Posts Tagged ‘spending’

How does Labour get its economic message across?

17/03/2014, 04:35:39 PM

by Jonathan Todd

“The last Labour government,” The Times front page last Friday reported Ed Balls as saying, “didn’t regulate the financial services in a tough enough way.” They reported this as “the closest to an acknowledgement of personal responsibility” for the 2008 financial crisis. Yet, given that Balls has said similar things in the past and is silent on whether the last government spent too much, it seems a relatively mild contrition.

Apparently, there are a range of views within the party as to how Labour should address a central Tory attack: “Why hand the keys back to the guy who crashed the car?” “Senior figures close to Tony Blair have been urging a more aggressive rebuttal”, The Times report. “Ed Miliband’s allies want to focus voters’ attention on the future.”

If Blair is advocating an aggressive rebuttal, I imagine he means on behalf of the 1997 to 2007 government, rather than the Gordon Brown administration. It’s a stretch to imagine Balls running on a “Tony was right, Gordon was wrong” campaign.

The debate over how Labour wins the economic argument was also considered in the book that Uncut launched at party conference. “We might change the conversation,” I wrote, “in which the Tories present us as addicted to spending by changing what people think of our past (“It was the banks, not us”) or what people think we think about our past (“It was partly us but we’ve learned our lesson”) or what people think about our future (“Here’s why it will be different next time”).”

Thus, Balls seems to want to say “It was partly us but we’ve learned our lesson”, while Miliband appears to want to argue “Here’s why it will be different next time”. In these terms, the approach advocated by Uncut is closest to that of Milband. “Because there is a limit to how much repositioning Labour can credibly make this side of the general election, we focus on the future.”

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Is the average Labour party salary really £43k per year?

24/10/2013, 02:34:20 PM

by Atul Hatwal

Last week Uncut carried news of another restructure at Labour HQ, with the party’s executive directors now reporting to Spencer Livermore instead of general secretary, Iain McNicol. It prompted one member of the team at Brewer’s Green to get in touch and draw our attention to something very peculiar: the strange case of the Labour party wage bill.

Normally a political party’s wage bill rises in the run-up to a general election as new staff are taken-on to gear up for battle. It then falls immediately following the contest, with parties’ reverting to their core staff team, until the election drum-beat sounds again later in the new electoral cycle.

Or, at least that’s how things used to be. Since 2010, Labour has taken a very different path.

After the general election, rather than the numbers in the staff team falling, they went up. In 2010, according to the Labour party accounts it employed an average of 247 full time equivalent employees (assuming part-time staff are 0.5 of a full time equivalent or fte). One year later, the number had risen to 288 fte with the party wage bill rising from £12.2m in 2010 to £13.1m in 2011.

Partially this was a result of moving from government to opposition, with large numbers of advisers moving from the civil service payroll onto the Labour party’s books. But even then, it was quite striking for numbers and costs to rise so steeply.

By way of comparison, in 2010, according to the Conservative party accounts, the average number of staff employed was 221 at a cost of £11.7m.

This means in 2011, at the point in the electoral cycle when costs should have been at their lowest, Labour was employing 67 more staff than the Tories had had to fight the general election and spending £1.4m more on its wage bill.

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Forget strivers vs skivers, it’s the uncosted spending that will hurt Labour on welfare

09/01/2013, 07:00:51 AM

by Atul Hatwal

Yesterday Labour voted against the welfare uprating bill after a debate in the House of Commons dominated by the four horseman of the welfare apocalypse, “scrounger,” “shirker,” “striver” and “skiver.”

These are highly charged, emotive terms, laden with implicit meaning. The focus of the debate in the run up to the vote has been on the values inherent in these words. The Tories are slapping a tax on strivers. No, Labour wants to sign a blank cheque for scroungers. Back and forth it has raged.

But amidst the sound and light about who was actually on the side of the hard working majority, the real impact on voter perceptions, and damage to Labour, has received comparatively little attention. Only yesterday, as the Tories rowed back from the sharper exigencies of their scrounger rhetoric did they alight on the most pointed attack on Labour.

Voters were already pretty clear that Labour will by and large try to protect benefits for the less well-off while the Tories are tougher on cheats. The values debate will not have altered this perception, except maybe to entrench it for both sides: the Tories cut with too much relish and Labour is more likely to fall for a hard luck story.

The one incontrovertible fact of Labour’s vote against the welfare uprating bill is that the party has now backed higher spending on benefits than the government.

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Ed Miliband’s speech was a political sugar rush that will have minimal lasting impact

03/10/2012, 11:17:52 AM

by Atul Hatwal

Last night Labour party conference was euphoric. Like a child that had just downed a can of full fat coke, the party was humming with nervous, happy energy. Across the bars and receptions the leader’s speech had energised conference.

It was certainly an assured performance. Ed Miliband looked relaxed and spoke in a way people could understand. No abstract flights of theoretical fancy or harping on about capitalism. His address was personal and defined by genuinely impressive delivery. To speak for an hour without notes, with the nation’s media waiting for any hint of a misstep, was a significant achievement.

But, for all the positivity, there was a problem: the content. Conference might have been swept away by the performance, and many journalists might have been similarly dazzled, but as the sugar rush subsides, what was the Labour leader actually saying?

There was no discernible over-arching narrative spanning the hour plus of his words. A “One Nation” motif, yes; a structured argument? No. Plenty of neat phrases yet nothing substantive in terms of policy. There was no detail to illustrate the broader points that would actually give the watching public any idea of what a Labour government would actually do.

Most importantly, the Labour leader didn’t address the fundamental problem that means the party is marginalised on the economy.

Based on this speech, the Miliband analysis is that recession and a rising deficit has almost neutralised the issue. The Tories have failed in their express mission – to reduce the deficit – and Labour’s narrative on growth will carry the day. A steady as she goes approach.

It is a critical misreading of the public mood.

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Advice for Ed: Unless Ed shows how Labour can be trusted on spending he might as well sing his speech in Swahili

30/09/2012, 07:00:31 AM

by Atul Hatwal

Third speech as leader, maybe it will be third time lucky. The task remains the same as in 2010: tackle voter concerns about Labour on spending. Note the focus here: spending. It’s not the deficit, nor debt, though both ideas are clearly very closely linked. It’s spending.

Too often when issues such as fiscal credibility or deficit reduction are raised, the Labour leadership’s immediate response is to talk about growth.

It’s understandable, our leaders are most comfortable describing ways to grow the cake rather than shrink it. No-one joins the Labour party to slash services. But just talking about how to boost the economy completely ignores the reason Labour lost the last election: voters don’t trust Labour on spending.

We could have the best plans for successfully stimulating the economy, reducing unemployment and supporting businesses and it would all matter not a jot.

That spurious charge, “Labour maxed the credit card” has stuck.  For many, debt and the deficit are the consequences of our reckless spending.  No matter how effective Labour’s plans for growth, voters think we would simply spend our way back into trouble.

Until this perception – and it is just a perception – is effectively rebutted, the party does not have voters’ permission to be heard on the economy.

The latest Ipsos Mori poll, released last Friday, has some stark figures that illustrate the depth of the hole in which the party finds itself.

In terms of the party with the best policies for managing the economy, Labour has fallen back since May. Immediately after Osborne’s bodged budget, the party had pulled level. Now, we are 5 points behind with 30% saying the Tories have the best policies and 25% opting for Labour.

Lest we forget, this slide on economic competence has happened during the worst of the double dip recession. If and when growth does return to the economy, what will happen to Labour’s economic ratings?

In his speech, Ed Miliband needs to directly address our problems on spending. He needs to acknowledge it as a real concern for many and show why voters can trust Labour again.

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Why the eurozone crisis is lethal to Labour

11/11/2011, 07:51:38 AM

by Atul Hatwal

The eurozone crisis is an unmitigated disaster.

I know, hardly breaking news. But I’m not talking about the impending threat to global capitalism. Worrying as it is, rivers of words have flowed on that topic. It’s Labour’s electoral prospects that are the concern here.

On the face of it, the crisis should have improved the party’s standing in relation to the Tories.

The government’s economic strategy is in shreds. Growth has been flatlining for months, domestic demand is anaemic and now the fate of the mythical export led recovery rests in the hands of reticent eurozone members who have demonstrated a singular inability to get ahead of the markets.

Many of Labour’s criticisms have been vindicated and now, of all times, the public should be taking a look at Labour as a realistic alternative.

But they’re not.

And the longer the crisis continues, the less likely that becomes.

For all the catastrophic implications of the crisis for the government and it’s economic approach, the underlying narrative of what is happening in the eurozone is kryptonite for Labour.

The common story running through all the tribulations on the continent is that the markets destroy countries with high public spending.

Regardless of the economic realities of the situation – we’re not Italy or Greece, never were, never would have been under Labour, and besides, we’re not in the euro – the crisis is confirming the visceral fear of runaway spending within the British voters’ psyche.

It’s why they voted the last Labour government out of office and is a fear that has since remained at the forefront of their considerations.

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It was the risk not the spending that Labour got wrong

11/01/2011, 04:15:34 PM

by Anthony Painter

Ed Miliband is in a bind. He is tied to a fiscal policy that the public believes was profligate and irresponsible. His strategy so far has been to defend that record to the best of his ability. That is not enough. It may be time to switch tack.

The debate is homing in on the question of whether Labour was spending too great before the 2007 turbulence. And actually if you pull out the figures the answer is marginally on the side of ‘defend the record’- on the face of it. Current spending was in deficit ahead of the crisis though not catastrophically so- 0.3% of GDP in 2006-2007. The public sector net debt was lower than in 1997 at 36.6%.

None of this looks irresponsible in fiscal terms. Public sector productivity and inefficiency tell a slightly different story- there is no doubt that the money invested in public services post-2001 failed to raise output as it should have done. Steve Richards in his articulation of the case for the defence in the Independent this morning acknowledges that fact:

“Labour failed to address inefficiencies in the public sector and some of the additional investment was wasted needlessly, but the overall spending was necessary at the time, as Blair discovered then and some senior Tories discover now.”

So the case for the defence seems to exonerate Labour for imprudence but is more ambiguous on wastefulness. (more…)

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