Articles tagged with: Labour
According to the Guardian’s summary of today’s PMQs, David Cameron asked at 12.09pm what Labour’s plans are, implying that we don’t have any, and at 12.12pm he claimed that Labour’s cuts weren’t going to be that much different to those of the coalition.
Which is it? Does Labour not have a plan (as per Cameron’s question at 12.09pm) or does Labour have a plan containing cuts comparable to those of the government (as per his argument three minutes later)?
I think the Prime Minister is implicitly conceding that Labour has a plan for controlling the deficit. We need to make sure that the public clearly understands our plan and is convinced by it.
Labour, of course, returned to opposition after being in government for 13 years in May. At this time, however, Labour also regained control of 8 London boroughs, including Southwark. This means that Labour now controls 17 London boroughs, as compared with the Tories who control 11 and the Liberal Democrats who control 2.
How this strength in local government can be a springboard to Labour regaining power nationally was a recurring theme at yesterday’s Southwark Labour Party conference. The conference was well attended and brought together both seasoned and new activists, who, while still visibly delighted to have returned to power in Southwark, are fearful of what the Tory-Lib Dem coalition cuts will mean for their communities and the borough.
These cuts mean that Labour have returned to power in Southwark in challenging circumstances but there was a consensus amongst activists at the conference that it is far more preferable for the borough to be facing these challenges with a Labour led council than without one. The conference was also pleased to welcome back Susan Elan Jones and Alison McGovern. They have both previously been deputy leaders of the Labour group on Southwark council but, since May, have been MPs for Clwyd South and Wirral South respectively.
Alison stressed that the public case for the role of government often hinges as crucially on the way in which government does things as what it does. The case for government intervention is damaged, for example, when someone sees fit to retort: “The council is rubbish because it doesn’t treat people with respect”. If the public lose confidence in public institutions like councils, it will, argued Alison, be far easier for the coalition to take forward their small-state agenda.
It is worrying, therefore, that Patrick Diamond – now a Southwark councillor and previously a senior advisor to the last government – reported that his constituents have not always been treated with the respect that they deserve by the council. Council leader Peter John is committed to changing the culture of the council to ensure that this is not the case in future and it is important that this culture shift is achieved.
It is also important that the council thinks innovatively about how it will deliver public services in this age of austerity. Susan argued for more decentralised solutions. In neighbouring Lambeth this has taken the form of pioneering the drive towards co-operative councils. It was in Lambeth that Tessa Jowell, whose constituency straddles Southwark and Lambeth, held a “tea party” attended by over 150 people. This “tea party” – it is unclear whether events in America will lead to a rebranding – was a forum in which the community came together to discuss shared challenges. Such a large attendance at such an event in a relatively deprived neighbourhood stands as evidence, as Tessa noted, that all sections of society, not simply the chattering classes, contain people who are keen to come together in a co-operative spirit to find new solutions to common concerns.
It is this spirit which Lambeth’s co-operative council will tap into and be sustained by. Whether Southwark adopts quite the same approach remains to be seen, but it is likely that the harnessing and development of this spirit will be necessary for Southwark to weather coming years as well as possible. Moreover, the seeds of the policies which may return Labour to government and sustain us in government may be contained in this spirit and the policies developed at local level to enhance and channel it. This may be one way in which local political strength may be transformed into national political strength by Labour.
I wrote for Labour Uncut today on the challenge for the new shadow chancellor.
The Labour leadership election will, finally, end on 25 September. But the identity of the shadow chancellor will be unknown until 7 October, when the results of the shadow cabinet election are announced. 13 days after this the new leader and shadow chancellor will lead our response to the comprehensive spending review. “It is”, as a leadership contender has said, “an incredibly tight timetable for the new leader and their shadow chancellor to map out a policy that might yet determine how we are viewed for the rest of the parliament.”
The general election too quickly gave way to the leadership election. (Which should have started later and been shorter). With the end of the leadership election, the formal involvement in the shadow cabinet election of four of our would-be leaders begins. This is a grueling pace. But the new leader and shadow chancellor will need immediately to demonstrate economic literacy, which means robustly critiquing George Osborne and articulating a credible and appealing alternative economic approach. While this is challenging, there are some relatively simple points that are worth underlining.
First, like the Liberal Democrats, we consistently warned prior to the general election that it was too much of a risk to the economy’s recovery to cut public spending this year. There is no evidence that these risks have significantly diminished. Business credit remains weak. Lending to businesses fell for the eleventh consecutive month in July. Consumer demand remains sluggish, as tens of thousands of homeowners are expected to face at least four more years of negative equity and redundancies in the public sector are thought unlikely to be absorbed by additional private sector employment.
Second, no matter how the Liberal Democrats defend the shift in their position on public spending cuts this year, the UK is not Greece and was never in danger of becoming Greece. As Rachel Reeves has noted, national debt in the UK in 2009, as a percentage of GDP, was 72 percent, while in Greece it was 119 percent. Additionally, and crucially, having our own currency and a central bank that can set interest rates in the interests of the domestic economy provides us with far more flexibility than is available to the Greeks within the eurozone.
Third, our opposition to cuts this year derives from a deeper view: sustaining economic growth is an indispensible precondition of deficit reduction. In the absence of growth, the deficit will widen as tax receipts fall and unemployment benefit payments rise. Public debt levels are generally more sensitive to growth than changes in tax and spending. George Osborne can cut as aggressively as his Thatcherite heart desires, but if we slip back into recession this cutting will do little to contain the deficit. Indeed, it also risks a deflationary spiral if Osborne responds to recession by persisting with his cuts.
The risk to public finances posed by a double dip recession must be balanced against the risk of higher interest rates cascading through the economy – further credit crunching businesses and raising household mortgage payments – if the deficit reduction plan fails to convince markets. Reduce public spending too early and the double dip risk increases; cut too late and upward pressure on interest rates becomes more likely. George Osborne, in cutting earlier and by £40bn more deeply over this parliament, is putting more emphasis on the later risk than Alistair Darling’s plans do.
Yet, as no lesser economic authority than the FT’s Martin Wolf has observed, “the market is screaming its lack of concern about UK fiscal credibility”. In these circumstances, forcefully illustrated in Ed Balls’ Bloomberg speech, it is perverse for the chancellor to underplay the double dip risk of cutting too early and too deep for the sake of masochistic cuts ostensibly justified by market concern about the deficit.
In truth, Osborne’s plans are driven by an ideological imperative to reduce the size of the state. This goes against the premium which Anatole Kaletsky places upon pragmatism in Capitalism 4.0; his weighty tome on the financial crisis and capitalism’s future. “In an indeterminate world”, he writes, “both economic and institutional decisions will have to proceed by a zigzag process of trial and error.” Rather than this flexibility and adaptability, Osborne, as Pat McFadden has noted, has given us “faith-based economics”.
Labour must be careful, however, that we too do not become inflexible and dogmatic. While Osborne is underplaying the double dip risk, which even those red-blooded socialists at the British chamber of commerce worry about, and is willing a private sector led recovery through little more than his faith in it, the interest rate risk attached to the deficit should be squarely confronted by Labour. Being squeamish about this not only betrays our credentials as the party of pragmatic economics but leaves us seeming trapped in what Phil Collins has called “the comforting illusion that state spending is a straight line to progress”.
This illusion can attach to social as much as to economic policy. And the public sees through it. The mood music emanating from Labour risks seeming too statist if we seem unwilling straightforwardly and even-handedly to address the deficit. Alistair Darling has left plans which should take us a long way towards avoiding this outcome. But our new shadow chancellor will still have crucial decisions to take during a testing first fortnight in office.
Good overview of the polls since the PBR from Danny Finkelstein:
“Before the PBR, You Gov gave the Tories a 5 per cent lead, now it is 6 per cent; Populus gave the Tories a 6 per cent lead before and a 4 per cent lead now; Mori gave the Tories a 3 per cent lead before and a 6 per cent lead now; ICM gave the Tories an 11 per cent lead before the PBR and a 15 per cent lead in their last poll.
“Only ComRes – which had the Tories on a 13 per cent lead some time before the PBR and now have them on a 1 per cent lead – shows a real shift after the PBR”.
So unless you buy the ComRes story, it remains the case that while Labour may have regained the ears of the country, more work still needs to be done to convert this hearing into voting intention.
Craig Brown’s re-imagining of the first meeting between a Labour Prime Minister and the monarch captures something of the relationship between Labour and the establishment. “The King was desperate to keep Ronald MacDonald on side, so he hired a labourer’s uniform to welcome him to the Palace. Carrying a chimney brush and a whippet, clad in grubby overalls, a flat cap and clogs, his face blackened with soot, King George was taken aback to find Ronald MacDonald on bended knee, dressed up to the nines in top hat, white tie and tails. The King breathed a sigh of relief. He suggested that he and MacDonald might feel more comfortable switching uniforms. Within seconds, revolution was averted and social order was restored”.
Not only under MacDonald has Labour’s threat to the established order quickly given way to an affirmation of it after being gently fettered and feathered. The claim that Tony Blair’s premiership embraced this tendency was epitomized by the tag Tony MacBlair (in reference to Ramsey, not Ronald). Denis MacShane recently bemoaned the lack of a great novel for the New Labour era. He perhaps did so in ignorance of Blake Morrison’s South of the River, which is for the Blair years what Martin Amis’ Money is for the Thatcher years. Here the terror that MacBlair once instilled in the establishment is illustrated by a character exclaiming on the 2nd of May 1997: “He can do what he likes, with that majority. Nationalise the banks. Cream off profits. Tax us all to ruin”.
