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

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.

Well the voters have delivered their Christmas present early to Labour and it comes in the form of some dark polling undertaken by YouGov. Slipped out to little festive cheer the findings indicated that if Labour had hypothetically won the 2010 election, 42% of voters believe the economy would now be doing worse under the party’s stewardship. This is a quite staggering statistic. Revised OBR figures confirm that the fall in GDP between 2008 and 2009 was not the previously thought 6.3% but 7.2% – wiping £100bn off the UK economy. And yet just under a majority of voters now seemingly believe that if Labour had won the last election the economy would have gone on to plumb new depths.

Equally those who think that the economy is recovering has shot up nearly 30% since the Chancellor’s budget in April, whilst a majority of the public expect to be at least as well as off in a year’s time as there are now. And, crucially, as argued on Uncut, on the question of sheer economic competence Osborne has widened his lead over Balls to ten per cent. And, to finish the season’s greetings, a clear majority of voters now support cutting spending to reduce the deficit – killing at source a key Labour charge against the coalition.

The party ought to be remarkably open that it has been losing the argument on the economy for the best part of three years. It has been too content for too long in believing that deteriorating economic indicators for the Conservatives would guarantee rising political numbers for Labour. The party’s challenge is to provide a compelling case as to why Britain would be better off with Labour, and that categorically does not mean the facile equation with higher public spending to achieve social justice.

For all the huffing and puffing, and the rosy red cheeks of the vexed Balls, the simple truth went unspoken during the Autumn Statement. The Labour party has lost the economic argument. Balls, dressed as Santa last week, deep down knows that he would dearly love the present of economic credibility for Labour this Christmas.

David Talbot is a political consultant

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13 Responses to “Labour is winning the economic argument? Pull the other one.”

  1. Robert says:

    Balls was right about the Coalition’s original plan to eliminate the deficit by 2015, which meant that the economy hardly grew for three years. However, the coalition learnt their lesson and made the deficit reduction plan more realistic. This is one of the reasons that the economy is recovering.

    My opinion is that the Labour Party should say that it will reduce the deficit at a slower pace than the Coalition. It would be credible to argue that trying to reduce the deficit too quickly would be counter-productive.

  2. Renie Anjeh says:

    cont’d: ….but he can’t.

  3. BenM says:

    “And yet just under a majority of voters now seemingly believe that if Labour had won the last election the economy would have gone on to plumb new depths.”

    Perception only.

    The UK economy under Labour post 2010 probably would have fared far better than it has under Osborne.

    How easy it is for Blairites flirting with Tories to forget that Labour had led a recovery between Q3 2009 and Q2 2010 that exceeded everything Osborne had thrown at it for three and a half years.

  4. uglyfatbloke says:

    Thing is, Balls was part of the team when everything went pear-shaped and is still in denial. The crisis was not ‘all the fault of the last government’ – though Darling was getting warnings a year before it erupted and chose to ignore them – but Balls (and others) will always be associated with some fairly serious mismanagement. If he is n’t replaced it will be that much harder for Ed to win the next GE.

  5. aragon says:

    At a time of unprecedented economic stress and social injustice addressing this issue is facile! The deficit issue is facile and irrelevant, especially as the Tories have done the most to increase the debt! (not the rate of change but the absolute change).

    The reason that Ed Balls has lost the economic argument is that he has been responsible for Labour’s economic policy for decades, and he believes the Tories are right.

    How else do you explain his support for extending Tory spending plans?

    We have seen Balls before in the form of Brown’s Brain and it is not a pretty sight.

    Ed Balls has nothing useful to say on economic policy so why listen to him, you might as well stick to the devil you know.

  6. Compost says:

    Balls is an extremely dislikable person; appearing to take delight in other peoples misfortune, with his silly gestures when things going wrong/flatlining (for that, read people losing their jobs) and now when things ARE looking up, looking quite uncomfortable.

    Seriously, he has to go. He is not Labour, he is an angry nasty individual who would love it if the economy now went downhill and unemployment went up.

    Get rid of him!

  7. steve says:

    BenM: “Perception only.”


    Of course, polls can be worded/selected to produce the result that affirms the relevance of one’s preferred policies. But occasionally ‘break-through’ occurs and an unanticipated outcome emerges.

    This recently happened in the U.S. during an investigation into voter fraud*. While testing their methodology researchers found that during the last year as many people have been abducted by aliens as are involved voter fraud.

    This means that during the last year 6 million Americans have been abducted by aliens.

    In view of this polling evidence I’m hoping David will join me in a campaign to demand the establishment of an anti-flying saucer defence system. At the very least the proposal should be included in Labour’s 2015 manifesto – U.K. citizens need to be protected from this threat.


  8. john reid says:

    BenM, it’s the fact that Labour didn’t forsee the ecenomic down turn between 2005-2007, that lost us the ecenomic argument, despite however good Brown was, he made the mistake of throwing money we didn’t have at the electorate in the last year of his premiership to try to emabess the toires as he knew if they won, they’d have to cut and to try to woo voters, Balls was part of that, you can say that Blarites are sucking up t tories,by pointing out that the public don’t trust us on the economy, but it over looks the fact that the public really don’t trust us becuase of 2008-2010,

  9. southern voter says:

    Labour needs to admit it did not get it all right on the economic front while it was in power.
    It needs to be humble and show humility.Alas Balls is not the man to fulfill this role.Since he was one of Brown’s main economic henchmen.

  10. David Talbot says:


    “The UK economy under Labour post 2010 probably would have fared far better than it has under Osborne.”

    That, equally, is perception.

    Steve – get a grip.

  11. Harry says:

    The thread under discussion here is most valid and reflects a question that many people of all political persuasions are asking. As usual, these political persuasions become entrenched when considering the fairness or otherwise of the Coalition approach to the economy and so the debate continues ‘ad nauseam’ based on the ‘Labour’ may or may not have done this or bettered that, over the same period.

    The reality however, and the debate like many other political debates, needs to move on to the facts rather than the fantasy. There is no real evidence that Labour would have managed a better solution going forward than that achieved by the Coalition. There is no evidence (and neither can there be) that we would be in a better place with regard to debt, deficit, cost of living, net income, employment etc., this is pure fantasy and speculation, looking at what MIGHT have happened if an entirely different set of policies had begun three and a half years ago – that debate is so pointless, why do we waste our energy and the health of our typing fingers on it?

    So what is left to debate about the past? The only thing we can consider is how Labour responded to everything that has gone on since say 2008, allowing the red corner some leeway. Factually, Labour has not had any form of consistency in their economic argument, preferring to sit on the sidelines and criticise rather than explain what it would do differently TODAY. Yes, there have been some one-off statements such as the energy promise, but these cannot in any form be considered as an economic policy.

    Labour is no different here than other administrations by the way, both red and blue, but someone is going to have to pt their head above the parapet and start getting some form of message across, otherwise the current polling lead is unlikely to be sustained – note the word unlikely, no-one can say with certainty and we are now in a debate about the future and what might influence the colour of our next Parliament.

    It strikes me that to begin to reclaim any sense of competence, the Labour opposition has to do two things;

    1. Provide an economics team that the electorate (beyond the core labour vote) acknowledge to be completely untarnished from the past. This will not be easy, even those on the periphery pre 2010 will have guilt by association. There is almost an argument for bringing in an outside economic team – and before anyone starts asking ‘how’ this can be done, there is precedent in other Ministries if you have a look.

    2. Introduce the key planks of a radical economic policy that puts fairness at the heart of everything. And this means fair to ALL sections of society, the continual bleating about the fat cats and the bankers etc. does not endear anyone other than the core labour voter, which is not large enough to guarantee victory at an election. This will be argued as New Labour, it is nothing other than the reality of what I suspect is the majority of the electorate.

    Nobody likes a whinger, and the sheer body language of Her Majesty’s Opposition is just that. I am not sure about you guys, but I want a confident, scrupulous and honest politician, who will admit to mistakes and always seek to work in the majority interest. I don’t care what they did as a teenager, it is the current and future competence to do the job that is important, and the trust of the populous.

  12. steve says:

    David: “Steve – get a grip.”

    Well, that’s where you end up if you want policy to be polling driven. Doesn’t say a lot for your ‘centre-ground’ does it?

  13. Mike Ham says:

    In words which women will certainly understand, Labour economic policy summed up in 3 words: BALLS BEFORE BRAINS.

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