Posts Tagged ‘spending review 2013’

Labour is headed for trouble in next week’s spending review

18/06/2013, 04:30:24 PM

by Atul Hatwal

Next week, George Osborne will finally spring his long prepared spending review trap.

Here is the chancellor’s basic choreography: the Tories announce an eye-wateringly tight spending round, Labour opposes and the Tories attack Labour for being unreformed spendaholics.

Alternately, Labour back the government’s spending plans, in which case, the Tories attack Labour for being reluctant converts to fiscal responsibility and, as a happy sidebar, Labour’s Keynesian prescription for boosting spending to revive the economy is effectively de-funded.

Either Labour play to the stereotype of profligacy that lost the last election or become me-too Tories.

Ed Balls’ big speech a few weeks ago was intended to unpick this problem and re-position the party. The commitment to aggregate Tory spending plans covered the party’s fiscal flank while Ball’s retained the Keynesian differentiation with his £10bn capital spending boost, funded through increased borrowing.

On paper, it went some way to neutralising the chancellor’s likely attacks.

But there’s a problem.

Now Labour has shifted to a more politically realistic position on spending, it needs to robustly assert this new line.

It needs to use every opportunity to publicise the  new approach. To make the progressive case for adhering to overall Tory spending totals (while having different individual priorities) and ensure the public knows that a major change has just taken place.

Otherwise, next week, the Tories will hammer the party for running scared of its own policy. They will paint Labour as insincere and irresolute on spending. The taunts about whether Labour believes what it says will turn the party’s economic drama into a political crisis of leadership.

For the public, the net result will be little different to if Labour hadn’t changed its fiscal stance. Perhaps worse, when taking into account the collateral damage to Ed Miliband’s personal ratings from any squirming on policy.


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Labour is losing the fight for the political narrative

12/06/2013, 04:38:45 PM

by Sam Fowles

Ed Miliband’s “party of work” rhetoric may have stuck an important blow in the battle with the Conservatives but he’s lost a march in the war.

At first glance last weeks economic policy speeches from the Eds (Balls and Miliband)  set out sensible policy and may even go some way to helping Labour win back our lost “credibility” on the economy. But only at first glance. While the desire to remove Cameron and co from office at the earliest possible opportunity (and by any means short of a military coup) is understandable, it’s mistaken. Miliband’s speech was an attempt to gain economic credibility on Tory terms. And, as any good general knows, you never fight a war on the ground your enemy chooses. Ask anyone who’s invaded Russia.

By buying into the Conservative’s narrative Miliband risks creating a situation where economic credibility only ever means one thing. And, worse, leaving the Conservatives to decide what that thing is. He’s surrendered control of the narrative and that is political suicide, perhaps not for himself, but certainly for his party.

This Conservative party has pursued two distinct and important narratives.

The first is that economic credibility means cutting in the short term. It doesn’t matter that this policy has actually failed in its stated goal of bringing down the deficit, what matters is the electorate believes that cuts = responsibility.

The second narrative is a classic tale of the “internal enemy”. In this case there are two: the unemployed and immigrants. Again, it doesn’t matter if either of these actually are a threat to the “hard working people of Britain”. What matters is that the electorate believes they are and thus turns to their friendly neighborhood Tories for protection. Putting immigrants aside for the moment (and how I wish the press would), by trailing their economic policy by telling us what they’d cut and defining themselves against those “who refuse to work” the Eds have indirectly bolstered both of those Tory narratives.

And the thing about a Tory narrative is: it’s always going to make the Tories look best.

Allowing one side of the political spectrum to dominate the narrative means the political debate becomes about perception rather than truth. Margaret Thatcher is talked of as a model of fiscal responsibility by both the left and right. Yet she squandered billions in North Sea oil revenues on a short term tax cut rather than securing the long term economic strength of the country by investing it.

Why is she not ridiculed for so dramatically putting ideology before country? Because her party told us that cutting spending equals fiscal responsibility and she cut spending. Then they kept telling us the same thing in the face of all contrary evidence and eventually Labour stopped arguing.

The internal enemy narrative is a classic ploy for right wing parties. When we feel threatened by forces within our own community we look to protect ourselves and our families in the short term and thus turn to conservative parties.


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It’s not the despair Ed, it’s the hope

12/06/2013, 10:20:06 AM

by Rob Marchant

So, a week in which, to the great surprise of practically everyone, last week the two Eds came up with a set of policy announcements – or at least, position statements – to “get their retaliation in first” in advance of the government’s spending review. U-turning on a range of issues which they previously stood up for since January 2010 when they first formed their leadership tag team. This could just have been the week when history will remember that it all changed.

Could, not necessarily will, as we shall see.

But good things: child benefit, for example, where Balls has finally accepted the self-evident reality that if he does grant it to rich people, he will have to find a couple of billion from somewhere else, something which will hurt much more. Or the pretty-much-confirmation, by Ed Balls to Andrew Neil, of adherence to Tory spending limits, something which, ahem, Labour Uncut suggested two years ago.

The thing is, we should all be delighted. At the very least, it looks like Labour are finally getting serious about winning, they have paid attention to the polls showing that it’s not where it needs to be, as well as the election results which backed them up. It would, really, be entirely churlish to be critical at this point.

So, as regards the rest of this piece, the nice people can go home and you others, this one’s for you: all you churls out there.

One criticism is that, although the symbolism of the change is hugely important, the change itself doesn’t necessarily go far enough and is flawed in places (such as the house-building programme, as John Rentoul argues here). There are plenty more areas where things need to change.

But, fair enough, it’s a start. As the veteran MP – and welfare specialist – Frank Field brilliantly put it: “Today Ed Miliband said ‘I’m in a hole and I’ve stopped digging’. He’s now got to get us out the hole.”

The second is simple: that this may just be too little, too late. If this is the turning point, it comes more than two-and-a-half years into a parliamentary term. In other words, we now have less time to spend changing people’s perceptions than the time we have already spent letting them form the wrong ones. It will be hard. But it is possible.

The third is: do they really believe in this stuff, or are they just saying it because they think it’s what people want to hear? If they don’t truly believe it, they’ll convince no-one in the long run. Hopi Sen generously extends his belief metaphor to include the coalition as well, but it’s clear who’s the least likely to be believed:

“…with the best will in the world…any British politician standing up and swearing fiscal responsibility is, at best, like a reformed alcoholic declaring teetotalism. Even if you believe their sincerity, you don’t want to give them the key to the drinks cabinet, just in case.”


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At last, some Labour pains

10/06/2013, 07:37:34 AM

by David Talbot

Labour might still easily lose, in 2015, an election it really ought to win. If that is indeed what happens, the reason, as so often with the Labour party, is that it will have operated in the world it so dearly wishes it to be, rather than the cold, rather more sobering, reality.

It will be because it didn’t understand what voters told it in 2010. It will be because unveiling daft posters, available, incidentally, at the not very One Nation price of £35, and talking of the “same old Tories”, lamenting their cuts and their rich friends, is far easier than undertaking a soul-searching examination of why the party was so comprehensively buried in 2010. It will be because it preferred to spend time in the seminar room, talking to nobody but itself, pontificating wildly on the politics of Neverland. This will be, as always, most soothing for the Labour movement. It will have its high-mindedness, and its piety, and it will lose.

The Labour party cannot win in this state of deluded comfort, revelling in the opportunities for moral indignation that austerity affords, whilst simultaneously saying nothing of note to the nation.

If there was a pain-free option, the Labour party would, of course, take it. In this make-believe world of Labour thinking, when, not if, Labour are elected in 2015 the party will have to impose no cuts, spending will be allowed to increase on nice things like the health service, and grateful voters will at last acknowledge they made a dreadful mistake in 2010 by voting for those ghastly Tories. This inability to face the truth is deeply worrying for those, which now include, seemingly, the Labour leadership, who believe the party has spent the past three years either saying the wrong thing or nothing at all.

On the great issues of the day too often there has come has come either silence from the Labour party or scorn from the labour movement. By wallowing in the trough of political invective, the Labour party doesn’t seem to have realised that it long ago lost the argument.


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Balls is no Churchill

03/06/2013, 05:40:13 PM

by Jonathan Todd

Politics, as Churchill said, is the ability to foretell what is going to happen tomorrow, next week, next month and next year. Much of the theatre of politics exists, however, in the unanticipated events to which Macmillan attributed the failure of political plans. While, to paraphrase Lennon, politics is what happens when you are making other plans, plans are politically necessary and should be attuned to the likely and inevitable.

Political tacticians specialise in events. Political strategists identify trends and plan accordingly. The character of politicians is revealed in their handling of events but they are exposed without convincing strategy. And the strategic context that was obvious from the outset of this parliament was the politics of the deficit.

We might have thought in May 2010 that the government’s economic strategy of tough deficit reduction would fail and the public would then turn to Labour. Perhaps we thought that this strategy would fail, causing the government to adopt the Plan B that Labour called for and the public to conclude that Labour was right all along.

Few seriously thought that things would work out precisely as George Osborne forecast in his hopelessly optimistic 2010 budget. The real debate was always about whether this failure in itself would be enough to return support to Labour.

Unsurprisingly, Osborne has not said: “Ed Balls was always right”. We don’t need the spending review to know, however, that the government is failing. But polling published by Labour List contains scant evidence that this failure builds support for Labour on the economy.

As Osborne scraps around to increase the capital budget and Vince Cable cobbles together the kind of active industrial strategy that he previously denounced, agreement with Balls is implicit in their actions. Government policy inches towards Plan B but recognition that this constitutes a Plan B is politically impossible.


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The polling that shows why Labour’s lead is soft

22/05/2013, 03:32:53 PM

by Atul Hatwal

The terms of the debate are shifting within the Labour party. Since the underwhelming local elections, the question is no longer whether the poll lead is soft but why. Just this morning, one of Ed Miliband’s more doughty supporters in the media, Mary Riddell, penned her most pessimistic piece to date on Labour’s position.

This change has been partially obscured by the recent writhing of the Tory right over Europe and gay marriage but as the spending review approaches, it will come into sharp focus.

As ever, the answer to the question is to be found in voters’ views on the economy and specifically spending.

Labour’s case against the government has been clear: excessive Tory cuts killed off the flickering recovery of 2010 with the deficit rising as growth flatlines.

It is hard to disagree with the economics. But there’s a political problem.

More and more of the public back the cuts.

YouGov have asked a detailed series of questions on deficit reduction over the past three years and the shift in responses shines a light on why Labour’s poll lead isn’t so much soft as aqueous.

The public’s support for action on the deficit has been constant: at the start of March 2011, 57% felt that “the way the government is cutting spending” was necessary versus 32% who thought it unnecessary. Last week the figures were 57% and 29%, virtually no change over the past two years.

This should have been a warning that something wasn’t quite right with the poll lead: how could the public support Labour while also agreeing with the government’s approach to cuts.

But the YouGov surveys also had seemingly contradictory responses. The key question is on whether the public believe the depth of the cuts to be “too shallow,” “about right,” or “too deep.” The answers to this question initially suggested a consensus that the cuts were too deep. But that is changing.

Source: YouGov

Since April 2012 when 13% more felt the cuts to be “too deep” than either “about right” or “too shallow”, the position has shifted radically. This week, the poll had the pro-cuts camp 2% ahead.


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Good results for Labour but the UKIP surge augurs ill for Ed

03/05/2013, 09:59:45 AM

by Atul Hatwal

This morning Ed Miliband will be luxuriating in the breathing space afforded by the local election results. After a torrid couple of weeks where the Westminster narrative has palpably shifted against him, yesterday’s gains will disrupt the flow of negative stories, temporarily at least.

Not only is Labour on track to do well but UKIP – the new ball of wool for the media kitten – has performed sufficiently strongly to occupy days’ more column inches of reflection and dissection.

The Labour leader deserves his moment of respite. Winning lots of new councillors will revitalise local constituency parties up and down the country and help rebuild a Labour campaign machine that rusted and fell apart over thirteen years in power.

But Ed Miliband should be under no illusions: as good as Labour’s results are likely to be when all the results are declared, they will accentuate  the irreconcilable conflict at the heart of his political positioning and no number of smiling photo opportunities with new Labour councillors can avert Labour’s strategic dilemma.

On one side of Ed Miliband is the public. Contrary to the self-affirming assertions within Labour’s online echo chamber of activists and wannabe MPs that the centre ground of British politics is moving left, yesterday’s elections demonstrate something very different.

Whatever is said about UKIP, one thing is clear: disillusioned voters using it as a vehicle for protest are not headed left. There are plenty of left wing options for the type of nihilistic anger harnessed by UKIP but the voters didn’t pick any of them. It wasn’t the Trade Union and Socialist Coalition that surged yesterday.


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We are about to see who really runs the Labour party. Let’s hope it’s not Len McCluskey

01/05/2013, 08:57:15 AM

by Rob Marchant

Recent weeks have not exactly been glory days for Labour. The latest chapter, Monday’s car-crash World At One interview – with Miliband refusing to answer whether Labour would increase borrowing, thirteen times – made for excruciating, if compelling, radio; worse, yesterday’s official admission that Labour will do just that – increase borrowing – has left it exposed. As Nye Bevan might have put it, it enters “naked into the parliamentary chamber”.

But among the various pieces of bad news, there is one which particularly stands out, because it seems not only bad, but irreversibly so.

It is now a week since Len McCluskey’s extraordinary intervention, where he proposed a radical reworking of Labour’s programme, including the sacking of three shadow cabinet members. Not to mention the Labour leader’s robust and accurate response that McCluskey “does not speak for the Labour party”.

While the parliamentary lobby has moved on from the story, those familiar with the party’s organisation and history are still feeling the impact; a storm in a teacup it was not. And if Labour’s strategists are worth their salt, they might care more about McCluskey than about one bad interview; perhaps more, even, than a bet-the-farm gamble on increasing the national debt, two years before an election.

Why? This not just a textbook spat between union leaders and party leadership, in time-honoured fashion. One that burns brightly in the run-up to conference season every year and then fizzles out.


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Poor Ed is stuck between two marauding elephants

29/04/2013, 07:31:39 AM

by Kevin Meagher

There’s an old African saying that when the elephants fight, it’s the grass that suffers. If that’s the case, these past couple of weeks have left Labour’s lawn fit for a spot of crown green bowling.

First to start a ruck by waving his proboscis about was Labour’s emeritus leader Tony Blair, chiding via the pages of the New Statesman, that Labour risks settling back “into its old territory of defending the status quo” and blowing the next election.

A couple of weeks of tit-for-tat followed before Len McLuskey, tusks a-gleaming, charged headlong at Tony’s hindquarters also telling the New Statesman this week that if Ed Miliband listens to Blairites in the party he is consigning himself to the “dustbin of history”.

Both hulking mammals have the same motivation; to bruise but not wound Ed Miliband and make it clear their respective herds are not to be taken for granted as we pass the 60% marker for this parliament. They are both concerned about the shape of Labour’s offer to the voters in 2015. McLuskey denounces any prospect of offering “austerity-lite”, claiming it will lead to certain election defeat. Blair, in stark contrast, warns that to “tack left on tax and spending” will lead to “strategic defeat”.

Yes, Labour’s got to be pragmatic in how it approaches the next election (Blair) but it’s got to win for a purpose too (McLuskey). This is the age-old conundrum for the democratic left. It’s one that pits those with a simplistic (and now outdated) assumption that the party can offer the bare minimum to core Labour voters because they have nowhere else to go, with those who are reluctant to countenance the bloody business of compromise at all. Despite the dust that has been kicked up these past couple of weeks, both sides are sketchy about details.

On spending, McLuskey urges Miliband to “create a radical alternative” to austerity in order to remain “the authentic voice of ordinary working people”. Does this mean no cuts? Some cuts? Cuts to bits of public spending we don’t like? (The trouble is that a private sector union like Unite has many members in defence industries and won’t want to see cuts here which other unions might happily countenance).


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Three takeaways from Len McCluskey’s attack

25/04/2013, 05:30:17 AM

by Atul Hatwal

In one sense, it shouldn’t have been a surprise. Unite have been absolutely clear about their position and all Len McCluskey did yesterday in his New Statesman interview was to articulate what he and his union have been saying privately for the past two years.

That McCluskey is hostile to Labour centrists (or Blairites as anyone out of sympathy with the 1983 manifesto  is termed these days) is hardly news.

But the directness of the intervention is notable, as are some of the choice details he let slip. Rather inadvertently, Len McCluskey has presented an insight into the current state of the power politics being played out behind the scenes in the Labour party.

Three points are evident: McCluskey is nervous about his influence with Ed Miliband, he thinks Labour is currently headed for defeat at the next election and his real target was Ed Balls.

First, in terms of influence, when Len McCluskey is getting his way he is as quiet as a mouse. Nothing is said to rock the boat, publicly he is a picture of collegiate harmony.

In January 2012, when the two Ed’s dared to back a public sector wage freeze, he snarled into life. At the time, Ed Miliband pushed back but soon after the exchange a strange calm descended. No further comment came from McCluskey in response to the Labour leader’s apparent slap down.

The reason? Both Ed Miliband and Ed Balls had agreed never to let the words “public sector pay freeze” cross their lips again. McCluskey had got his way and it was back to playing happy Labour families.

The Unite general secretary’s intervention yesterday is a sign that he is not hearing what he wants in his private conversations with Labour’s leaders.

The spending review is scheduled for the 26th June and will be the pivotal moment of this parliament. For months Labour has avoided the question of where it stands on spending. Will it stick to Tory spending plans (or something very similar) or reject further austerity on the scale proposed by the Tories and the Lib Dems?

The pressure for Labour to give a clear sense of its direction of travel at the spending review will be enormous.

Anything less than a clear sign that Labour will commit to spending more than the Tories, and above all else, provide a generous pay settlement for McCluskey’s public sector members, will be unacceptable for the union.


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