Mould appearing in the rose garden

by Peter Watt

When the Tory Lib-Dem Coalition was formed, I remember the then hopeful Labour voices saying that it wouldn’t or couldn’t last. That the internal contradictions would bring it down. But David and Nick were cleverer than that. They agreed a shared programme for government, rules for managing disagreement and a divvying up of jobs.  And not only that, but they also passed the Parliament act 2010, that for all intents and purposes bound them together until the formal start of the next general election, 2015. And the truth was that Labour didn’t have a clue what to do about it or what to say to attack it.

Labour said that it was a Tory lead government propped up by hypocritical Fib Dems. They taunted the government for its disagreements and obvious internal tensions. But the public weren’t bothered by all that. On the contrary, they looked at the “rows” and instead saw two parties coming together in the national interest trying to cooperate. Because the glue that bound the government together was the deficit. The public understood that they didn’t both agree on everything, but despite that they were prepared to put that aside to help dig the country out of a hole; a financial hole that Labour had dug. And that was pretty much how the story has run since the love in the rose garden.

Of course there have been difficulties: the AV referendum, student finance and almost every word uttered by Vince Cable have all put tension on the partner’s relationship. And Nick Clegg must be pretty miffed that he seems to have taken more than his share of the personal popularity pain, while David Cameron remains, well, prime ministerial. But dealing with the deficit and a sense of sink or swim together has kept the show on the road.

Because the deficit and its reduction is a very necessary policy objective, it is not a political cause. In other words, it is not a story that tells of the sort of country that you want to deliver. And perversely this has been useful up until now as the two parties would almost certainly not have been able to agree on what the story would be. And anyway the public have not been worried about any lack of a visionary story. On the contrary, they have just wanted to be reassured that their government was doing all that it could to avoid Britain becoming Greece. Deficit reduction may not have been a compelling story, but who needs a story when you’re worried that the banks will run out of money?

But just recently there have been signs, just signs, of a growing tension at the heart of government. And at its heart, this increase in tension between the partners is caused by this lack of a shared vision. Because deficit fatigue is kicking in for the public. It doesn’t mean that they don’t care about it anymore because they do. It’s just that it has been said so often that it has almost become meaningless.

Saying that you are in favour of reducing the deficit is like saying that you are in favour of motherhood. Who isn’t? Oh there are arguments about how fast and all that.  But no one is seriously saying that we shouldn’t reduce the deficit.  So instead people are focusing on the quality of their lives, the price of goods and the security of their jobs. And the political strategists know that they quickly need to start telling a story that addresses these fears and hopes about the future.

And so that is forcing the arguments out into the open about what sort of country that the coalition wants to see. How big and how active should the state be? Who should pay what and how much into the national coffers? What is the best way to create growth? What is the relationship between the public and private sectors? And inevitably the cracks have begun to open as we have seen this week in the run up the budget. Arguments about a mansion tax, the 50p tax rate and the break-up of RBS.

The tensions inherent in the coalition are there for all to see as outriders from both parties take to the airwaves to promote one view or the other. And more and more often we are seeing MPs from one coalition party condemning the other party. Presumably this will only get worse as we enter the latter half of the parliament. The cooperative strength of the early days of the coalition could quickly become a weakness caused by splits and indecision. There does still seem to be a strong relationship between the big four in the Cabinet (Cameron, Osborne, Clegg and Alexander). And it does seem more likely than not that the Coalition will soldier on. But it also looks like it is quickly going to become an uncomfortable partnership.

So Labour has an opportunity to begin to tell its own story as the tensions within the coalition slowly simmer.  But only if it is able to begin to tell its own credible story about the sort of country that they want to see. And only if they remember that people’s deficit fatigue does not mean that Labour have won the argument and that in fact people still blame Labour for causing it.*

*Even if Labour thinks that that is unfair.

Peter Watt was general secretary of the Labour party.

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8 Responses to “Mould appearing in the rose garden”

  1. Nick says:

    Because the deficit and its reduction is a very necessary policy objective, it is not a political cause.


    Unless the deficit goes, you can’t get anything.

    Even with the deficit at zero, that still leaves 7 trillion of government debt linked to inflation. That inflation link means you can’t print money to pay it off, because printing produces inflation which means the debt goes up, not down.

    So far Labour won’t discuss the real debt issue, and as such you’re in cuckoo land.

  2. Gary says:

    “no one is seriously saying that we shouldn’t reduce the deficit.”

    Wrong. Richard Murphy, number 1 economics blogger in the UK and economic advisor to TUC is one name that springs to mind.

  3. theProle says:

    “Wrong. Richard Murphy, number 1 economics blogger in the UK and economic advisor to TUC is one name that springs to mind.”

    I think you meant: “Richard Murphy, economically illiterate blogger and cheap rent a quote for the TUC…”

    If your ever tempted by any of Murphy’s arguments, it’s worth reading Tim Worstall’s blog. Even without liking or agree with Worstall about many things it’s difficult after reading his blog for a bit to conclude that at best Murphy doesn’t know much about economics, and even less about adding up (he’s forever calculating vast sums of money that HMRC could collect if they changed the rules, and none of the people liable noticed, which while interesting is usually unrealistic, and when that fails he tends to resort to old fashioned double counting…) while at worst he deliberately misrepresents figures to suit his arguments.

    I’d love to see a Timmy vs Ritchie debate on the subject of the deficit, but I think it would need more than the usual BBC 3min each slot to do the thing justice… (I don’t think the Beeb let Timmy speak anyway, every time I’ve heard Richie interviewed he’s been up against someone who could be easily outargued by my dog).

  4. paul barker says:

    Another mostly sensible article but read some Labour blogs & especially the comments – there are lots of Labour voices arguing that deficit reduction is unnecesary, counterproductive, an imaginary problem etc. Im not even sure the Labour majority is with you.
    Again, your in the wrong party.

  5. Gary says:

    Who is right is not relevant here. What is relevant is that it is true that not all sections of the Labour Party agree on the need to reduce the deficit (whch was the author’s assertion) never mind the debt. The Johann Lamont speech seemed to agree with Murphy/TUC position.

  6. theProle says:

    Fair comment on one level – the sight of Murphy (who I can’t help but regard as the economists equivalent to Dr Dionysius Lardner during his disagreements with Brunel) had enraged me sufficiently that I missed the exact point you were making.

    That said, my understanding of the Richie is that he believes we should reduce the deficit, and that one day we will do that. What Richie (and the TUC et all) believe however is that we don’t actually need to take any action now (apart from possibly soaking the rich some more), and certainly no cuts, as the magic money tree will kick in and reduce our deficit right before our eyes if we just wait a bit longer.

    In other words, they intend to fix the deficit by waiting for tax receipts to rise due to growth, augmented by squeezing the rich till the pips squeak a bit more. Which would be a good plan if the level of tax/regulation on the private sector wasn’t so high as to stifle much of the potential growth.

    Now, it’s fair to say that means there is a tremendous difference between some parts of the Labour party and other parts (chiefly between the continuity Brownist/TUC/Richie tendency and the reality based community bits that have stopped believing in the magic money tree), but across the whole lot there is an agreement that the deficit needs fixing- the whole dispute is about the ends rather than the means.

    So Peter Watt is quite right to say that fixing the deficit in itself is a “motherhood and apple pie issue” – no-one across the whole political spectrum actually thinks we shouldn’t fix it – the big debate is how.

  7. Gary says:


    The drunk thinks the best time to go sober is tomorrow. I’m not convinced that really cuts it as an argument (from them, not you).

  8. BenM says:


    “If your ever tempted by any of Murphy’s arguments, it’s worth reading Tim Worstall’s blog…”

    Oh dear.

    Do read Tim Worstall. Try not to laugh to much. The go and find some serious economic analysis elsewhere.

    Richard Murphy’s blog is not a bad start.

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