A chance for Labour?

Despite the successes of Labour in recent local elections and the continuous unpopularity of the coalition government, I fear that it is still true to say that a large percentage of the population believes the coalition’s narrative on the economy. This narrative reads that Labour overspent in government building up a massive deficit and is directly responsible for the economic collapse in Britain and the mess left for the coalition government to admirably clear up.

Whilst it is true that the UK (and much of the developed world), built up irresponsible amounts of debt, it is doubtful that a Tory government would have done any different. After all, up until 2008 the Tories very rarely disagreed with the amount Labour was spending in government. Furthermore, the basis of the economic crisis in Britain was the worldwide crash instigated by the collapse of American banks, which caused tremors across the developed world. Labour then took some very hard decisions and Gordon Brown called it right, pleading for the bailout of the banks and leading Europe away from the crisis. Labour then began to deliver stability and small amounts of growth before inevitably losing power at the 2010 election, largely due to the public’s decision to not trust Labour with the economy.

However, since 2010, the UK economy has consistently stalled and stagnated and has now returned to recession, despite the implementation of Tory economic plans. Despite the fact that the economy has slid backwards over the past two quarters, the Tory party continues with their damaging fiscal ideas and the country continues to allow ideological cuts to ruin the economy due to their distrust of Labour. As well as denying the UK economy growth, the prime minister has today claimed that the Eurozone must replicate the coalition’s “pro-growth” agenda, a laughable gesture considering that the UK has returned to recession.

It has been clear for a long time that the economy will be the defining factor of the next election, probably in 2015. It is key for Labour’s election prospects therefore that the party regains economic credibility and destroys that of the Tories. You would expect the return to a double-dip recession would make this job easy but the sheer level of distrust between voters and Labour has made this a difficult task. However, I believe that David Cameron’s speech today, urging the Eurozone to replicate his policies, and continued stuttering growth allows Labour a golden opportunity, one they cannot afford to miss, in destroying Tory credibility going into the next election. As for restoring respectability to Labour’s economic plans, the party must recognise the faults of Labour before the 2008 crash, and ensure that they produce spending plans that are realistic and accounted for. Furthermore, I believe that Labour can gain a stranglehold on the election by presenting their economic vision as one of equality and fairness.

In attacking the coalition’s economic plans, Labour have already been presented a massive opportunity by the UK’s return to recession, and faltering voter confidence in the coalition policies was shown by Labour’s massive local election victories. Furthermore, Cameron called today for the adoption of UK economic policies throughout the Eurozone, and who in their right mind espouses an economic policy so consistently failing. Labour can surely use Cameron’s speech today to present the prime minister as hellbent on austerity due to his ideological interests, as surely any pragmatic leader would look to change course so as to restore growth.

To restore faith in Labour’s ability to handle the economy the two Eds must acknowledge first and foremost that Labour under Gordon Brown made mistakes and they must accept that voters still have not forgiven these mistakes. They must use this opportunity to distance themselves from the old Labour regime and stamp their own authority on the Labour party. One question always asked of me regarding Ed Miliband is “what does he stand for?”, and it is a question I struggle to answer and usually I respond with vague murmurings about fairness and equality. I believe that, even if voters do not trust Labour to deliver economic excellence, they are currently seen as the party of fairness, and I believe Ed should make fairness central to his agenda as a whole, and his economic policy. Tory cuts are ideological and ruthless and must be attacked as so, whilst Labour must produce a correctly costed economic policy which restores growth and jobs to the working-class and squeezed middle, regaining voters lost to the Tories in 2010. Whilst I believe Labour has been right to keep its cards close to its chest up to this point regarding a potential spending plan post-2015, now the two Eds must deliver a credible alternative.

Therefore, it is key now that Labour takes advantage of what may be the best opening they get regarding economic policy in this government’s term in office. To take full advantage Labour has to produce a credible alternative, correctly costed, which produces a narrative for Labour’s route back to power, one of equality of opportunity, fairness and growth.



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6 responses to “A chance for Labour?

  1. “Whilst it is true that the UK (and much of the developed world), built up irresponsible amounts of debt”

    It’s interesting that even you have apparently bought into the coalition’s narrative to a fair extent – it may be true that the UK built up a lot of debt, but the vast (really vast) majority of that was corporate debt and household debt, nothing to do with the Labour government really – just continuing a trend that’s been going on since the 80s.

    In terms of government debt, it was actually lower in 2007 than it was in 1997. It’s only the financial crisis and ensuing bailouts (as well as the collapse in tax revenue) that’s caused it to get as big as it is now. And to be honest, even now it’s not that big compared to historical levels, and it’s certainly not problematic – the interest rates for it are at the lowest they’ve been ever! (and that’s a trend that had very clearly started under Gordon Brown, not a result of faith in coalition policy).

    “up until 2008 the Tories very rarely disagreed with the amount Labour was spending in government.”
    I think you’ll find that they explicitly promised to match Labour’s spending.

    ” Furthermore, the basis of the economic crisis in Britain was the worldwide crash instigated by the collapse of American banks”
    Which was caused largely by the deregulation of banks started under Reagan in America and…the Tories here. The deregulation which New Labour continued, but which the Tories eagerly cheered on.

    And a very tightly related problem, which is also one of the main reasons for the miserable growth in the economy, is our massive trade deficit…which we’ve had since….you guessed it! – since the Tories, under Thatcher, dismantled our manufacturing base and started the financialisation of the economy!

    And that’s also one of the big causes of the mass household and corporate debt. The other big cause of household borrowing is the fact that wages have been stagnant for most people in this country since…waddaya know? Since the 80s when Thatcher and the Tories destroyed the trade unions, privatised everything in site and cut taxes for the rich! And those tax cuts haven’t exactly helped this whole deficit situation… (all this fuss over the 50p rate – it used to be 80p!)

  2. I’d agree that much trouble stems from the Tories in the 80s and perhaps it was the fault of normal Britons, not the government, that huge amounts of debt were built up. However, I couldn’t see any party being popular were they to come out at this stage and blame the problems on normal people, especially Labour!

  3. That’s a facile argument that just ducks the responsibilities of government completely. Even if it were true that normal people were somehow to blame for this, so what? Just saying that and moralising and asking everyone to be better people isn’t going to fix anything. If millions of people are doing something that’s having disastrous effects on everyone, then that’s a systematic problem that government needs to tackle.
    The same argument could be used against taxation and the welfare state – “we wouldn’t need it if only people would be better and give more money to charity”. But they don’t. So we need taxes.
    The same with criminal justice – “we wouldn’t have all these problems if criminals just behaved better” – well that’s why we have a police force, judiciary, prisons, rehabilitation programs and so on.
    Collective rules and enforcement solve the problems of individual weakness, selfishness and irrationality.

    But as I said, “even IF it were true”, and there’s a lot of clear evidence that it’s not true. As I mentioned in my previous post, wages for ordinary people have been stagnant for the last 30 years, couple that with our relentless consumerist culture, aggressive marketing and normalisation of credit cards and loans by the banks and so on, the housing bubble and related culture, selling off of council houses (by GUESS WHO) and failure of successive governments to replace them and the massive household debt seems pretty inevitable.

    But anyway, that ignores the fact that it’s the banks making these loans, and there is absolutely no way to dispute that it’s fundamentally their responsibility (not just morally or legally, but even for their own long term good) to accurately gauge the risks of the loans they make. Unfortunately, asides from just the usual greed, incompetence and short-termism, the other reason they failed at this was the deregulation of the financial sector (I wonder whose government did that?), meaning loans could be bundled together and sold off as part of complex derivatives. That means the person making the loans doesn’t care how risky they are because they’ll be long gone by the time they default, and the complex structure of these derivatives makes the risks very unclear to whoever buys them.

    Of course, this is all basically moot, since it was the American subprime mortgage situation that brought down the world’s economy – not ours. As I understand it, our mortgage scene has held up fairly robustly so far.

  4. I’m not disagreeing with you, and yes I recognise that action needs to be taken and it would be a dereliction of duty to not do so, however, the article was about helping Labour’s chances to return to government and I think for them to do so they will have to show some humility.

  5. Was just highlighting that the case in Labour’s defence was far, far stronger than even you seemed to be aware! Also I’m very pedantic.

    But yeah, I certainly agree with you broadly – I do think one of the biggest problems with our political culture is the total inability of anyone to admit to all but the most incontrovertible of mistakes

  6. I certainly agree that Labour has taken a considerable amount of undeserved criticism, but I just think that the public is too stubborn and convinced by the Tory narrative for labour to do anything other than accept at least partial blame. I’d fear that to do otherwise would be electoral suicide, especially when still headed by a relatively new leadership and one that is still yet to really inspire voters with any positive message.

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