Labour is 16% behind on the economy. So why are so few in the party talking about how to close the gap?

by Atul Hatwal

Sixteen percent. According to the latest YouGov poll, this is the lead that David Cameron and George Osborne hold over Ed Miliband and Ed Balls on who the public trust to best manage the economy.

This is after George Osborne has missed every single deficit target, has had to admit the worst of the cuts are yet to come, has downgraded future growth forecasts and has done his best to trash the Conservative’s brand for sound finance by promising £7bn of unfunded tax cuts.

In politics at the moment, the Tories can do anything on the economy, bodge any target, make any ludicrous promise and still Labour will lag far behind.


This should be the question animating debate within the Labour party. No opposition has won an election while trailing on the economy and leadership. In the past few weeks there has been plentiful if inconclusive discussion over Ed Miliband’s leadership deficit, but comparative silence on the party’s economy deficit.

In place of discussion, there are just tropes about the Tories. Words that have demonstrably failed to have any impact on the public over the past few years.

Understanding the causes for this silence shines a light on the divisions that blight Labour and that will have to be bridged if it is to regain power.

There are broadly four groups within Labour today: what used to be called the Blairite, New Labour right, the traditional right clustered around Ed Balls, the soft left which is Ed Miliband’s core constituency and the hard left which is organised around Unite.

On economics, there is a good deal of unanimity between Blairites and traditional right. Both back a fiscally centrist position, with clear action on the deficit and honesty on the level of cuts that will be required.

Policy differences between these two groups tend to be concentrated on social issues, such as immigration and LGBT rights, and foreign policy, particularly over military intervention – the modern heirs of New Labour being more progressive and internationalist than their socially conservative and cautious traditionalist colleagues.

Both groups have been silent on Labour’s dreadful economic standing, but for different reasons.

For the Blairites, while Ed Balls is right about much of the economics, he has been hopeless on the politics.

Refusing to acknowledge any mistakes on spending by the last government meant the Tories were able to pillory Labour as unrepentant as well as profligate.

Only moving to commit to match future government spending plans two years into opposition meant the Tories were able to use that time to define Labour’s plans in the public’s perception.

And by portraying all of the country’s economic woes as the fault of the government, Balls allowed them to claim responsibility when the economy started to grow, as was always likely.

There is little love for Ed Balls among the Blairites but even less appetite to be seen as the source of dissent in the party.

One of the defining internal political events of the past three years has been the left’s attempt to expel Progress from the Labour party. Not because of the importance of Progress per se but what the episode signified.

The leadership’s singular lack of activity to stop the ASLEF expulsion motion as it progressed through Labour’s internal processes was the political equivalent of a punishment beating for the Blairite right.

The message was clear: if you cause trouble and stand up for your views, you will pay a public price. The message was understood.

If the Blairites attacked Balls that would also destabilise Ed Miliband and unite the old right, soft left and far left against them in a damaging dispute.

So the Blairites remain silent.

The traditional right is closely aligned with Ed Balls. A mix of personal politics and future opportunity – Ed Balls’ wife, Yvette Cooper, is one of the favourites for the leadership if Ed Miliband stumbles before or at the next election –bind them to him.

Any discussion of Labour’s economic predicament would be loaded with implicit criticism of Balls. He might be one of Labour’s biggest beasts, but has been weakened by repeated clashes with the leader’s office and the party’s poor polling on the economy.

Dissent from his own allies, some of whom privately bemoan aspects of his political strategy, would be damaging for his career and potentially fatal for Yvette Cooper’s leadership aspirations.

So the old right remain silent about the economy even while many of them are privately and publicly voluble about the problems with Ed Miliband’s leadership.

The position of the soft left is is akin to total bafflement on both the policies or political positioning that could reduce the economic trust deficit.

I was at a breakfast briefing earlier this week where a high profile media supporter of Ed Miliband’s summarised the common soft left lament.

She understood the polling that showed how reluctant the public were to back the higher taxes and borrowing needed to avoid deeper cuts. She could see the scale by which Labour lagged the Tories on economic competence; but had no idea of how to close the gap.

At root, she couldn’t understand why the public did not comprehend the damage being done to the welfare state and public services by the Tories. If they did then they’d surely turn to Labour; but they didn’t and nothing seemed to be working in enlightening them.

For the soft left there is no answer other than to keep on pushing the same lines as before in the hope something changes. Almost a case study in Einstein’s purported definition of insanity.

To discuss Labour’s economic deficit would not only loosen Ed Miliband’s uncertain grip on the leadership but pose problems for which they can offer no solution.

So the soft left remain silent.

Unlike the other three factions, the hard left are less constrained by personal politics, have the union muscle to ignore political threats and have a clear, alternate prospectus on the economy.

It’s a plan that is radioactive in terms of public support: big tax hikes, increases in borrowing and a massive expansion of state intervention in the economy are as electorally attractive in 2014 as they were in 1983. But it is a plan, and of all the factions, the hard left are the ones starting to make their case.

Neil Findlay’s campaign for the Scottish leadership is a dry run for what many see as the left position in the next national Labour leadership campaign, if and when Labour are defeated at the general election.

So far, the criticism on the economy has been muted, but it will become more and more pointed if, as the election draws near, Labour’s position does not improve.

There will need to be sufficient red water between the hard left position and Ed Miliband’s soft left leadership if the Unite candidate at the next leadership election is to be able to campaign on a platform sufficiently different to the economic policy with which Labour fought the 2015 election.

The result of these various divisions and pressures within Labour is that most politicians and commentators do not talk about the party’s problem on the economy, despite its clear impact on electability.

Those that do venture into this territory, speak from the perspective of the far left, calling for more nationalisation, taxes and borrowing which makes the party seem even less centrist to the electorate.

It is probably too late to shift public perceptions of Labour on the economy, but if the party is defeated next May, and the questions are then finally asked about how Labour drifted into an election trailing on the economy by almost twenty points, this inadvertent conspiracy of silence between most of Labour’s factions will provide a large part of the answer.

Atul Hatwal is editor of Uncut

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12 Responses to “Labour is 16% behind on the economy. So why are so few in the party talking about how to close the gap?”

  1. John reid says:

    Andrew Neil summed this up in daily politics, the other day, next year, the stories, us and the Libdems,all not having a clue how tocut spending to 1930’s standards, and the unemployment it will cause, aren ll going to ignore it at the general election,

    Not to say that Ukip, have but if there’s mass unemployment and we had a tory UKIP coalition, they’d blame it on the Tories not getting rid of those immigrants

  2. paul barker says:

    A reasonable analysis but with huge holes where the words Coalition & Libdems should be. If you want to know why The Tories Lead on The Economy 2 obvious explanations are Tax cuts for the lower paid & Unemployment falling by 10,000 a week, neither are obviously Tory but , for now Voters dont distinguish between Conservatives & Coalition, any more than you do.

  3. Madasafish says:

    Osbourne has been a failure : he has tried to cut the deficit and failed..- this year at least. Next year? well it’s an election.

    Ed Balls? More U turns than Lewis Hamilton celebrating a win. More brrowing and sending? Err.. no ..let’s try austerity. austerity. Triple dip recession? Err…no.. best performing large economy in Europe.

    The public? Squeezed incomes, no real waae growth, Don’t like austerity much but hate the idea of more spending and more taxes– as their incomes will be squeezed more.

    Meanwhile public trade unions think their members are entitled to ahve real wage increases when no-one eslse has: and who funds it? The squeezed tax payesr.

    People are not fools..Apolicy which depends on “bankers bonuses” and the rcich being taxed.. and those monies being used several times in speeches to fund different things .. just emphasise the economic illiteracy of Balls. not just double but double double counting).

    And a policy supporting unlimited immigration (which costs money for services), opposing welfare restraints and all spending cuts just reinforces the impression of spendthrifts in charge of polcy.

    To cap it all, MPs are paying themselves a LOT more.

    If Labour had shareolders who were interested in economic perfromance, teh entire Shadow Cabinet woul be fired..enjoying the perks of office and doing nothing is a sure way to get the order of the boot.

    It’s all very well criticising Osbourne: he has tried and failed.
    Labour have not got to the trying stage.

    If as I suspect they end up as the largest Party, there will be a huge number of disappointed supporters after two years in power… things are going to be very difficult.

  4. Robert says:

    Labour Liberal or Tory what a mess and I doubt the country sees any of them worth voting for..

  5. Mike Stallard says:

    Mr Balls has been speaking a lot about austerity. If you look at the figures, though, on John Redwood’s Diary, public spending has increased during the coalition government. So why the fuss?

    I suspect that a lot of people have lost their jobs as the public domain has been cut back hard. The Labour Party, largely supported by the Unions who represent these people, has naturally tried to represent them. Also the cut backs on Welfare have affected a lot of people who are now working in low paid jobs which they dislike intensely. Again, there is serious discontent.

    But, of course, all this does not add up to an economic policy, does it.

  6. 07052015 says:

    Interesting article.

    I have never known any politician in my 13 general elections specify cuts to come so with this election on a knifedge it wont happen this time either.We all have no plans.

    The elephant in the room is serious action on tax uncollected but this requires international solidarity and coordination and a willingness on behalf of the the city that uk tax havens will be bribed into ending their code of silence.And it requires politicians to call the bluff of those who threaten to decamp.A tough ask !!

    I am surprised that miliband hasnt hinted at labour signing up for a financial transaction
    Tax which would also underline our european credentials.

    Tories are getting ratty as there is no sign yet of the normal swichback to the government .Labour hopes the snp vote is soft but the taylor commission doesnt seem to have produced a bounce back.Maybe the new scottish leader will.

  7. John P Reid says:

    07052015′ don’t know if you’re ols enough to recall Gaitskell suggesting cuts in 1959′ im sure Ted Heath did in 1970′ technically labour said they would have to cut the NAhS in 2010 where the tories at the time, promised to not cut NHS spending,
    It reminded me of the USA 1988 election george bush said read my lips no knew taxes, Democrat Dukakis, said only at a last resort, it was a winning quote for george bush SNR, who thrn of course did put taxes up,

    Same as the tories cutting the NHS now.

  8. paul barker says:

    I see that in Ashcrofts latest Polling (reviewed on Political Betting) that a quarter of “Labour” Voters prefer Cameron as PM, thats something else for you all not to discuss.

  9. swatantra says:

    Its going to take a real miracle to convince the electorate to put their trust in Labour, just after one term out of Govt. I don’t think its been done before, rather like winning 3 elections one after the other, apart from theT ories in 1992. And I have a feeling that 1992 scenario is going to be mentioned a bit more leading up to the GE.

  10. Tafia says:

    Ed Balls – in interview on Sky News after the Chancellor’s Autumn Statement was quite specific – “There will be n o increase in borrowing under Labour post 2015”.

    Bearing in mind that it is impossible to reverse or even slow down austerity without more money to the Exchequer, then that means Labour is committed to on-going austerity or it intends to fill the gaps with tax increases – and taxing the rich more won’t raise that amount of shortfall, only a mass tax will.

    Or he’s lying – which wouldn’t be the first time.

  11. 07052015 says:

    Old but not that old JPR.

    Excellent analysis from Will Hutton in todays Observer

  12. Landless Peasant says:

    “she couldn’t understand why the public did not comprehend the damage being done to the welfare state and public services by the Tories. If they did then they’d surely turn to Labour”

    Oh but many of us DO understand what the Tory scum are doing, only too well, but we’re not turning to Labour because we view them as being little different. It was Labour who first introduced conditionality to claiming State Benefits with their dreaded ‘New Deal’, and they continue to support Benefit Sanctions even now, so we’re not likely to vote for them are we?

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