The right posture can really help a squeezed middle

by Michael Dugher

There were some interesting polls this weekend. The latest YouGov one on voting intentions for the Sunday Times put Labour on 44 per cent, the Tories on 33 per cent and the Lib Dems clinging onto double figures on just ten per cent.  In fairness to the Lib Dems, the survey of voting intentions was conducted prior to their spring conference held in Sheffield this weekend.  They may receive a post-conference boost – and pigs might fly. ComRes also had a poll on voting intentions for the Independent on Sunday and the Sunday Mirror. That put Labour’s lead at three points, not eleven. But at this stage of the electoral cycle, polls on voting intentions don’t really count for much. It’s a bit like deciding who is going to win the premier league by looking at the table after the first six matches have been played.

Far more interesting was the ComRes data about attitudes to the economy, which suggests that public opinion is going against the Tory-led coalition. Only 23 per cent agree that George Osborne is “on my side” in dealing with the country’s economic problems. By contrast, nearly half of our respondents think that, when Ed Miliband talks about the “squeezed middle”, he is talking about “people like me and my family”.

As the Independent on Sunday’s John Rentoul wrote at the weekend: “the Labour leader seems to have struck a chord with his warning of a ‘cost of living’ crisis”.  But Rentoul is no fan of Ed Miliband and he likes Ed Balls even less. In fact, he may just have a problem with people called Ed. When Ed Balls wrote an article in the Sun, siding with hard-pressed motorists and arguing against the VAT rise – something Balls has done more consistently perhaps than almost anyone else – Rentoul denounced the move on Twitter as “opportunism”.  If Tony Blair had written a similar piece for the Sun, Rentoul would undoubtedly have said how “in touch” the former prime minister was.

In his piece yesterday, Rentoul was pretty dismissive about Labour’s attack on the Conservatives for the impact government policies are having on “the squeezed middle”. He rightly said that the government has advantages, not least levers to pull and buttons to press. But Rentoul wrote that the impression left by the ComRes poll was “deceptive” and that Labour’s cost of living argument “is not an argument; it is just opposition posture”.  First, that underestimates the importance of our “posture”.  Second, the concern with living standards is a significant political argument for Labour and one that is rooted in people’s everyday lives and experiences.

When Ed Miliband first spoke out last year about the cost-of-living crisis for millions of middle and low earners, there was a hostile response from Labour’s political opponents and a sceptical one from many journalists. Nick Robinson at the BBC described it as “the squeezed muddle” because Ed Miliband refused to leap into a large elephant trap by saying that the squeeze only applied to people on a very specific income.

Labour’s argument is that there is a financial squeeze affecting people on middle and modest incomes, depending on their circumstances. The pressure on household incomes comes about because of a range of issues.  Some are as a result of trends in the global economy, like the rising food prices or oil. Others are as a direct result of specific policies that are far from helping but making a difficult situation worse. Many people have had to take pay cuts or pay freezes (a real terms cut in income) because of the pressures on both the private and public sectors. Inflation is rising. But growth has stalled because of government policy. Unemployment is rising. The fear of unemployment is tangible. The fact is that too much money has been taken out of the economy too quickly. Tax credits and benefits, notably child benefit, are being cut. The cost of getting to work, if you’re lucky enough to be in work, has risen. This can include the increased cost of motoring, the fact that commuter rail tickets have shot up or that parking in many places now costs more. And the weekly “big shop” at the supermarket, or the cost of filling up the family car at the weekend, has been made worse by the government’s hike in VAT.

Policies such as the abolition of the education maintenance allowance have particularly hit people on lower incomes. But people on a range of incomes are feeling the squeeze, especially if they have a family. For example, an individual earning £44,000 a year is in the top 20 per cent of earners and qualifies for the higher rate of tax. But the institute of fiscal studies shows that while this is a good salary for an individual who lives on their own or in a couple, the same income if stretched to meet the costs of living for a whole family doesn’t offer that family anything like the same standard of living. A single-earner family dependent on an annual income of £44,000 is also facing a squeeze. Their income may be in the top 20 per cent, but their standard of living is around the middle.

That is why Labour’s argument about living standards resonates with so many people. But as well as being about policy, “posture” (to use John Rentoul’s word) is important too. It is still less than a year since Labour lost the general election. In the aftermath of such a defeat, we should still be in listening mode and the policy review process is the right way to do just that. It is important not just to recognise the things we got wrong, but to understand what we got right. Crucially, we need to show that Labour is changing and we need to take the necessary time in getting Labour’s forward offer right. The country is only just beginning to look at us again. There is no mad rush.

On budget day, the Tories will no doubt repeat their line that you cannot attack a plan if you don’t have a plan. We will, I am sure, offer a strong alternative voice on the economy. But there is a fundamental difference between government and opposition. It will be for the government, not the opposition, to produce a budget. The history of shadow budgets, even during elections, is not a happy one for Labour. Producing one now, so far from the election, would be lunacy. Credibility, especially on the economy, is critical for oppositions. But it takes time to develop. Our job now is to scrutinise and to expose, but to be quite responsible in doing so.

Posture – political body language, if you like – is important at this time. We do have to show emotional intelligence. We have to demonstrate that we are getting back in touch, that we appreciate what people are going through, and that we understand what life is like for millions of families. In short, we have to show people that we “get it” and that their government does not. The public are not looking for mini-manifestoes or pledge cards just yet from Labour. But they do want to see signals – powerful messages about what our priorities are, and they want Labour to be clear about whose side we are on. If we do that now, even if we are criticised for being concerned with “posture”, then the opinion polls will continue to move in the right direction.

Michael Dugher is Labour MP for Barnsley East and a shadow defence minister.

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3 Responses to “The right posture can really help a squeezed middle”

  1. Phil Ruse says:

    And yet it is fundamentally dishonest because it implies there is a way for the middle to avoid the squeeze – and there isn’t.

  2. Edward Carlsson Browne says:

    For a start, Phil, you could avoid cutting tax credits such that it’s virtually impossible to get anything from it with a household income above £30,000 (as the coalition said they wouldn’t), you could not have such an absurdly sheer cut-off of child benefit, you could preserve the EMA in some form (as the coalition said it would), you could stop depressing business confidence and you could look at measures like a fuel-price stabiliser (difficult though that one is.)

    At a macro level, you could attempt to control inflation, if not by raising interest rates (as the economy’s too weak to sustain that right now) then by trying to strengthen the pound (which would weaken manufacturing a little, but it’s still growing strongly and doesn’t employ a huge percentage of the workforce).

    None of these options are necessarily easy and most would reduce rather than eliminate the squeeze entirely – that would require a different model for sharing the proceeds of productivity gains to allow an increase in real incomes for the middle without an inflation spiral, which isn’t a simple process.

    But there are levers to minimise the squeeze, it’s just that the government doesn’t think they’re worth focusing on right now.

  3. william says:

    The correct posture is to reflect what the opinion polls show about the public’s belief in the need for cuts,the majority do,and clearly ditch the disastrous stealth taxes,inflation of public sector employment,government expenditure increasing faster than GDP growth,unaffordable welfare spending,EVERYTHING THE ELECTORATE PIN ON GORDON BROWN,and promise Roy Jenkins like economic orthodoxy.

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