The public’s fear of the future will frame George Osborne’s budget

by Jonathan Todd

It is not only Charlie Brooker who thinks the future is broken. Businesses and households do too. This is why businesses are sitting on billions of pounds. They don’t think there is a future worth investing in. This is massively economically significant, but perhaps more politically significant is the resignation of the public to their grim economic fate.

Some of the public are drowning, few are waving, and most are shrugging their shoulders. George Osborne’s biographer, Janan Ganesh, recently noted in the Financial Times: “The regular focus groups that are conducted by Downing Street paint a picture of an electorate that is bleak about the economy, yes, but so bleak that they don’t believe things would much improve under an alternative policy.”

Those that aren’t drowning, waving or shrugging their shoulders, are getting angry, which increasingly means voting for UKIP. Not as a principled stand against the EU but, as Michael Ashcroft’s polling attests, an anguished cry against the established parties. UKIP recoils, as Matthew d’Ancona accurately puts it, not from Europe specifically but from change generally.

UKIP is an emotional spasm against the political class and the inadequate modernity that they represent, as well as an insatiable longing for an unrecoverable past. While a growing minority of the electorate fall for this spasm, most are bleakly indifferent.

Allister Heath on the right would sacrifice short-term deficit reduction for a dramatic cut in corporation tax and Will Straw on the left for increased public investment. There is, though, scant evidence that the public believe that the methods of either the left or the right will make much difference. And the public might have a point.

Given the piles of cash on which businesses currently sit, Heath’s policy may only deepen these piles. Straw is right to see the cuts to public investment as the most economically damaging of those inflicted by Osborne but only rapidly “shovel-ready” projects are likely to make a difference to GDP in the near-term.

While both left and right urge upon Osborne a focus on recovering growth, not short-term deficit reduction, there are reasons to be sceptical about the capacity of the policies of the left and right to secure their shared objective. And sceptical is certainly what the public feel about the ability of politicians to improve things.

This near-fatalistic scepticism suits Osborne, so long as it doesn’t spill over into the anger that causes people to vote UKIP. In this sense, he threatens to become a later day Harold Wilson: going round the country stirring up apathy. This augers against dramatic moves in his Budget and he must surely be burnt by his too clever by half Budget of last year. Instead, my expectation is that he will reinforce some well-established and fundamental arguments:

First, there is no alternative to deficit reduction. The likes of Heath and Straw are dangerously wrong.

Second, that there is no alternative because of the past indulgences of Eds Miliband and Balls.

If only one of these arguments holds then he is in a much stronger political position than a Chancellor really should be in the present dismal economy. If both hold, then a Labour majority at the next election seems a vanishing possibility.

Labour must convince both that the future need not be broken and that we are best able to build this future. We must be, as Douglas Alexander said at a Policy Network event last year, repositories of credible hope.

What seemed, however, to gain more momentum in Eastleigh was the incredible pessimism of UKIP. It’s less a confident embrace of the future and more a desperate hankering for the past.

Given that Labour cannot expect to win by asking the public to revisit arguments about which it gave a settled view in May 2010, we need to make the economic debate about the future. This presumes that the public think there is a future worth arguing over. Yet maybe they think that the future withered in the past. And maybe they believe that this was the result of Labour profligacy.

In this context, an argument for a changed future from leading members of the last government is a difficult sell. This places a premium on successfully differentiating the present leadership from the government in which most of them served. If a highly jaded electorate is to be convinced that Miliband can lead the country to a different future then it must be thoroughly demonstrated that he has led his party to being a different and much improved entity from that which they soundly rejected last time around.

Miliband and Osborne both know that the future is valuable political real estate but not while it is broken. It politically suits Osborne for it to remain broken, even if economic recovery will be next to impossible with a sentiment that encourages households not to spend and businesses not to invest. Miliband must convince that he can lead us to an unbroken future.

Jonathan Todd is Labour Uncut’s economic columnist

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