economic credibility « Labour Uncut

Posts Tagged ‘economic credibility’

We need economic policies for 2020. Not 2008

02/09/2015, 07:42:03 PM

by Michael Pavey

The story of the last Parliament was the Tory-led government crushing a nascent economic recovery and condemning the country to five years of misery through austerity – but successfully convincing the public that it was all Labour’s fault.

In no small part this is because immediately after the 2010 election, Labour indulged in a prolonged and self-absorbed leadership contest. Instead of defending our economic legacy, we bickered amongst ourselves and allowed the Tories to badge us as spendthrift deficit-deniers who caused the financial crash. We never shook off the damage of those early months.

Now we are making exactly the same mistake. Instead of developing persuasive economic policies which people understand and relate to, we are focusing on the fantasy that is Corbynomics. I have absolutely no problem with Jeremy Corbyn – but Corbynomics is the polar opposite of what we need. Not because it’s scary and left-wing, but because it will have less and less relevance to people’s lives as the next general election approaches.

The cornerstone of Corbynomics, “Quantitative Easing for the people”, is a triumph of hindsight over commonsense. It’s what we should have done in 2008. But the unique circumstances which created that moment no longer apply. When the whole financial system stood on the brink of meltdown, we should have set a much broader definition of the public good than simply protecting current accounts to keep ATMs flowing. At the same time as saving the banks, we should have had a strategy which also protected jobs, livelihoods and public services from the impact of a prolonged recession.

But to say we should have done this in 2008 doesn’t mean it’s the right thing to do now. 2008 was a unique moment, both economically and politically. An unprecedented meltdown triggered an equally unprecedented clamour for political intervention. Hindsight shows that the steps taken were far from perfect, but this was a time of genuine fear when no-one knew what was happening – so Gordon Brown deserves full credit for averting something far worse.

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Posted in Grassroots | 11 Comments »

Ten hard truths for Labour

05/08/2015, 03:07:15 PM

Following Tristram Hunt’s call for “a summer of hard truths” Labour Uncut is running a short series laying them out. Here’s Samuel Dale with his top ten.

1. We need to match Tory spending plans in 2020. Ed Balls ran the tightest and impressive spending controls of any major party in modern political history at the last election. No shadow minister made a single unfunded commitment. But it didn’t matter because you don’t build economic credibility through micro-policies. You build it through a strong macro-economic plan. Labour was promising to spend and borrow more than the Tories. It meant the Tories were free to make billions of pounds worth of unfunded tax cuts, NHS spending and rail fare freezes all while being able to claim they are more responsible than Labour. General elections are a zero sum game. You choose one party over the other. Labour will not gain economic credibility unless it matches Tory spending plans.

2. We need our own cuts. Labour needs to be creative about how it would cut spending to pay off the deficit and reduce debt in this parliament too. We can’t wait until 2020 to rebuild our economic credibility. John McTernan has suggested a possible fire and police service merger to modernise the emergency services. Do we need a whole department for culture, media and sport? Can we divide up contents of the business department? How can we join up pension policy across the Treasury and DWP? Labour has to provide a fairer alternative and show that the Tories are making the wrong political choices even within a tough economic environment. It must start as soon as possible.

3. A collection of popular policies is not a platform for government. The far left are fond of the old trope that renationalising the railways is very popular with the public. But a collection of popular policies is not a platform for Government. Ed Miliband had popular policies on non-doms, freezing energy prices, ending the bedroom tax and cutting tuition fees. In 2005 the Tories banged on about popular welfare and immigration policies. But put it all together and the manifestos were less than the sum of their parts. Voters choose Governments from the mood music rather than specifics.

4. Attracting non-voters will not win elections. No matter how many pilgrimages Labour leaders make to Russell Brand or how many voter registration drives we do, it will not change. The old will turn out to vote in far greater numbers than the young and the middle classes far more than the poor. You can not change the electorate over five years by attracting non-voters to vote Labour. It is a pipe dream.
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Posted in Uncut | 21 Comments »

The leadership contest is a total disaster for Labour

13/07/2015, 06:01:30 PM

by Samuel Dale

The leadership election has been a disaster for Labour. It is painfully clear that we are not learning the right lessons from defeat.

The spectacle of Andy Burnham and Yvette Cooper, charging headlong into the tax credit trap set by George Osborne, giving him the opportunity to keep hammering Labour as the welfare party, shows how deep a hole we are in.

Let’s be clear.

We lost in 2015 because we had a desperately unpopular leader who was not trusted to manage the nation’s finances. That’s it.

To win in 2020 we need a more popular leader than the Tories have with our economic credibility rebuilt. If we do that then we have a chance.

We don’t need a big debate. We don’t need to talk to Jeremy Corbyn about his views on Greek debt and Hezbollah. It doesn’t matter whether Liz Kendall has no children. I am not bothered if Andy Burnham is a member of the metropolitan elite. Or whatever platitudes Yvette Cooper is pitching this week.

Instead of debating fringe issues we should be straining every sinew to prove we can be trusted in the Treasury again. We should be comparing the candidates against their potential Tory opponent in 2020.

Once you have the fundamentals right then you can try and win the election with a string of policies to attract key voter groups. But that is for another day because the only thing that matters in this leadership election is the fundamentals.

We should have had a new leader in place by June 1 after asking ourselves the simple, questions about how to win. The long drawn-out affair has proven just as damaging as it was in 2010 when Labour’s reputation was trashed by the coalition.

That’s our lesson from defeat and we are not learning it.

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Posted in Uncut | 27 Comments »

Labour must support George Osborne’s budget surplus law

11/06/2015, 04:15:30 PM

by Samuel Dale

George Osborne is fond of saying that in opposition you move to the centre while in government you can move the centre.

Ed Miliband’s disastrous attempt to move the centre from opposition is the latest example proving this valuable piece of political wisdom.

You can not change the rules of British politics from opposition but you can if you’re sat in the Treasury.

Labour built a new consensus over 13 years.

In the 2002 budget, Labour decided to increase national insurance contributions by 1p to fund higher spending in the NHS.

The Conservatives now back rising NHS spending every year.

The same is true of the minimum wage, devolution and public service reform

And so it’s happening again.

In his Mansion House speech this week, Osborne resurrected his idea to make deficits effectively illegal in “normal” economic times.

The plan is that only the OBR could approve a budget deficit and otherwise a surplus must be run. It shifts the political centre.

It’s an attempt to shrink the state and force future governments to cut spending or raise taxes if it wants to spend more.

Some in Labour argue it makes sense to “borrow to invest”, which justifies deficit spending even in good years. In simple terms it is sensible to take out a big mortgage loan (capital spending) but not a credit card (current spending).

Maybe. But the hard truth is that the economics don’t matter. With Labour’s economic credibility hole only the politics matter.

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Posted in Uncut | 15 Comments »

Authenticity is the key to Labour defeating the new insurgents

17/11/2014, 11:39:24 AM

by Jonathan Todd

Labour is about to throw away a winnable election, according to Phil Collins’ latest fiery column, because its leader cannot fathom that he needs to convince us he will take care of our money. As a consistent Uncut theme, we cannot be accused of not being forthright in stressing this need. We are eager to avoid Labour falling short in public estimation of whether the party is capable of taking the tough decisions on public spending that closing the deficit requires.

While winning economic credibility should remain a Labour priority and I’ve written in the current Progress magazine on how this might be done, it may be that a perceived dearth of authenticity, rather than economic credibility, is the most immediate cause of a heightened risk that Labour will not form the next government. The calculus of this risk is informed by the likelihood of Labour losing votes and seats to the SNP in Scotland, UKIP in the north of England and the Greens across the UK.

These parties all lump Labour together with the Conservatives and the Liberal Democrats and dismiss them as “all the same”. Labour is supposedly another chip off this venal and failing block. The SNP and the Greens unambiguously pitch to the left of Labour and UKIP go after traditional Labour supporters.

All Labourites are appalled by the idea that we are no better than the Conservatives and the Liberal Democrats and bristle at the suggestion that we have left behind working class communities and left-wing values. But the worrying reality is that the Greens, SNP and UKIP – the new insurgents – successfully trade on these terms. As well as improving opinion poll performance, the new insurgents are all thought to be attracting new members at a rate that other parties appear able only to envy.

This success would not occur if Labour were more widely taken to be an authentic version of what we self-define as: the best vehicle for the advancement of left-wing values and working class interests. Alex Massie recently compared Scottish Labour to Rangers FC. Labour claims, like those of Rangers FC, that We are the People are now not just disbelieved but mocked. UKIP are seeking to inspire a similar kulturkampf among the English working class. They peddle the notion that the party founded to represent this class no longer does, as the Greens propagate the idea that a leader who has explicitly repudiated New Labour throughout his leadership is not really left wing.

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Posted in Uncut | 12 Comments »

Labour is winning the economic argument? Pull the other one.

18/12/2013, 09:20:15 PM

by David Talbot

When the shadow chancellor declared on Sky’s Dermot Murnaghan programme that Labour was winning the economic argument, one can be forgiven for thinking that not even he believed the words he had just uttered.

He certainly hadn’t convinced the Commons the Thursday before, standing up to a wall of noise the previously iron-clad shadow chancellor delivered a puce-faced riposte that fell flat in the chamber and barely reverberated outside. Osborne, grinning and preening himself like his newly purchased cat, luxuriated in his adversary’s obvious discomfort – recognising not only the personal but the political challenges the shadow chancellor has to slay.

And, earlier today, at the year’s final PMQs, the sight of rows of silent, doleful Labour MPs, arms folded, as the prime minister ran through his stand-up repartee at Ed Balls’ expense, told its own story.

After three years of stagnation, the economy is showing tentative signs of recovery. Growth may be unbalanced and anaemic, but the threat of returning recession has been averted. A change of mood is altering the terms of political argument in British politics, and with it Labour’s much-heralded ‘cost of living’ campaign appears increasingly redundant.

To say the least, it remains highly questionable as to whether the living standards argument will enable Labour to make incursions into the electorate where the party’s appeal has so far been rather limited. The voters Labour have to win over to achieve outright victory in 2015 appear far less persuaded about its core arguments on the ‘cost of living crisis’, and are increasingly optimistic about the general state of the economy.

Labour has done nowhere near enough to address the basic charge of economic mismanagement; from the ludicrously long leadership hustings, which allowed the coalition government an unrivalled opportunity to set the political narrative for four whole months, to Balls’ stupid delight in his ‘flat-lining’ gesture, the damage has been done and is yet to be repaired. Voters may have been prepared to rethink some now entrenched assumptions about Labour’s responsibility for the economic crisis, but only if the party showed that it too was rethinking and reflecting, including being humble about its own failings.

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Posted in Uncut | 13 Comments »