Jonathan Todd « Labour Uncut

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The big ideas of 2014 and what they mean for Labour: domestic policy

30/12/2013, 06:21:01 PM

by Jonathan Todd

Nothing says Christmas like the Prospect feature on the big ideas of the year ahead. At least in the bedrooms of geeks. Thinking about them, especially when there is turkey to be eaten and mulled wine to be drunk, is the preserve of the pointy-heads.

At the same time, nothing says unprepared like a Labour party that hasn’t thought through the implications of these ideas. Uncut is here to help. The turkey and mulled wine were untouched for long enough for us to identify and discuss the most important question raised for Labour by the pot pourri of ideas.

Prospect’s annual feature is a bit of lugubrious beast, so we deal with them in three posts looking first at domestic challenges, then international issues and finally drawing together the conclusions for Labour next year.

So, first up is domestic policy, where there are 9 big ideas:

1 Rejectionist politics

How will Labour react to UKIP’s likely strong performance in 2014’s European Parliament elections? And the election to this parliament of more nationalists than ever before?

The beltway consensus is that the anti-beltway chief, Farage, will be the big winner of the 2014 European elections. It’s virtually factored into the political stock prices of 2014. The bigger doubt is whether Farage’s stock price can remain high till May 2015.

While my suspicion is that UKIP will be back around 5% by May 2015, their strong performance in the European elections will put pressure on David Cameron, as his strategy for containing UKIP will seem to be failing. Labour should note, though, that Farage is part of a broader rejectionist trend uniting UKIP with both the Tea Party in the US and populist parties of the left and right across the EU.

This trend sees all politicians as being as bad as each other and is expected to result in more nationalists than ever before ending up in the European parliament. The only way for Labour MEPs to defeat them may be to align with Conservative and Liberal MEPs – potential validation of the UKIP charge that they are all the same.

Labour needs a strategy for the EU that is both far-sighted and imbued with popular resonance. What part may be played in this by supporting an EU referendum is a related debate.

2. Beginning of the end of QE

What’s Labour’s view on monetary policy?

Quantitative Easing (QE) is “the biggest monetary policy experiment in the history of the planet,” according to Richard Lambert, a former member of the Bank of England’s monetary policy committee. It’s an unfinished experiment of central banks in the US, UK and the rest of the EU. It seems to have averted depression. But if it is withdrawn too quickly, it may trigger recession or worse, while if it is withdrawn too slowly, it may sustain destructive inflation.

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

06/12/2013, 12:05:49 PM

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.

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The questions facing George Osborne in the Autumn statement

02/12/2013, 07:00:20 AM

by Jonathan Todd

We all live in a George Osborne submarine. Or so he wishes. Doing his work beneath the surface, emerging periodically to bestride events, such as this week’s distinctly wintry Autumn statement.

Osborne saw Gordon Brown use these set piece occasions to determine the terms of political trade. He’s equally keen to exploit his bully pulpit. He faces, though, a number of challenges to doing so:

1.) Has the relationship between economic and Tory recovery broken?

The Autumn Statement is wintry in the sense that it’s being delivered in December. The economy, however, is more mid-March. The darkest days feel behind us and something better nearly upon us.

Given this, Benedict Brogan asked a pertinent question recently: Why are the Tories not doing better in the polls?

The Todd thesis – as Lewis Baston called it – appeared to break down as soon as it was expounded. This thesis was based on a regression analysis of economic sentiment and Labour’s lead over the Tories. It was expounded at the end of October and held that for every 1% increase in the proportion of the electorate reporting the economy as doing well, the Tories would close on Labour by 0.6%. Since then, there has been a 3% increase in the proportion of the electorate reporting the economy as doing well. But, while there is some fluctuation, Labour’s lead has held firm enough to prompt Brogan’s question.

It may be that the Todd thesis will reassert itself over a longer time horizon. If economic sentiment keeps improving, growth in Tory support will eventually catch up. Less positively for Osborne, it may be that the Todd thesis has collapsed because something has happened to disrupt the causality between improving economic sentiment and growing Tory support.

Ed Miliband’s focus on the cost of living may mean that even though people increasingly feel the economy is doing well, they don’t believe this improvement will benefit them, so it doesn’t translate into Tory support. Alternatively, the better people feel about the economy, the less Labour’s reputation for profligacy may trouble them. In better times, Labour becomes a risk worth taking.

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Two impressions of Policy Exchange

28/11/2013, 07:50:03 AM

by Jonathan Todd

My two visits to Policy Exchange bookend the Tory modernisation project. Early in David Cameron’s leadership, I heard Daniel Finkelstein and Siôn Simon debate what this endeavour might learn from Labour’s own modernisation. Nick Boles, then director of the think-tank, dressed in suit jacket and vest, gave Simon some cheese as thanks for passing into centre-right territory.

Simon came not to praise Cameron’s efforts and Boles recently buried them. So hopeless is the Tory modernisers task that Boles, Cameron’s planning minister, now claims it cannot be accomplished within their own party. A more hospitable adjunct is required.

Perhaps things would have turned out differently had Tory modernisers heeded the insight that Simon gave them. He argued, essentially, that Tory modernisers were taking the wrong lessons from Labour modernisers. The Tories saw Alastair Campbell and thought that modernisation meant slick communication. Actually, it requires much more. What Campbell himself has called “heavy lifting”. Thinking through how traditional values can be applied in a contemporary context.

The values are the end, their policy application is the means, the heavy lifting builds new means to achieve timeless ends. This approach updated the revisionisms of earlier Labour pioneers, like Tony Crosland and Hugh Gaitskell. Cameron’s only fixed end, however, was to become prime minister. His lack of an animating purpose has left him seeming inauthentic and his administration bereft of ballast, easily knocked off its stride.

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Israel is like all nations and different from all nations

11/11/2013, 01:56:52 PM

by Jonathan Todd

1 December marks 40 years since the death of David Ben-Gurion, Israel’s George Washington. Yitzhak Rabin, its’ would-be Abraham Lincoln, was assassinated 18 years ago last Monday. Following the Six-Day War in 1967, during which Rabin was Chief of Staff to the Israeli Defence Force (IDF), Ben-Gurion, by then no longer prime minister, favoured returning all the captured territories apart from East Jerusalem, the Golan Heights and Mount Hebron as part of a peace agreement.

Peter Beinart last year published The Crisis of Zionism that calls for a revivified Zionism and recalls Ben-Gurion explaining: “Two basic aspirations underlie all our work in this country: to be like all nations, and to be different from all nations.”

Like all nations in providing a state for its people, a Jewish majority and homeland. Unlike all nations, as Beinart observes, in stressing: “Truly realizing the Zionist dream … required modelling various liberal or socialist principles for the world.” These principles led the Israeli constitution to commit to “complete equality of social and political rights to all its inhabitants irrespective of religion, race or sex”.

In contrast to Ben-Gurion’s vision, Israel is like and unlike all nations in ways that drive Beinart’s crisis. Like all nations in failing to fully make real these liberal/socialist principles. Unlike all nations in being the occupying force that Ben-Gurion cautioned against.

The Palestinian conflict is entangled with Egyptian instability, Syrian disintegration and Iranian nuclear capability. Iran desperately props up Assad in Syria, partly to maintain supplies to Hezbollah, which now directs 100,000 rockets toward Israel from the north. Iranian supplied weapons may again hit Israel from the south via Hamas in Gaza, if this Sunni body can be reconciled to Shia Iran after seeking an alliance with the Sunni Muslim Brotherhood in Egypt prior to them being swept from power.

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How long before the Tories overtake Labour in the polls?

28/10/2013, 07:00:51 AM

by Jonathan Todd

Conservative Home recently highlighted an analysis by YouGov that shows a shortening of Labour’s lead over the Conservatives.

In parallel, the economy has continued its improvement. It grew by 0.8% in the third quarter of this year, building upon 0.7% in the second quarter and 0.4% in the first quarter.

Are the two connected? Logic would suggest so.

The trend identified by YouGov reminded me of one that I have spotted myself in one of the trackers that they run.

Roughly once a week YouGov ask voters whether they think the British economy is doing good, bad or neither. Until 25 July, never more than 10% of the electorate answered good in 2013. Since then, never less than 10% have done.

I resolved to bring some econometrics to Uncut to look more deeply into this.

I put together two time series over 2013: one on the Conservatives lead over Labour, which was my dependent variable, and another on the proportion of the electorate who think the economy is doing well, which was my independent variable. When the dependent was regressed on the independent, the co-efficient on the independent variable was just under 0.6. The p-test indicated that the regression was accurate with more than 99% certainty.

This is telling us that for every 1% increase in the proportion of the electorate that think the economy is doing well, there should be a 0.6% increase in the Conservatives lead over Labour.

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If Labour adopts the proposals of the Fabian spending commission, it will pay the price at the next election

21/10/2013, 11:11:21 AM

by Jonathan Todd

David Cameron – as, for some reason, he is always quick to do – taunted Labour thus in PMQs last week: “More spending, more borrowing, more debt. It is the same old Labour.” On the same day, a Fabian Society commission on the future of public spending reported that Labour could spend £20bn more in 2017-18 than the government currently plans.

If Labour were to adopt the recommendations of the Fabians, then the reaction of the prime minister is all too obvious. What is, though, more important to Labour’s 2015 chances is how the voters would react.

Polling by YouGov to support the book published by Labour Uncut at party conference gives us some indication.

This polling found that if Labour were to promise to keep most of the present government’s spending plans, but to borrow more specifically for public works such as building more homes, those who say this would make them more likely to vote Labour outnumber those who say it would make them less likely by 4% (17% more likely versus 13% less likely).

In contrast, a net 4% of voters say they would be less likely to vote Labour (12% more likely versus 16% less likely) if the party rejected any public spending cuts and instead allowed borrowing to rise.

The difference between these two strategies could be the difference between Labour winning and losing the election.

The Fabian proposal seems to fall somewhere between these two strategies. It doesn’t reject entirely spending cuts – a position that our polling indicates would be likely to cost Labour the election. Nor does it only go beyond the government’s plan exclusively for certain forms of investment – a strategy that our polling sees as compatible with Labour victory.

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Ed Miliband has been lucky a leader in the past few weeks, but he’d be wise not to push it

10/10/2013, 01:06:52 PM

by Jonathan Todd

The energy companies are giving Ed Miliband the fight he wanted. Scottish and Southern Energy’s 8% price hike plays right into his narrative.

The Daily Mail created another one: a battle which made Labour’s leader the defender of family and veterans. And coincidentally sucked media oxygen out of a Tory conference where Cameron and his ministers were already struggling to respond to Labour’s energy price freeze.

Recent weeks have added ballast to the Labour strategy of making Miliband a speaker of truth to power. The claim to have “stopped the rush to war,” however, over does it. This argument founders on the rocks of Labour’s conditional support for strikes on Syria.

The moulding of Miliband as justice champion finds a better fit when he references standing up to Rupert Murdoch. Whether, however, deliberations on the Leveson report will reach the outcome that Miliband initially insisted seems doubtful. And whether voters are still paying attention is as uncertain.

The energy firms and the Daily Mail have, therefore, been important contributors to the muscular Miliband that he is building. It might be thought lucky that the energy firms provided the angry response that he sought. And while no one would wish to see relatives pilloried, the Daily Mail brought about a situation in which Miliband was the voice of the mainstream, as everyone would defend their dad.

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There is a simple Tory response on energy prices and Labour needs to beware

30/09/2013, 09:42:23 AM

by Jonathan Todd

Ed Miliband provided answers to some questions posed by Uncut in the book we launched at Labour conference. Less so, others.

We asked where the money will come from. He committed to 200,000 extra homes a year without – unlike David Talbot’s chapter in our book – making clear from where the extra public resources needed to deliver this will come.

Miliband did tell us where the money for his promised energy price freeze will come from, the companies themselves. It is an imponderable whether this will result in reduced profits for them or diminishment in the green investment that Miliband treasures.

It is clear, however, that without the costs of this investment, there would be greater scope for lower household bills. Whether this investment will sufficiently dampen the impacts of climate change to justify its hefty cost is another imponderable.

The incoming prime minister of Australia is among those who doubt it. The prime minister of this country will have noted this and knows that reducing the green push will increase the scope to minimise household bills before May 2015. If Cameron were to take this option, the energy firms will align with Cameron, as both leaders would be telling them to reduce prices but only one would be enabling them to reduce costs – assuming Miliband remains faithfully green.

The public may see their bills fall before 2015 – a record of delivery for Cameron, potentially to sit alongside a steadily improving economy. Rather than return him to office, the public would be asked to vote for a freeze in energy prices by a Labour party likely to be enamoured by the green lobby but less so by business, at least big business.

Miliband needs to get on the front foot about the assistance he has offered to small businesses, while considering exactly how wedded he is to imposing green costs on energy firms. Unless these small businesses become Labour advocates, the party risks being painted as anti-business. Without some flexibility on green costs, Miliband may risk Cameron achieving more on lower energy prices before he is even in a position to implement his freeze.

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Exclusive Uncut poll shows Ed Balls’ position on spending is a vote winner – but we must be ready for the inevitable Tory attacks

23/09/2013, 07:00:48 AM

by Jonathan Todd

Much has happened since early June when both Ed Balls and Ed Miliband made speeches intended to show they can be trusted with the publics’ hard-earned money. Miliband has launched a far-reaching party reform, upsetting some, and disappointed others in his handling of Syria.

As Damian McBride’s memoirs revisit old battles, Miliband does not lack for contemporary ones but in the fog of political war he must remain focused on the economy because this is where the result of the next election will be decided.

There will be many at Labour party conference who wouldn’t welcome a belt tightening message. They’ve heard Nick Clegg deliver free school meals. They’ll want promises of goodies from Miliband too.

Miliband should tune out these appeals and tune in Don Draper. “If you don’t like what is being said, change the conversation”. The economic debate has been stuck on the deficit throughout this parliament. The cost of living is more fertile terrain for Labour. But the Conservatives retort that Labour, with its profligate ways will drive the economy into the debt ditch, squeezing households in years more of recession and austerity.

The conversation won’t be changed till this Conservative claim is rendered absurd. This means the June speeches must not be the end of Labour attempts to build fiscal credibility but staging posts. Promises of largesse to please the faithful in the hall are not what’s required, we need reassurance for those at home who will be paying a little more attention to Labour this week than usual.

These voters want Labour to demonstrate that the long, hard road of the past half-decade can end with something different and better. Miliband should focus on such a future, not refighting past confrontations. Not only with McBride but also the 2010 general election and the “emergency” budget that followed.

Labour was right to warn that this budget went too far, too fast but so entrenched was the perception of the party’s profligacy that nearly half of voters, according to YouGov, then blamed the previous government for these cuts. 9 per cent more still do so than blame the incumbent government.

If Labour were to promise, as seems likely, to keep most of the present government’s spending plans, but to borrow more specifically for public works such as building more homes, polling for Labour Uncut by YouGov reveals that those who say this would make them more likely to vote Labour outnumber those who say it would make them less likely by 4 per cent (17% more likely vs 13% less likely).

In contrast, a net 4% of voters say they would be less likely to vote Labour (12% more likely vs 16% less likely) if the party rejected any public spending cuts and instead allowed borrowing to rise.

This could be pivotal at the election. Although 55% say it would not change their vote (either for or against Labour), a 4% rise or fall in Labour’s vote could be worth upto 52 seats in 2015 (source: UK Polling Report Swingometer with a 4% increase in Labour’s 2010 vote share) and be the difference between Labour becoming the government or remaining in opposition

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