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Will 2015 Be Labour’s Poisoned Chalice?

It’s tough being a political party. Life outside of government is relatively care free affair. You can formulate policy, spend your time critiquing and criticising, and look forward to a fair amount of time sat atop opinion polls. But once you’re in power it’s a whole different ball game. It’s time to come up with the goods you promised in opposition. It’s an occasion for breaking promises and getting found out, as our friends the Liberal Democrats have found to their cost. A party’s image takes a battering, its representatives in local, devolved and European bodies pay the price of unpopularity, its leading figures defamed and lampooned and, eventually, the electorate give it the boot. This begs the question: why bother? That’s the question Jackie Ashley more or less asked inThe Graun the other day.

Okay, I’m guilty of being a touch facetious. Come 2015, what in Trot-speak we used to call the “objective conditions” are not going to be much different. Will the economy be growing or not? It won’t matter to most people, for whom pay is likely to remain lagging behind inflation. Will joblessness be down? Probably, but again not replacing sacked public sector workers like-for-like and seeing more and more jobs cut up into zero-hour, part-time and temporary-sized chunks is no recipe for a feel good factor. Exports are down, and debt – public and private – is at record highs. There’s very little chance of that “rebalancing” Osborne and Dave like to bandy about meaningfully occurring before 2015, except on one measure. Slashing the state-employed work force and/or outsourcing/transferring many hundreds of thousands of them to for-profit businesses can make it look as if the private sector are storming heaven, or some such rhetorical nonsense that accompanies any indication of economic growth.

The situation will be grim, so does Labour really want to win? Of course, the answer depends on what Labour does with its victory. But first things first, we know what the party has announced so far. We know it will abolish the bedroom tax straight off. At a stroke our very poorest, including hundreds of thousands of disabled people, will get immediate relief. For readers getting prissy about voting Labour, you might want to consider that. We also know that the party has promised a repeal of this government’s Health and Social Care Act – the one that transformed the NHS into a market for service delivery, a market that is subject to EU competition law and one in which public providers of health services are discriminated against. A complete waste of money, as well as something many sitting on the Tory benches will benefit financially from. That also makes a real difference. Yet both of these, in a way, are “easy” policies. They’re on the right side of Labourist politics, and they will save public money too. The political pain comes with the tough issues.

As is customary these days, Ed Balls has committed Labour to the Coalition’s public spending plans for 2015-16, just as Brown and Osborne did before him. This doesn’t necessarily mean a Labour Treasury won’t play around with the monies it has. There’s a bit of wiggle room in £720bn. Yet telescoping forward from the vantage point of 2013, and given the forewarnings about “tough decisions”, a programme of cuts will carry on. Sure, there is a political logic in sticking with established spending plans. Straight away the sting of “tax and spend” Labour has been drawn. Not being able to take Labour on without the Tories attacking their own plans, it could be smart politics. On the other hand, it’s a gamble. Is it strategically wise to allow your spending plans to be set by an out-of-his-depth chancellor and a gang whose blueprint for the economy is The Road to Serfdom? The answer has to be no. Nevertheless, barring an Osborne-style pledge for an emergency spending review, that is likely where Labour will be. So, Labour’s hand is not of its choosing, and the chancellor will ensure the cards are shuffled in such a way to be to our maximum disadvantage, but its up to the leadership team how they play it. Here’s my suggestion.

From day one of the Coalition, the Tories and LibDems have approached economic questions politically. Wedded to Adam Smith sans his moral injunctions against money-grubbing, they have not wasted the crisis in ensuring that working people pay for it, and continuing to ensure the redistribution of power and wealth to the very rich from everyone else. Theirs is a sectional, class war government justified by a doctrine of economic necessity in the first instance. This is a policy orientation bought at the expense of the long term interests of those they champion. Their very political economy has to be met by one of our own. Thanks to its baggage, calling it a five-year plan is perhaps best avoided but Labour has to be bold about restructuring British capitalism. Labour’s immediate and long-run health demands that it does so. Cutting doesn’t work and has been shown not to. Instead, it needs to be smarter with taxpayers’ money. Cracking down on tax dodging is an ever-green cure-all, but it needs putting into practice. Cracking down has to mean *cracking down*, up to and including shutting down off shore crown dependencies where trillions have been parked. Being smart means recognising that HS2 is 30 years too late and will do little to improve Britain’s economic performance. Far better would be investing those colossal sums in wiring the entire country up with high speed broadband and wireless internet. Perhaps it should also be free. It is also about time the need for a submarine nuclear deterrent was rethought. What does Britain gain from swaggering around the world pretending to be a great power?

Again, easy stuff in terms of pain. Not so easy with the practicalities. For example, chasing tax dodging is a complex business involving courts, other states, international negotiation and so on. Technically speaking it’ll be a while before money is repatriated, but politically Labour will reap the rewards. The same is true of HS2 and, perhaps, Trident. But these are not the magic bullets some of my erstwhile comrades think. They will not magic away deficits and debts, though, of course, they could go some way to addressing them. Labour needs to use the stick of the law and the carrot of corporation tax to prevent businesses from dumping their costs onto taxpayers. Uprating your workers above the living wage? Here, have a corporation tax cut. Provide company-wide child care for employees? Have another. Take life-long learning and job security seriously? Recognise collective bargaining? Relinquish one-sided PFI contracts? The list goes on. Assuming there will be no nationalisations and renationalisations or radical legislation like one shareholder, one vote; businesses have to be incentivised by the tax regime to make sure they have direct material interests in discharging social and environmental responsibility. This will go a long way toward putting money in people’s pockets and making them feel more secure in work and life generally. It’s a start.

These can be done or begun within the parameters set by the Tories. If there is one lesson Labour should take from the Coalition, it is to move with haste and ensure a new settlement is bedded down in short order, before the opposition in the Tories, in the media, in finance, and in other sectors of the establishment start organising around their bleating. And then after that first year, if Labour need to borrow more it should do so – but soften the inevitable nonsense from the right by announcing a simultaneous zero-based budget review of public spending, beginning with procurement, outsourcing, internal market costs (health, education, defence, etc.) and high salaries. If a public body cannot afford to run certain services, it certainly cannot afford to pay reams of officers on £100k+.

Looks relatively rosy, doesn’t it? But it’s not. While this is going on there will still likely be cuts, even though Ed Balls and Ed Miliband know they’re counter-productive and act as a drag on economic activity. Every single cut across every single department needs to be thought through in terms of *net* saving and *net* cost. There’s no point laying off tax inspectors if that will damage your revenue stream in the medium term. Throwing public sector workers onto the dole is stupid if it will cost more in redundancies and depress the local economy.

Could winning in 2015 do Labour in? Yes, but it’s not inevitable. It’s a question of politics. Labour has a chance, if it wins the election, to permanently change British capitalism, to ‘under-promise and over-deliver’ as the leader is fond of saying. The prize is not just a better society, a foundation on which further social advances could be built, but also, perhaps, an almost permanent marginalisation of the Tories and the backward, sectional, moneyed interests they represent. It’s not a matter of praying that Labour succeeds – it’s a call for every labour movement person to get on board to push and campaign for what needs to be done.

5 Comments

  1. John Reid says:

    It was said 1970 was a good election for labour to lose, would labour have lost in 74 , had they won in 70′, as for wi. I g in 74′ meaning that by 79 the Tories could win that election with the. Rive of giving away council homes dirt cheap,and then have North Sea oil, to keep them in power for a generation, plus the Tories not having the power of the press they had then, now, as the Mail want Boris, not Cameron as leader, the view that no government increases it’s percentage of votes ,fter their second term, means that If Ed wins in 2015 v with 35% of the vote! then the 2020 election will be difficult, if Labour under Ed can’t get he conk y running by spending money it’ll e final clarification, of the Tories in 2020 ,that ‘you’ can’t buy your way out of a recession, of course if labour loose in 2020 , as Ed isn’t the socialist that his union pay masters want him to be, then Mclusky and co, would say after 2020′ we list as it wasn’t left wing enough,

  2. Rod says:

    “it’s a call for every labour movement person to get on board to push and campaign for what needs to be done.”

    Yawn.

  3. swatantra says:

    Theres no point in being in Govt if you are not going to do anything radical and life changing for the better. Thats what happened to Labour from 2004 – 2010; it just coasted. Different in 1945; different in 1964-66; different 1997-04.
    Its not just about winning elections. You go into politics to change things, not to coast along. Soeven if you know you’ll only get one term, you can have a radical programme and do it all in 5 years, and don’t worry about the next election.

  4. treborc says:

    What ever labour says now, I will keep thinking back to Brown leaning on the dispatch box leering and pointing his banana sorry finger at the Tories saying we are the party of no more boom and bust.

    I will always think about the welfare reforms the education education education which saw us end up near the bottom of the education league.

    The biggest crash in living history the banking fraud and the idiots we voted into power called New Labour.

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