We fell into a trap. The CSR saw us out-thought, out-spun and out-positioned. First casualty of Osborne’s cuts: the Labour party.
There will be others. Those set to lose their jobs, their benefits, their housing. We will weep for them. Some of us will march for them. Though, wisely, not our leader. We will rage at the injustice.
It will achieve nothing. Neil was right. He has got his party back. A party of protest, not influence.
Wednesday was a slow motion car crash. For months people have been warning that our failure to articulate a coherent position on deficit reduction would cost us dear. Dismissed as siren voices, they were ignored. So we drove, unblinking, into the wall.
Oh yes, there will be a reaction. The bite of the Tory cuts will prove even worse than the bark that heralded them. In the short term the polls may reflect this. Grant us comfort.
It will be false. Those Labour MPs who sat in the chamber know the truth. “It was a disaster”, said one, “they routed us”. “We haven’t got a line or a message”, said another. “The Tories have been arguing that the deficit is our fault and the cuts are necessary. And they’ve won”.
Ed Miliband’s grim face on the front bench told the story. His performance at PMQs immediately before the statement bound and embossed it. “To be honest he was awful”, said one MP who had supported him in the leadership election.
Thank God for Alan Johnson. Stuck behind the wheel when the brakes failed, he minimised the damage. But poise and humour are no substitute for a strategy or a policy. He had been sent into the chamber with neither.
Thank God, too, for the indiscipline of the Conservative back benches. Those MPs who waved their order papers resembled the mob cheering Madame Guillotine. We must remind their constituents of the roars that greeted the fall of the blade.
But we cannot ignore the fundamentals. We are the wrong side of the argument. And it is an argument that will define politics in this country for decades.
Our attempts to get to grips, in political terms, with deficit reduction have been tragi-comic. First we had the Balls plan. Then the Darling plan. Then we tried to muddle through the election with a fusion of the two. The Ballsing plan.
Post-election, it got worse. Ed dumped his own strategy for a new one. Balls Plus. Or was it Balls Lite? David Miliband tried to stick with the plan that had just taken the party of a cliff. It did the same for him. Ed Miliband, who wrote the manifesto, junked the whole lot until after the leadership election.
Which brought the Johnson plan. But was it Johnson’s plan? Ed is an economist, we’ve been told. He will have his own ideas.
Then we tried to get cute. We’ll go for deficit reduction. But different deficit reduction. Theirs will undermine growth by suppressing consumer demand through spending cuts. Ours will be achieved by tax rises. Which won’t suppress demand. Ignore the cries of the business community. What does M&S know? We will get a sensible split of cuts versus tax. 50:50. Or maybe 60:40. 70:30 at a stretch. But definitely not 80:20.
Meanwhile, the Tories have been deploying the same cold, calm message. The deficit is Labour’s fault. We will cut it. The cuts will be painful. But the cuts will be fair.
We have ignored the golden rule of opposition. Make difficult choices the government’s problem. Not yours.
In fact we’ve stopped acting like an opposition, and taken up a new line in economic Tarot reading. “The government’s plans will push us into a double dip recession” – Ed Balls. “The Government’s announcement will make a million people unemployed’ – Angela Eagle.
And what if Osborne doesn’t turn over the Grim Reaper? The economy staggers on with marginal growth. Unemployment ‘only’ goes up by half that figure. Our bold predictions will make the axe man look like a skilled surgeon.
We’ve rolled the dice. Instead of neutralising the reduction issue by aligning ourselves with the net Tory deficit level and timetable, we’ve bet the house on fiscal meltdown. Our already battered reputation for economic competence is now inversely fused to the Tories. What should have been the greatest gamble of David Cameron’s political career has become Ed Miliband’s.
Come on. We know how this game is played. Match their overall spending totals, and hit them over priorities within that framework. At the same time ensure there are no uncosted spending commitments.
What are we doing? Giving the impression we want to die in the ditch for every last Sea Harrier, millionaire’s child benefit payment and pint of student snakebite.
We have avenues of attack. The inherent unfairness in the balance of cuts is clearly one. But that will not resonate until we are seen simply and unequivocally to accept that cuts are a harsh necessity. Only 25% of the public regard our stance on the deficit as credible. Unless we bridge that gap, none of our charges will resonate.
“We’re telling people we support cuts”, one Ed advisor told me on Wednesday. Yes, but they’re not listening. And they’re not listening because while our lips are saying one thing our posture and body language are saying something else.
Ed Miliband was right. We should not be exuding indignation. We should be expressing humility. Whether the deficit was our fault or the bankers’ is politically immaterial. It happened on our watch, and in the public mind we are culpable. They told us that in the general election. We should stop trying to dispute that judgment, admit mistakes, and move on.
We should also call the Tories’ bluff. They have claimed that their cuts are actually below the level we advocated. Fine. We should accept that figure and challenge them to explain how, in that case, we are being reckless over the national debt. If they want to turn us from deficit doves into deficit hawks, let them.
Finally, we should do as Ed promised. Let’s start welcoming some of their measures. If the Tories want to build aircraft carriers without planes, why do we care? Bring the tanks back from Germany. As Tory grandees march through the lobbies, beating Britannia’s swords into overseas development grants, we should line the lobbies chorusing “this way for weak defence”.
On Wednesday we were crushed. It was humiliating. But we have still only lost the first battle. The war against the cuts will go on. It will be one of attrition. Fought yard by yard. Next time we make contact our generals must be ready. Our enemy will take no prisoners.
Dan Hodges is contributing editor of Labour Uncut.
Tags: CSR, cuts, Dan Hodges, deficit, Ed Miliband
Sorry Dan, but I think you are hugely overstating this and are guilty of looking at it from a purely political perspective. Those PMQs will rank as probably the least significant in a generation. No-one cares about the questions before the CSR, they care about the response afterwards. This response doesn’t come in the Chamber – how many people will have actually watched the CSR live – it comes in the analysis and it’s already happening.
It comes in repeating the independent analysis of the IFS and challlenging Clegg and Cameron on why they suddenly dismiss it. Why has the head of the IFS been appointed to the OBR if they produce “distorted nonsense”? Do they back the OBR now, or not? Why did Clegg lie about the Pupil Premium? Why are the banks getting a £2.5bn levy which will be largely offset by a corporation tax cut? Why are families paying more than the banks? Why are the disabled being targetted while the rich stroll on?
At this stage, we don’t need a complete alternative CSR in our pockets. People simply need to believe that we are on their sides. Behind it must be a plan that focuses on growth, that has the answers on debt interest (higher as a proportion of GDP under Thatcher), that explains as John Denham did last night why we spent money – that we spent to protect jobs, houses and families. The Tories will look callous in contrast.
We can skip over the bits we agree with, but we must show that what drives us is concern for ordinary people, not the economic madness of an economic policy bound to the arbitrary limits of a parliamentary term. Our goal should be to break out of the straight-jacket of percentages and dates and look at the reality.
The economy is people’s lives, not numbers. Our response must be a human one and if this means letting the Tories bask in the savage glow of the CSR, then so be it. The truth is, our approach is by it’s nature theoretical – we have the advantage of not needing to implement our plans. The Tories / Libs alone will be responsible for their actions now. We can’t influence the outcome of the cuts anymore. We must remember we are an opposition and the role for now is not to look like another austerity government in waiting.
Labour’s prize must be to be seen as back on the side of ordinary people, who, when vague billions become homelessness, poverty, unemployment and misery, feel they have a powerful champion. Let them fight the battle of numbers, we must fight the battle of humanity.
“Giving the impression we want to die in the ditch for every last Sea Harrier, millionaire’s child benefit payment and pint of student snakebite.”
Carry on. 🙂
I was going to comment on this, but it all got a bit long so I’ve posted it on my own blog here:
http://nevertrustahippy.blogspot.com/2010/10/labour-and-csr-tactics-and-strategy.html
Would it be beyond you to say something supportive now and again? We’re polling a vote share 38% larger than our performance just six months ago, before real frontline cuts have bitten. At this point in time, the “give them enough rope” strategy is exactly right, we shouldn’t make this a fight between the Tory cuts and a specific alternative, but between the Tory cuts and the fact that alternatives exist in principle.
“On Wednesday we were crushed. It was humiliating.”
For a crushing humiliation we seem to have come out of it rather well, not least because I haven’t seen any analysis anywhere in the media which agrees with you (would be happy to be corrected on this). Some criticism of Johnson’s response, sure, calls for an alternative plan, yes, but nothing so vehement as your comments above.
The recent polls show the gap between us and the Tories is within the margin of error and also shows that the public agrees the cuts are going too far too fast. The media coverage of the CSR has been fairly critical and is getting increasingly so with the IFS analysis. The Tory attack line (which you appear to share) that Labour do not have a sufficiently detailed alternative is becoming more muted as attention focuses to the implementation of the cuts. The argument that the Tories are actually cutting less than Labour would have has already been refuted by the IFS among others.
I think we’re doing OK. There is much more to do, of course.
This comes about because the very essence of New Labour was incompetence and self aggrandisement. To have a Shadow Chancellor who is an economic illiterate and whose most memorable Commons performance was mocking science to cheers from his backbenchers is typical – Hodge – Children’s minister, Kelly Equalities, Brown Chancellor, Bully Balls Schools etc
Even my mates in the Militant/Socialist party know you resist the cuts by NOT playing the where will we/would you cut game. Labour are already in danger of showing why long term Govt’s need 2 defeats to face the truth. They have no faced the reality of their support for torture, war and locking children up. They have not faced up to the economic incontinence and incompetence of Brown – honestly the conversion to Keynes out of power is a wee bit opportunistic to say the most.
The response is simple that making half a million unemployed is a risk and a throw of the dice and that the finances will not improve significantly (5 Bn in interest on a debt of 1.3 trillion) over a parliament and that whilst long term we have to re-position and re-configure the economy and public v private sector this is not helped or done with a 6 month review and un-thought through cuts many of which will prove counter productive.
My final piece of free advice is for us on the left to drop the morality it switches people off. After all if people cared about morality no one would have voted for Labour in May.
Pretty strong stuff, but necessary. the Labour party has to attone for all it’s misdemeanors.
Didn’t labour fix the contract so that it actually works out more expensive to cancel the order for aircraft carriers? another labour mistake among many I’m afraid
Gregg: If you look, I agree with you on the IFS attack. That should be our line. I also agree we don’t need an entire CSR. But we do need to neutralise the deficit reduction issue, so we can focus on cuts, which is our strongest ground.
Anthony: …up the CSR…
Paul: …I’ll get back once I’ve read it…
Old: …I’ll say something supportive when I support it. I think our CSR positioning is disastrous. Sorry.
Simon: …”we seem to have come out of it rather well”. A brave statement, my friend…
Jonathan: …not too sure how to respond to be honest…
The problem with overthinking things is that you sometimes completely miss the point.
Our people, you know, the ones who voted for us and who are represented by Labour MPs and Councillors up and down the country, are going to be savaged by these cuts. Sometimes it is not about triangulating so that we can appeal to the ultimate swing voter, whoever she is. It is about standing up for what is right and what is wrong.
And there is a chance, believe it or not, that a sufficiently vocal opposition could possibly embarrass enough Lib Dems into not supporting some aspects. Some of the most vulnerable can therefore be protected – isn’t that why we are Labour?
Dan, I’m not sure I could agree with you any more. You’re spot on. Ed at PMQs on Wednesday was a sure sign we were in for a pounding. We’ve looked idiotic over this, almost to the point that to outlookers it will look we are just hiding and hoping it will go away. Disastrous. It is also a very stupid and dangerous ploy, we cannot assume the coalition will throw away voters, we need to show some iniative to get them back. Granted it is early days, but I’m not blown away by the start we’ve made.
…Joe, 29% voted for us at the last election. There just aren’t enough of ‘our people’ at the moment…
“Come on. We know how this game is played. Match their overall spending totals, and hit them over priorities within that framework.”
This is nonsense. That was our line when the Tories wanted to suggest we’d massively increase taxes and spending. That was the Tory line when they were afraid of being tagged as Neanderthals.
When they’re acting like Neanderthals, you don’t match their spending totals. Hostility to cuts is literally our only selling point right now. If we say we’ll impose the same cuts, just to different departments then we lose our only popular economic attack.
Yes, we need to be thought credible on the economy. But we can do that in other ways than backing cuts to avoid being thought of as weak. The Tories will call us deficit deniers anyway, and it’ll validate their charge that the need for cuts is our fault.
We need to accept a level of cuts that’s reasonable, spell out which bits we’ll accept of the proposed cuts and oppose the rest absolutely. Come out against the cuts for students and the disabled – we need the student and parent of students votes and nobody is in favour of picking on the disabled. Pick up some of the absurdities, like Osborne suggesting that those in work can’t afford flats until they’re 35. Accept other cuts and perhaps suggest a slight cut in JSA to pay for restarting the Future Jobs Fund.
Most importantly, propose a much bigger tax on banks. They’re the only people who are likely to take more blame for the crisis than we are. Make the Tories defend them.
Calm down, firstly PMQs was a non-event and didn’t even get any airtime. Accepting Osborne’s madness isn’t the answer because for one is total madness, polls show a majority of voters want slower deficit reduction. Also, accepting Osborne legitimises Clegg’s flip-flopping.
Labour needs to get quicker and stronger at rebutting the coalitions lies, Tim Farron was on telly telling voters how nasty bankers were milking us with debt interest and Andrew Neil shot the fucker down in flames by pointing out most of our debt is owned by ourselves. Why aren’t Labour shadows making these points? Debt interest payments are lower than in 1997, our national debt is lower than France, USA, Japan. The government spends £120m in debt interest a day but ~2000m in a day in total.
Edward: “That was our line when the Tories wanted to suggest we’d massively increase taxes and spending”. They still want to do that.
Chris: Labour Shadows are making those points. No one’s listening to them.
Dan, part of the reason we only got 29% was because a lot of ‘our’ people didn’t vote for us. That’s why we saw a fairly uniform swing. That’s why we cratered in South Yorkshire as well as in the south. Because our voters abandoned us or just didn’t bother to vote.
We can’t win just by getting back the core vote, but it’s a necessary component, because even in swing seats the core vote is the bedrock we have to add the swing voters to.
Edward,
I agree. My argument is that our current stance on the cuts/deficit reduction will ultimately damage our support amongst both our core vote and wider elements of the electorate.
Our failure to come up with a coherent line on deficit reduction will hurt us amongst the 70% who voted for other parties. Our failure to manage expectations on cuts will hurst us amongst our core vote.
If we spend the next 2-3 years urging our base to ‘fight every cut’ when it comes to the election we will have a choice. Pledge massive spending increases. or concede we will not reverse the cuts we have just been opposing.
What will be the reaction of the wider electorate to the former, or our base to the latter?
‘We should also call the Tories’ bluff. They have claimed that their cuts are actually below the level we advocated. Fine. We should accept that figure and challenge them to explain how, in that case, we are being reckless over the national debt. If they want to turn us from deficit doves into deficit hawks, let them.’
It’s not true though. It’s been thoroughly debunked by the IFS.
Nonsense, we don’t need a fully worked out plan. When a man is driving over a cliff, we don’t need to tell him that if we were driving we’d take the B2407 and turn left at the Black Swan. We need to tell him he is doing something ill-considered and he should stop before he causes some serious damage.
We need to go over the csr with a policy analysts head on. Will the measures set out actually achieve what they are supposed to? Will the cuts actually save any money? There are huge holes in the coalition plans. Let’s point at them.
I’m not saying fight every cut. But you have to fight most, because whilst you need to be credible, if credibility comes by hanging out your natural supporters to dry then you’ll reap no benefit of it.
Especially as plenty of our natural supporters believe politicians don’t do anything for them and so don’t vote. Dropping another 10% of DEs out of the electorate is hardly going to help our position, so there are solid electoral as well as moral reasons to pick some firm lines in the sand.
@Dan
I can’t hear Labour shadow’s saying much. Why aren’t Labour on the telly attacking, deriding the idea that Britain is bankrupt and blaming the tories for talking down the economy by saying as much.
I agree Ed needs to set out his vision and economic plan for a recovery that is sustainable economically, socially and environmentally.
I agree with this article. Further, I have read the IFS report and also the report from the Institute of Economic Affairs (blog). The IFS comes under some criticism for the methodology they used by the IEA who believe they have walked into a trap of its own making by equating progressive change to tax and benefits with fairness. The report gives greater detail and is well worth a read. Sadly, I am of the opinion that on this occasion the IFS report is distorted as Nick Clegg stated.
I very much agree with you when you state that the current stance on deficit reduction is damaging. I am absolutely furious every time I hear a Labour MP complaining about a cut without any acknowledgement that the last government made political decisions which affected the structural deficit. Peter Mandelson mentions this in his book too. I am also angry at the strategy to undermine the Lib Dems which actually makes me want to vote for them!!!. It is all disheartening and as you say a party of protest rather than a government in waiting. I am not coping with it – I am now using the mute button as I can forecast what individuals will say when interviewed. I thought our response to the Chancellor was dreadful too. Being an astute political operator (and a lovely man) is no good – we need a strategy. All I am getting is soundbites from the leadership and it is wrong.
You are right – I am questioning my support………..
Greg (and others) “It comes in repeating the independent analysis of the IFS and challlenging Clegg and Cameron on why they suddenly dismiss it. Why has the head of the IFS been appointed to the OBR if they produce “distorted nonsense”? ”
Beware, this was a single analysis and there are plenty that favour the CSR and have a more balanced way of anaysis than the IFS. It wasn’t “suddenly dismissed”, it was merely highlighted that perhaps other factors could be included or you get the situation where, as published elsewhere, you could double all income to these poor familes but cut their benefit by 1% and it is still “regressive” under the IFS parameters.
Labour should consider themselves lucky that the media is playing the role of opposition.
Dan
I’m a Coalition supporter but voted labour in 1997, so I’m a potentially available vote. Your article provides the most realistic and grounded argument I’ve heard from Labour. I’m balanced enough to recognise that the recession wasn’t entirely Labour’s fault, but I also recognise that governments exist to protect citizens from evil bankers and yet Brown knighted the worst of them – Fred Goodwin. Labour will not be credible in my eyes until they undergo a catharsis, demonstrate some contrition, acknowledge that you cannot abolish the business cycle and that a responsible government must prepare for the worst and retain control of the nation’s finances. Fighting every cut demonstrates exactly the opposite. Not only that, some cuts are actually popular. There is no question Labour wasted money. It may not have cost that much, but why does any government department need a contemplation suite? In opposing every cut, in showing no contrition, Labour is implying that it wants a return to the status quo ante. That may suit the base, and it may suit the Quangocracy, but it sure as hell riles the rest of us. The other aspect of positioning that is worrying from Labour is the anti-private sector rhetoric. The private sector is not the same thing as the banks. The private sector is taxi drivers, factory workers, hairdressers, call-centre workers, shop assistants, building labourers, engineers, manufacturers and small businesses. We’ve taken an absolute pummelling. I have had a pay freeze since 2007 – a real terms pay cut of 15%. There were no vociferous Union types or Labour spokes-people standing up for me in the media, nor the 20 million others like me. The private sector doesn’t just consist of evil, howling, moneyed-up, spivs. It’s ordinary people, struggling to get by. When my pay is cut and my taxes rise, and I see Labour defending the concept of spending money on contemplation suites it makes me feel sick. Labour have a long way to go.
Mike: I don’t care if it’s true or not. The Tories have presented us with an opportunity, Let’s grasp it.
Nordelius: Actually, I think we need to go over the CSR with a political analysts head on.
Edward: “I’m not saying fight every cut”. But at the moment, every time a cut is announced we are fighting it.
Chris: Our shadows are saying a lot. No one is listening.
Jane: Question our strategy, but not your support.
Span: Our luck will run out.
Just to pick up on one brief point, it’s impossible for anyone to claim with a straight face and half an idea about fiscal policy that the deficit is the fault of bankers. The deficit is the sum of government spending per annum over and above what it takes in tax, nothing more, nothing less. This is not a matter any banker has responsibility for.
You could argue that the reason why the deficit has become an urgent problem is because of the massive increase in overall debt taken on as a result of the policy of bailing out the banks, provided you are prepared to demonstrate that a) the financial crisis was primarily the responsibility of bankers, and not politicians for creating an over-burdensome regulatory system predicated on the false assumption that it’s possible to prescribe a set of rules that, when followed to the letter, will guarantee that there will be no possibility of a financial crisis (and yes, I know lefty conventional wisdom says the problem with the regulatory regime was that it was too light – but it’s wrong), and for cheerleading the Bank of England into setting interest rates far too low for far too long, creating the asset price bubble in the housing market that caused the problem in the first place, and b) bailing out the banks was a good idea – but you can under no circumstances argue that the deficit has anything to do with bankers whatsoever.
@Jane
Seriously, your quoting the IEA as evidence for the IFS’s failings! Ones a highly respected non-partisan think tank the other is for Thatcherite head bangers and run by an ex-LibDem funnily enough.
“I am absolutely furious every time I hear a Labour MP complaining about a cut without any acknowledgement that the last government made political decisions which affected the structural deficit”
If we’d immediately slashed spending in 2008, like Ireland did, we have had a much deeper and longer recession; possibly even an actual depression. Deficits added to the national debt during downturns are paid off during upturns, the government should be reducing the deficit by encouraging growth not using this crisis as an excuse to carry out their ideological aims.
“I am also angry at the strategy to undermine the Lib Dems which actually makes me want to vote for them!!!”
What?! They’ve been eating into our base of support for years, its about time we stopped ceding voters to them.
Dan Hodges says:
October 24, 2010 at 1:51 pm
Mike: I don’t care if it’s true or not. The Tories have presented us with an opportunity, Let’s grasp it.
Chris: Our shadows are saying a lot. No one is listening.
Dan, you’ve stated exactly Labour’s problem & the reason for it in these 2 brief responses.
Problem: No one is listening. Reason: You don’t care whether it’s true or not, it’s an opportunity, let’s grasp it.
Labour’s been at it for years. To start with, people believed you. The build-up of lies took its toll so they stopped listening to you. Labour’s still at it: look at the stink raised about Mr Duncan Smith’s mention of Merthyr Tydfil. Yet anyone with internet access can view the clip for themselves. Result: the credibility gap widens.
To regain credibility, what you say has to be true, and it always has to be true. If it’s not true, it’s just another opportunity for you to hammer yet another nail in the Labour coffin.
Please allow me to give you a hint as to why Labour have been out-thought on this. I am not a Labour supporter, but it might improve politics if more people take take this on board. The key to good management is objectivity and seeing things as they are. Labour has relied for too long on twisting the facts and deploying spin and many people who might otherwise have been sympathetic to the party’s broader objectives have seen through either (a) the dishonesty of Blair, Campbell & Mandelson and many others or (ii) the incompetence of most of the rest of the last Labvour administration.
The voters aren’t stupid and they can easily compare politicians with other people that they meet at work and elsewhere and see a benchmark against which to judge the competence and more importantly balanced judgement of politicians.
The voters know that it isn’t possible to spray money around and pass the bill to our grandchildren. And they can see that there was no objective jedgement of what had to be done.
Saying that our national debt was only X% of GDP while others was Y% didn’t cut any ice because our debt was growing at 15% of GDP per year.
Saying that we should tax the rich more doesn’t work because if we confiscated all of the assets of all of the billionaires in the UK, we would plug even 50% of one year’s deficit, so taxing their income at a higher rate would hardly make a dent in this year’s deficit let alone next year’s.
The Coalition government may not fit anybody’s political ideology, but they will win respect and probably voter approval (although that can be very fickle), because they are clearly aiming to do the right thing for the country.
Hello, visitor from ConservativeHome. Thanks, Dan. You sum it up nicely.
“Ed Miliband’s grim face on the front bench told the story. His performance at PMQs immediately before the statement bound and embossed it. “To be honest he was awful”, said one MP who had supported him in the leadership election.”
He was awful, I feel sorry for you lot, and I’m a Conservative!
@Fran
Yawn, go away you ugly troll.
Dan, I’m not a natural Labour voter, I followed the link from Guido.
A brave piece, thoughtfully written and to be honest, words that needed not only to be said, but also inwardly digested and acted on.
A little humility goes a long, long way.
Just on a point I’d fact – Labour decommissioned the Sea Harriers, leave the fleet with no air to air capability to defend itself. The Harriers being removed now are ground attack aircraft.