It took many years for the Tories to get to this position and labour have managed to do it in 8 months, so they must be getting something right.

    The cuts are wrong, if labour were to suddenly back the Tories and the cuts, not only would they lose all the new support they have picked up from the Liberal Democrats, they would be guilty of selling their own core vote down the river, exactly what Clegg has done and it would be labour in the polls at 10%. They would definitely lose my support and I have been a laboour supporter all of my life.

    Quite honestly I have trouble understanding the motives behind your article.

  8. William says:

    1.Own up to the disaster that was Gordon Brown.Fessing up gives hope of future credibility.2.Try and make the party look and be less Scottish.3.Work out some new policies on health and education that do NOT involve ‘Whitehall knows best’.4.Announce an intended foreign policy that will not put us in thrall either to the US (militarily)or the EU (budget contribution), ie Britain comes first.5.Work on a new tax policy framework that exempts the bottom 20 percent from income tax and NI. 6.Learn to live with the state spending no more than 40 percent of GDP.7.Try and be nice to the English.8. Do not oppose for it’s own sake.9. Avoid being seen as the unions’ puppet this spring.10.Take your time over policy.

  9. Atul, some good insights here. Just wanted to pick you up on one point – although we could be tipped into recession/slump by too quick cuts, bear in mind that the PIGS are different from the UK in two important ways: 1. they are in the Euro, which has internal stresses we do not suffer from, and is vulnerable as a result, and 2. partly of a result of this and partly as a result of economic mismanagement, their sovereign debt is vulnerable because their credit rating is low. We don’t suffer from either of these problems, therefore our chances of going down the same apocalyptic route are slim. We could be in for a nasty prolonged recession, though.

  10. Jim says:

    Interesting article. However, accepting the Tories spending plans now would seem a little hasty, the bite of the cuts is yet to come and it will affect public AND private sector. The public sector cuts hit the private sector more than you give credit (fewer council contracts for private firms, less disposable income in places with a – up to now – large public sector, more competition in a restricting job market etc)

    The beauty of being in opposition in the first year of a new government is that you don’t have to have the answers. In 5 years time, no one is going to remember the opposition being vague at the start, if you support a course of action that hits people hard, you can’t deny that later and the Tories WILL bring it up.

    People will make their decisions based on their situation on polling day at the general election, why link yourself with such a risky action?

  11. David Clark says:

    Atul says:

    “We’ve got to build from the back. Plug the deficit shaped hole in defence and then go on the attack. We can wish things were different and the total football of the new politics was enough, but without a solid back line, nothing is going to work.”

    The problem with catenaccio is that it usually ends in a dreary goalless draw. We should aspire to more than the political equivalent.

  12. AnneJGP says:

    An interesting article, Atul, thank you.

    My biggest fear for Labour was that the polls would become favourable too soon, rendering the party deaf to necessary lessons. Seems to me my fear has been realised – witness Gracie’s comment above (“Also Atul you complete ignore where the labour party were in the polls just 8 months ago. It took many years for the Tories to get to this position and labour have managed to do it in 8 months, so they must be getting something right.”).

  13. Edward Carlsson Browne says:

    Atul, correction to your response to David’s point 1:

    There’s been more polling since then. YouGov has 72% thinking they’ll be affected by the cuts. No information by how much they think they’ll be affected, but it’s a significant number nevertheless. And the trend is clear. http://ukpollingreport.co.uk/blog/archives/2945

    So whilst your analysis might have been superficially correct, if short-sighted, three months ago, these days it looks like a bad move to make. If you want a fiscal rectitude strategy, try something about how much of the spending we’ll eventually restore and when.

  14. Blobfish says:

    A very interesting strategic perspective. I’m not sure I agree with it ideologically, however, I know better than to let my feelings get in the way of successful politicking. And successful politicking is the aim of the game after all. Without that success you’re just having a ranting into the abyss.

    I strongly agree with the underlying principle that the deficit is the centre of the electoral mass. If cuts are the way to cure the deficit then cuts are necessary. The Tories were offering cuts and the swingers in the middle voted for the cut-making Tories. As such, reversing the opinion that the now Government are not to blame for having to make the cuts and that their cuts will be more precise and managed successfully is a sound political strategy.

    I also agree with your implicit assumption that the majority of Britons are effectively indifferent to cuts. The UK workforce is approximately 4:1 private/public or 78% in none-public sector employment. Many of them have been suffering under the market-caused pressures of recession for nearly three years now. Twenty per cent cuts, spread across the wide realm of public sector expenditure, over five years will have no to marginal effect on most as self-interested individuals.

    It is a statistical minority of the electorate that will be properly adversely affected – which isn’t to say that affect isn’t devastating for them but it is to say that it doesn’t matter enough for the statistical majority to care – and therefore change their electoral preferences.

    I am surprised to see such an emotional response from a couple of contributors. Atul’s argument is about political strategy not ideology or economics. It does best not to confuse the three. One is about changing the narrative that defines people’s underlying voting assumptions; the next is a belief system and the third usually about applying that belief system to the management of the country’s finances.
    Edward Carlsson Browne and Gracie Samuels both seem very upset with you! Without wanting them to be upset with me, I don’t think they understand that your argument is about strategy not ideology.

    They equate you suggesting Labour strategically stick to Tory cuts to change the central question that influences voters, with you agreeing with the level and placement of Conservative government cuts. What you are saying is that the electorate want the cuts because they have bought into the Tory narrative that cuts are the best thing for the economy and, that within themselves that same electorate who have voted for the cuts do not believe they will be particularly affected by those cuts.

    These voters are the voters that change election results, not the 30% who vote Labour whatever the party line or the 30% who vote Conservative and who would have voted for cuts even if the deficit had been half what it was in May 2010. Your point is that Labour strategy is wrong. As I said, I’m not sure you’re right but your argument is sound and politically excellent and on that basis neither find you ridiculous nor struggle with your motivation for writing the argument and I think you’re very well qualified to pontificate!

    On a final point, thank you Mr Clarke, you bought up something that has been making me laugh internally for weeks. Namely, the idea that there’s a generally held belief that cuts are necessary and inevitable but unfair and taking place too quickly! It’s very easy to hold that opinion; you can win both sides of an argument with yourself at the same time and then pat yourself on the back for being prudential and sensible while also being caring and considerate. What is the alternative?

    Perhaps we should make these necessary and inevitable cuts but uquitably and slowly, so that over time, they actually become spending?

  15. Tom Miller says:

    By ‘relegation zone’ did you mean ‘8 points ahead in the polls’?

  16. Tom Miller says:

    I know we have spent some time under Gordon and it didn’t work out great, but it’s wrong of us to carry on being depressed even when we’re doing well.

  17. Swinging voter says:

    “These cuts are wrong, they are politically motivated and ideological”.

    That may be, but isn’t Atul saying that by agreeing that cuts are necessary and disagreeing only on the pace, Labour is adopting a fatally flawed strategy?

    I tend to agree with him.

  18. Edward Carlsson Browne says:

    Blobfish – I’m not upset. I just think it’s a stupid move – our voters and our likely voters are more sensitive to cuts and in any case the polling doesn’t actually support Atul’s argument – most people expect the cuts to hurt them.

    I’m fine with prioritising strategy over ideology, provided we don’t forget ideology. What I object to is bad strategy, and this is pretty terrible to my eyes.

  19. William says:

    11.Ignore opinion polls, the only poll that counts is the next general election.12.Assume the next general election will be fought with the coalition’s economic policies to have, broadly,worked.13.Analyse how the tories won 4 times on the trot.14.work out how Cameron brought them back from nowhere in 4 years.15. Assume that more of the same(1997-2010) will get nowhere, in future.16. Accept that people vote with their pockets,higher tax never washes for those that vote.

  20. This is a first for me on here….a very well written article eclipsed by a comment. Edward C Browne is 100% on the mark, worthy of an article in its own right.

  21. Chris says:

    “First, the opposition sticks to the government’s spending plans. Period.”

    Even when their spending plans are mental? The biggest risk of Osborne’s plans isn’t a second recession but a long period of low economic growth meaning he won’t get the increases in tax revenue he is betting on and thus won’t close the deficit. It isn’t a “mini-me” strategy to call for slower deficit reduction, opinion polls show a majority agree with a slower pace. Osborne’s ratings are good because he’s been well spun but also had the good fortune of the growth figures from Q2 & Q3, we’ll have to wait and see what his ratings are after the Q4 2010 and Q1 2011 growth figures have come out.

  22. AnneJGP, I don’t agree that the rise in the polls has been too fast, in fact it has been slow and steady. I mistrust polls when they jump either way rapidly as some sort of knee jerk reaction to a particular event, but this is not what has happened.

    I believe there is a tendency to over-egg the pudding and write in problems you only think may happen. In my opinion our position is clear, our core voters are likely to be those who are affected by the cuts and in any case as a progressive political party with a conscience, most of these cuts based on ideological reasons should be opposed.
    I am all for reform in welfare and the NHS, we need to constantly progress and move forward, but reform for reform sake is wrong, and reform should not mean ideological money saving costs with the poor, sick and vulnerable ending up paying the highest price and neither should people be expected to pay with their jobs, it is morally wrong.

  23. Pelletor says:

    Apart from the dreadful football analogies, a very interesting piece.

    I’d take issue with your suggestion that Labour should stick to the opposition spending plans. This will lead to a situation where it becomes almost impossible to propose alternative policies in other areas, notably Health and Education. This would lead to a position where Labour can’t do anything other than jeer at ‘unfair’ cuts.

    Also, E.C. Browne’s comment that, if not handled correctly, Labour would lose potential support from disaffected LibDems to the Greens and working class Labour voters would flock to the BNP, is bordering on the deluded and (at worse) reeks of paranoia. Neither party is a credible force, at local or national levels. The BNP lost their deposit in OldSad and the Greens keep fielding candidates, but fail to get anywhere with them.

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