The double-dip, if it is one, has not changed the rules of the game

by Rob Marchant

Delight, for many on the left, met the economic figures last Wednesday. Britain was not in recovery after all, but was the victim of a double-dip recession. Paul Krugman wrote eloquently of Britain’s “death spiral of self-defeating austerity”, and Ed Balls had a very good day.

All true, or very likely so, although one cannot know for sure, Balls and Darling seem to have been closer to the mark, and Krugman is usually a pretty shrewd observer.

Balls’ argument is looking considerably stronger than it did and, in parliamentary terms, as Dan Hodges puts it, he “put George Osborne on the canvass” . So this is the start of Labour’s long road back, right, now we have fixed our economic credibility problem?

Ah, would that it were that simple. Where we might want to differ from the good Hodges is when he says that “Balls has won”. He has not. Labour has not. For a number of reasons: but most already known. Stephen Beer, a fund manager, warns at Progress that we have not done “enough to restore economic credibility for Labour”, and he’s right.

But it is more than that. Even if we can make a convincing argument, in the court of public opinion, for being cleared of economic incompetence, there are a half-dozen other charges which it will surely want taken into consideration.

First, as Hamish McRae points out in the Independent , government predictions have underestimated GDP by half a per cent, on average, over the last ten years. So we may well not actually be in recession at all after the figures are corrected.

Indeed, the insightful McRae goes as far as to predict that the “doomsayers will be proved wrong” on the basis of some alternative figures from Goldman Sachs. Not conclusive, but enough to make us hesitate.

Second, the Tories being proved wrong is not the same as Labour being proved right. We do not know for sure what might have happened, had Darling or Balls been Chancellor instead of Osborne. Neither can we even explain in detail what we would have done: while we have specified a level of cuts, we have not yet said where we would have cut, which of course could affect outcomes.

So Labour might have done just as badly, or worse. We do not know and, besides, the game of alternative histories is rarely one which moves voters.

Also Beer writes correctly that, on top of this, we need to get back credibility with the financial markets, where we currently seem to be doing our best, via our “predators versus producers” talk, to alienate them.

Third, we should be wary of yet again focusing on the economics and ignoring the politics: even if we were to win the economic argument with economists and the media, this does not mean voters will believe us.

The Tories will continue to blame Labour under Brown, not to mention the euro crisis, which seems a horse which will run and run in the “useful Tory excuses” stakes. In fact, although the latest poll on the blame game shows, encouragingly, that blaming Brown is an excuse which is starting to wear a little thin with voters, 56% of those polled still blame the economic situation on factors other than the government , as the Sunday Telegraph’s Iain Martin helpfully pointed out to me earlier this week.

Fourth, Labour is riding high in the national polls, yes. But it is on the back of government unpopularity and, in the last couple of weeks, chaos. It is not demonstrably, thus far at least, down to Labour achievements. It is pleasant to feel the sun now and then, but we cannot expect that it will last. There is a very strong likelihood that this Tory bad news will not last for the next three years: count on it.

Fifth, credible economic policy, even though it represents a big part of Labour’s electoral challenge and even if we can achieve it, is by no means all. The mountain Labour has to climb is also reflected in other vital challenges where its prospects range from unpromising to dire.

London, where it is damned if it loses and damned if it wins. Scotland, where the UK may just be saved from disintegration despite the party, rather than because of it. Leadership polling: move along here, nothing to see.

And, probably most important of all, policies. With Liam Byrne’s departure to Birmingham, the policy review now appears to have gone AWOL.

The brutal electoral equation is this: no policies equals no alternative programme, which equals no hope, until that changes. A change which will now inevitably be delayed.

Finally, we must not forget that a reaction of delight at the figures, with the suffering of the country as background, is not an attractive position, viewed from outside. I-told-you-so will not win us many votes, even if people think that we were right. And even though this double-edged event is probably, frustratingly, a necessary condition for Labour’s rehabilitation.

We have perhaps heard one swallow sing, but it is still, sadly, the middle of winter. The song, as Robert Plant once put it, remains the same.

Rob Marchant is an activist and former Labour Party manager who blogs at The Centre Left

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23 Responses to “The double-dip, if it is one, has not changed the rules of the game”

  1. Anon E Mouse says:

    The country will continue to blame Labour under Brown and his financial incompetence not just the Tory Party because it is Labour’s fault. The tax take in 2007 should have been saved for the rainy day everyone except that clown knew was coming.

    Even allowing for the “Boom and Bust” nonsense, the 10p tax fiasco, increasing the state pension by £0.75 a week, increasing NI contributions, the underselling of our gold reserves, the disgraceful way Alistair Darling was treated by Labour for telling the truth, the expansion of schools and hospitals with PFI where our children’s children will pay for the recklessness of Labour and on and on and on.

    If Labour continue to bore the public to death about phone hacking and Rupert Murdoch they will continue their downward spiral as witnessed with Scotland, Wales and George Galloway. Who does Miliband represent with his fake outrage every week in the commons?

    To be clear. It costs the minimum wage to enter South Wales over the Severn bridge or the same to put a single gallon of petrol into a car. When did Miliband last try filling a car with petrol I wonder.

    The poor are suffering and do not care about higher taxes on the rich. They want lower taxes on the poor and to date the Labour Party has not offered a single credible idea on this. It’s as if Labour are on a different planet.

    Sack the champagne socialists and start representing the poor because at the minute this useless government we have has done more to alleviate poverty in two years than Labour did in fourteen….

  2. The Future says:

    Does this site ever have anything positive to say? Did people like Rob only take an interest in politics to criticise? Labour uncut is the political equivalent of the bitter old drunk in the corner harping on about the glory days. Stating the views with utter certainty when the world has moved on and they are laughably out of date to everyone but themselves. No one listens to them. No one wishes them to be there but yet they are certain that only know the correct answer.

    It is all really pathetic.

  3. swatantra says:

    We’re not going to sound all that convincing or until we get a lot more people who have been in been industry and run businesses themselves standing as Labour candidates. Last time round Labour had to import Digby Jones into Govt because it didn’t have one of its own. Smug Tom proved it again yesterday: Labour doesn’t understand business.
    By insisting on putting that phrase into the Report he in a way undermined an unananimous condemnation of NI and its Head in just one aspect of that Media Empire. People make mistakes; its not always possible to know every iota of what every emplyee is doing in tha vast empire. What matters is at the top do they understand Ethics and Corporate Responsibility.
    The same argument applies to The Army, Farmers, The Police, Shop Keepers; we need more MPs who have experience of those fields. Labour has to have a broader membership base if it is to survive.

  4. Clr Ralph Baldwin says:

    Rob you have missed out two fundamental charges you have neglected to mention and one of them is linked to your paragraph before the final one.

    I can’t say any more but Labour is not going to come out of a lot of things occurring at the moment very well at all.

  5. Mike Homfray says:

    You won’t be happy until Labour adopt right-of-centre policies. That would be a pointless activity as the coalition already cater for people who want that view represented.

    We can only hope that Liam Byrne’s hands are off the policy review since I can’t imagine him producing anything worth reading

  6. Rallan says:

    “Does this site ever have anything positive to say?” The Future

    Honestly, does the Labour Party itself have anything positive to say? All that’s been heard for years is negativity and hostility. What constructive contribution/suggestion has anyone from the Labour Party made in the last 5 years?

    “We’re not going to sound all that convincing or until we get a lot more people who have been in been industry and run businesses themselves standing as Labour candidates.” swatantra

    It’s not just Labour. Pretty much the same thing can be said for the Tories. The public tolerance for our “leaders” is wearing very, very thin. What have any of today’s front line politicians done that qualifies them to lead us? How can they possibly represent the nation when the people have growing contempt for them all? And the more we see of their behaviour, the less we respect their authority. Why should any of them be allowed to speak for the country when they are so blatantly tribal, divisive, dishonest, incompetent and disconnected from the real world?

  7. Matthew Blott says:

    @ The Future

    I suggest you try Labour List if you want a pro party line.

  8. paul barker says:

    The only thing that will restore labours reputation on anything is time, time for voters to forget. 18 years seems to be the average needed, perhaps you will be lucky & 15 will do.
    That depends on you all holding together & on sorting the mess you made of your own finances, of course.

  9. BenM says:

    “Delight, for many on the left…”


    And runny egg on the face for all the Rob Marchants of this world.

  10. Anon E Mouse says:

    swantantra – I agree completely with your point about Watson and the condemnation of Murdoch.

    With News International increasing it’s profits by 27% last year and over 1 in 6 people in this country paying for the their TV to say nothing of the most popular newspapers by a country mile in this country it’s as if Labour are living in a parallel universe and it makes me despair that no one seems to care.

    With no major working class jobs left such as mining or steel workers so Labour needs every single vote they can get…

  11. Rob Marchant says:

    @AnonEMouse: interesting argument: on the one hand you say the poor are suffering, on the others you say this government are fixing it. How exactly is that being done then? You must be pretty much alone in thinking that the lower-paid are thanking the government for their actions.

    @TheFuture: sorry you feel that way. Perhaps you should read articles which offend you less, at another website.

    @swatantra: you are absolutely right about getting more people from business involved with the party, as I argued in Ch. 3 of Labour’s Business.

    Re the Army, Jim Murphy is nobly trying to get more servicepeople to stand as candidates. Trouble is, our current selection processes militate directly against this: By distorting our processes out of all recognition via positive discrimination and then compounding this by effectively subcontracting a large part of them to trade unions, we ensure that our representatives come from as narrow, rather than as broad, a base as possible.

  12. Rob Marchant says:

    @Ralph: I’m intrigued…

    @BenM: nice try, but you are sadly poorly informed on my views. I have said since the start of this government that “too far too fast” is a correct policy economically, but ignores the politics. And that Brown did not get it that wrong, or at least no more so than many previous Tory governments.

    I have also long supported Krugman’s analysis of the potential harm to growth of too-harsh austerity. However, we need to highlight what we would cut and what we wouldn’t. And the realpolitik is that we will need to accept annual Tory spending limits by 2015 anyway, so the only question is how we would play things between now and then.

    If you can point to anything I have ever written predicting that we will *never* reach a double-dip recession (not that this is even certain, as per McRae), I would be delighted for you to post that link here. Please, be my guest.

    Wrong, wrong, wrong.

  13. The Future says:


    That’s what most people do really. It’s hardly like Labour uncut is at the front line of internal party debate. In fact I would go the opposite way. Just a bunch on people complaining to themselves.

    Maybe if every single thing that happened wasn’t seen as bad for the party of the leadership it wouldn’t be so bad. I mean. You and the other authors on this site attacked Ed Balls no end. He was right and you were wrong. But even now you can’t bring yourself to admit that. Not fully at least.

  14. Mike Hodges says:

    I like Labour Uncut because it isn’t just a pro Labour Party mouthpiece. This article is an excellent example of insider critique and should be read out to the current Labour leadership to remind them that elections are usually lost by the incumbents not won by the opposition. Such criticism is healthy and necessary if Labour is ever to return to power. I just hope the Labour Party leadership are listening.

    Labour lost the last election, the Coalition didn’t win it. That happened because Labour had lost its credibility. A factor more important to many people than pure economics. Brown, in my opinion the worst Prime Minster the UK has ever had, seemed hell bent on destroying the reputation of the Labour Party. His gaffes as Prime Minister were just as damaging as his actions as Chancellor. The current Labour leadership have failed to separate themselves from the tainted Brown legacy and until they do they won’t be able to build their credibility in the eyes of the UK electorate.

  15. Anon E Mouse says:

    Rob Marchant I am one of the lower-paid – minimum wage if I’m lucky. Running a small business is not easy at the moment.

    Poor people have lower personal taxation under this government. This is in stark contrast to the removal of the 10p tax rate by Labour and the NI hike not used to build hospitals.

    The business rates have massively dropped on the estate where I work in South Wales.

    The VAT doesn’t apply to food so who cares.

    The duty on petrol is my problem and that stupid green escalator thing that does not take into account people’s circumstances.

    Labour and it’s big state thing is over and I hope it never comes back. I’m poor and would rather see normal people’s taxes lower than the extremely rich like Harriet Harman higher….

  16. dizzyingcrest says:

    Deficit reduction can be brought about in a number of ways the fairest would be to increase the burden on rich as there are huge amounts of wealth which can be unlocked through higher taxes, increases in inheritance tax as the value of the estate goes up and an expansion of council tax beyond where it is capped at the moment.
    One can here the screams of the wealthy Conservatives of unfair and unjust but the point is that the uk is a rich country where wealth is held by the few but generated by the many. it is hard to imagine anyone who is self made in economic terms. All wealth is dependant on ordinary working people in the following ways Most company’s need workers to make a profit. Share markets banks etc need company’s to speculate on (Thus Workers). Retailers and wholesalers need customers to make a profit (workers). The aforementioned would suggest a large part of the deficit could be paid of using the above measures to unlock the wealth of the few that has been produced by the many.
    The UK after the Second World War faced huge debts but was still able to set up the NHS and bring about the Welfare State. This was brought about by massive taxes on top earners” maintained under the Attlee government, with the top rate of income tax reaching 98% in 1949).” Thus now may be time to slim down our fat cats

  17. dizzyingcrest says:

    I fear undemocratic changes may make it very difficult to remove the Conservatives from office. Boundary changes, the increased concentration of poor people to safe labour seats (Through benefit capping) may turn some London marginals blue and the possibility of Scottish independence may Further reduce the number of labour MPs. Maybe Labour should make a full and binding commitment to Proportional representation I am sure this would be popular with people who have lived in safe seats where in effect their vote may never have counted. It may also encourage the Scottish to remain in the union.
    Moving masses of people to high unemployment areas will offer them no hope of escaping their impoverished retched situation and alienation from extended family will just make their plight worse.Even If you have no empathy with their social situation then moving people to unemployment black spots (Hull) cannot be economically wise.

  18. Rob Marchant says:

    @TheFuture: the important point is rather contained in your own words.

    You are concerned about being “at the forefront of party debate”. While we can debate whether that is the case – and in fact a number of Uncut authors have clearly contributed to that debate, whether you agree with them or not – if your horizons only take in ideas from within the party, you are unlikely to break much new ground. What you possibly fail to realise that the views of Uncut contributors, being a little more towards the centre ground, are a lot more in tune with the people of the *country*. It is those people who need to be won over. Talking to ourselves is something we are very good at, but it will not win elections.

    @MikeHodges: thanks. Indeed, “pure economics” is not the decider of elections. But the public’s *perception* of economics is a big factor; perhaps the biggest.

    @AnonEMouse: well it’s interesting. I know there are a lot of public service workers (and private sector workers esp. who are not unionised) who would probably differ on that, but it’s certainly interesting to see that not everyone hates the govt at the moment.

  19. Stephen G. says:

    RM: “you are absolutely right about getting more people from business involved with the party,”

    That’s fascinating. You’re already anticipating what “more people from business” might say – that’s why you think it valuable to have them involved – so no doubt you’ll be selective and, should any be interested, choose those who tell you what you want to hear.

    Wrong. Wrong. Wrong.

  20. Clr Ralph Baldwin says:

    Rob I am sure you are….

    But this time I can’t say as I am as I promised I would as long as bullying and corruption is practiced within a Labour party…long lost.

    However I can say that my colleagues and friends within the Labour party, good people will keep the BNP under the wing. It’s a sad tragedy their efforts are continually undermined by the pro-corruption militancy of Cruddas and his weird following on B and D council. The sooner Labour ejects them th better and Luke Akehurst could do a lot worse in using his position to encourage real candidates who work hard, and a Parliamentary candidate which is committed to public service where it is badly needed. B and D are screaming for increased public involvement not increased bulling and totalitarian of a so called Leader (ex-Lib Dem and his brother UKIP stands against Margerate Hodges Constituency Councillors and will cross the floor once elected to add to Liam Smiths mas cabal). Labour needs to see what is happening here with urgency. After 27 unpaid years it takes a lot to make me cross the floor. Ed has failed so far..

    Cruddas, Smith, like Livingstone are xxxxing bonkers and do not permit even the most basic adult discussions.

    There will be a bi-election as a result of my crossing the floor in which i shall not stand….which is more than many a “fragile” has ever shown the public and more than Liam the Hutt has ever shown his constituents when he left Liberal and joined Labour…..wasn’t it the liberal vote opposition that went BNP?

    Good to know Cruddas and Sam Tarry and Smith trying to appear Martyrs against the BNP when they so “oppose it”. tarry did not even stand in a BNP Ward and refused to stand against them…..Hope Not Hate…or Hope Not Help?

    There you go more true information and intelligence than expected…as an ex-armed forced bunny it takes a lot for me to cross the floor and any allies of antisemitism and fascism are my enemies.

  21. Clr Ralph Baldwin says:

    “There you go more true information and intelligence than expected…as an ex-armed forced bunny it takes a lot for me to cross the floor and any allies of antisemitism and allies of fascism are my enemies.” The Jews have been abused for thousands of years and it makes me sick.


  22. Clr Ralph Baldwin says:

    Labour can make my departure and sacrifice mean something. It’s up to you all.

  23. Rob Marchant says:

    @Stephen G: Yes, perhaps you would be delighted with party composed entirely of members from the public sector and the unionised private sector. God forbid that we should sully our purity with members from all walks of life, eh?

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