Autumn Statement review: It’s Reagan ’84 vs Reagan ’80

by Jonathan Todd

Barack Obama’s second term was meant to pivot. From the Middle East which has sapped American military resources and moral authority, to the Pacific, the new crucible of economic and political power. Then the Arab Spring was followed by the disintegration of Syria, the reassertion of Egyptian military rule and such intense strife that the US could not pivot from the Middle East. Even as the rivalry between China and Japan gets hotter.

Barack Obama couldn’t pivot but George Osborne wants to. From pessimism to optimism. From recession to renewal. From the micro to the macro. There are a series of pivots that the Autumn Statement attempts, which are a claim for the most prized piece of political real estate that no one in this parliament has been able to make their own: the future.

88% of Chinese have an optimistic economic outlook, according to Pew. In contrast, only 15% of Britons do. This doesn’t tell of the innate sunny outlook of the Chinese and the persistent gloominess of the British. It tells us that people can see what is in front of their eyes.

The dizzying skyscrapers and rapid economic change convince the Chinese that the future is theirs. The British fear that our best days are behind us. That our children will not enjoy the opportunities that we’ve had. That the country that gave the world the industrial revolution can no longer earn its crust in the era of the digital revolution.

In advance of the Autumn Statement, David Cameron led a trade delegation to China. The Statement revealed improving growth and public finances figures. It remains to be seen whether these figures and initiatives like this delegation come to convince us to believe in the future.

Labour’s successful campaigning on the cost of living militates against this. Last month, a Populus survey found that 38 per cent of voters agree that there is a national economic recovery under way but that only 11 per cent feel part of it, as Matthew D’Ancona has noted. We increasing see a recovery, which the Statement re-stressed to us, but it seems a recovery for the few, not the many, which Labour’s cost of living campaign wants us to think.

D’Ancona called on Osborne to use the Statement to show he believes in an “equality of worth”. What is at the kernel of both this sentiment and Labour’s cost of living campaigning is a contention that the pie can be more equitably shared. As powerful as this contention is, it will take more than this to move the British closer to Chinese levels of economic optimism. We need also to be persuaded that the pie will be bigger.

I’m an optimist about the world, Osborne told us at conference. His Statement was an attempt to make us optimists too by articulating the stuff of a “responsible recovery”. This sought to move beyond “the mess that Labour left us” to look ahead to a brighter future – provided we don’t slip back to the supposedly irresponsible ways of Labour spending.

Polly Toynbee is unconvinced, unsurprisingly. She found the Statement a study in pessimism. Which, I suspect, understates the extent of Osborne’s ambition. My instinct is that he’s as obsessed with Ronald Reagan’s 1984 presidential campaign, as Labour is with his 1980 campaign.

In 1984, he said: It’s morning again in America. In 1980, he asked: Are you better off now than you were 4 years ago? Labour hopes to condemn Osborne as Reagan slammed Jimmy Carter, a disappointing one term president, in 1980. Osborne not only wants to rebut this. But to craft an attack that gives Britain a new confidence in the future, as Reagan succeeded in doing for America in 1984.

Whether such confidence can be built through a recovery based on debt and a housing bubble seems doubtful. Osborne can no more achieve this pivot than Obama can disentangle himself from the Middle East. Labour, however, can pivot. From a party that has convinced people that it can share the pie more equally to one that can also make the pie grow more quickly.

As Patrick Diamond notes, Labour is regarded by voters as a party of fair distribution, not of production and economic growth – yet Labour’s entire governing prospectus is predicated on the party’s capacity to return the British economy to expansion. Labour should think less about Reagan in 1980 and more about him in 1984. Not least as there are numerous reasons to think the steam will run out of our cost of living campaigning before May 2015.

It can be morning again in Britain. But Osborne cannot deliver this morning, as he persists with an economic model that deepens, rather than overcomes, the weaknesses that bedevilled our economy before, during and after the 2008 crash. Labour can, however, bring this morning. Articulating this future should be as much Labour’s priority as getting as much mileage as possible from our cost of living campaigning. This future is unwritten.

Jonathan Todd is Deputy Editor of Labour Uncut

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6 Responses to “Autumn Statement review: It’s Reagan ’84 vs Reagan ’80”

  1. Ex Labour says:

    I’m afraid you lost all credibility when you referenced La Toynbee. You also avoid the fact that Labour have not yet explained what their vision for the future is and what excatly is their economic policy ?

    It’s very easy to condem Osborne etc, but as Balls showed in his pathetic response the arguements have moved on and he and Labour have been shown to be wrong. Its easy to throw in soundbites about cost of living or freezing energy costs, but what are Labour going to do specifically and how are they going to do it is what remains to be seen.

    From reading varied reports on the autumn statement across different political spectrums, the general consensus is that Osborne has been pretty clever and set some nasty traps for Labour should they decide to tell us what their intensions are.

    The comparisions of elections past may be a nice political exercise for those who follow these things, but really the majority of the public are interested in the here and now and “whats in it for me”. Nobody in political strategy wants to acknowledge this, particularly on the Labour side who seem to focus on polls that suggest we all love each other and want to share our wealth – maybe some confirmation bias here ? Certainly the Tories know Welfare is a sweet spot and the vast majority are against keeping Wayne and Waynetta in pizzas and cheap beer.

    Labour need to be wary of the Kinnock moment, when they believed it was a done deal with only days to go, and look what happend there. Perhaps a better comparison than Reagan.

  2. Tafia says:

    Actually, he minimised the bad stuff pretty well. We are in serious trouble and he was quite open about it, just clever:-

    ‘The UK economy has picked up more strongly in 2013 than we expected in our March forecast…[but]…business investment and net trade have continued to disappoint’.

    ‘We judge the positive growth surprise to have been cyclical, reducing the amount of spare capacity in the economy, rather than indicating stronger underlying growth potential.’

    ‘We do not expect the quarterly growth rates seen during 2013 to be sustained in 2014. While consumer confidence, credit conditions and the housing market have improved, productivity and real earnings growth have remained weak.’

    ‘The Government’s supplementary target is for public sector net debt (PSND) to be falling as a share of GDP in 2015-16. But, as in our December 2012 and March 2013 forecasts, we expect PSND still to be rising in that year. We expect PSND to peak at 80.0 per cent of GDP in 2015-16, to fall by a statistically and fiscally insignificant margin in 2016-17, and then to fall more rapidly to 75.9 per cent of GDP by 2018-19. This implies that, relative to the size of the economy, debt will peak at more than double its pre-crisis level.’

  3. swatantra says:


  4. southern voter says:

    The Tories have failed to create more well paid full time jobs.
    This is the stick labour must use to beat the government with.
    People want to work but cannot due to the lack of adequate well paid

  5. Ex Labour says:

    @ Southern Voter

    Quote: “People want to work but cannot due to the lack of adequate well paid

    Really ? A few weeks ago representitives from our local benefits office went to one of our local pubs at 10.30 am to find several of their ‘job seekers’ enjoying thier morning pick me up pint. They had convicned the landlord of the pub to open early for them each day and this was their regular routine. The ‘dole officers’ spoke to around 10 of them and said they were not actively looking for work (statement of the obvious) and their beer money (sorry job seekers allowance) would be stopped.

    What was the response of our intrepid job seekers ? Did they immediately stop and go to look for work ? Did they see the error of their ways ? Why no. The answer was easy……move to a different pub a bit further away hoping the benefits inspectors wouldn’t know where they were. Sadly that landlord refused to open early and they were forced to go back to their old pub and hope no one noticed.

    This is really more like the true picture of British people on benefits. They are not some down trodden strivers just looking for an opportunity. Labour are going to get it wildly wrong on welfare again and see what that does to the poll numbers.

  6. BenM says:

    Osborne remains the worst Chancellor on record.

    He’s also an electoral liability.

    Plenty of opportunity there if Labour wants to go for his throat.

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