Paul Teasdale on a chorus of deafening silence

Silence of the leaders

In the post-election commentary there has been a rush to talk about the people to whom the Labour Party must tailor its appeal. That leaves hanging questions about what a party is for, but it is also avoiding an examination of what went wrong. There is a tendency to say we must look to the fight ahead, rather than spend time examining the past. For many politicians in the Labour Party, this seems to be a personality trait, but is accentuated by commentators who turn any discussion of the past into placing the blame on individuals.

However, we cannot really get into rebuilding the Party and finding a leader to represent it until we have some level of agreement of what was done wrong.   It cannot be reduced to thinking that all will be solved with a better leader. This piece therefore is very much in the tone of post mortem rather than a rallying cry.

I begin by stating that Ed Miliband was the right choice in 2010. He was the candidate who best acknowledged the failings of Labour in government, and why (new) Labour had lost support. However, his personal weaknesses meant that he ended up repeating some of the errors of Brown, missing the bigger picture for the sake of short term headlines.

Two fateful decisions

The shape of Labour’s defeat in 2015 can be seen in two decisions taken in 2011.

The first was the failure to respond to the SNP electoral victory in the Holyrood elections. The second was the decision not to talk about the economy, and, in particular, not to defend the record of the last Labour government.

Silence on Scotland

The SNP victory was not a really a surprise as the LP had been poor in opposition and the SNP reasonably effective in administration. They have however not shown much policy development as everything has been focused on independence. The policy difference across the border that most people (north or south) recognise is the absence of tuition fees in Scotland – but they forget that this has nothing to do with the SNP: It was the key demand of the Lib Dems when they went into coalition with Labour to form the first devolved administration.

The main factor in tipping the victory into a majority was that was that the SNP was much better organised. They were not especially good but the LP was a shambles. The LP did virtually no work on the ground. The Party had sat on its safe majorities for too long. Canvassing and telling appears not to have taken place for some twenty years. And when it lost office in 2007 it had no idea what to do.

Miliband and others, perhaps rightly, stayed out of the 2011 campaign but the result and the inevitability of a referendum should have rung alarm bells and the decision to stay out of the debate on independence was a big mistake. They should have registered that independence would seriously reduce the prospect of a Labour government in the UK. Labour has only once (1997) come into government with a majority of English MPs (In 1945 and 1966 it was already in government). Secondly they should have seen that the Party in Scotland was in a bad way and in need of support.

Yet the Labour leadership played no part in the campaign against independence until the very end and then tagged along with the Tories. Nobody made a case for the union as the best means of promoting social democracy. The only prominent voice saying that permanent Tory rule in England would be bad for an independent Scotland was George Galloway. The no campaign became about weighing up costs and benefits rather than what sort of society we want. The absence of Miliband allowed the SNP to become the anti tory party. As far as I, as a frustrated voter, could tell, Miliband appeared to have no view on the matter.

The 2015 result punished the Labour leadership for neglecting Scotland. But it is a mistake to think Labour lost because the SNP was more left wing. In the 1980s Labour painted the Conservatives as an English party and the SNP has now done the same to Labour. People said they wanted Scotland to have a voice in Westminster readily forgetting that not so long ago much of the Cabinet was Scottish. The SNP are not a progressive party. They have few new policies except centralisation of policing. Nor is the electorate of Scotland particularly more left wing; they may express more concern for the disadvantaged but no party in Scotland has felt ready to use the tax raising powers given in 1999 to fund more welfare. Sturgeon talked about resisting austerity but has no plans to raise taxes to fund spending in Scotland. In advance of the independence referendum the SNP were talking about reducing taxes.

It may now be time to give full autonomy to the Labour Party in Scotland. Several people in the independence campaign and even within the SNP had the belief that a new left wing party could emerge with independence. I voted against independence because I do not believe that there would be much scope for social democratic policies in an independent Scotland if the UK were pursuing contractionary fiscal policies, but I would like to be proved wrong.

Silence on the economy

A more important choice of 2011 was the conscious decision to give up the fight on the economy and on the economic record of the Labour Government. During the recent campaign I grew increasingly angry at the failure to respond to the repeated accusations of having spent too much, or of having “bankrupted the country”. The myth has been created that Labour spending caused the recession. From the day after the election the Tories succeeded in setting the key issue as the mess left by Labour. The biggest betrayal of the Lib Dems was to echo the Tories’ line even though they knew better. The BBC has supported this myth; even when questioning where the axe should fall, the necessity for cuts has never been challenged. Clearly in 2011 the Labour leadership felt they were fighting a losing battle.

By 2015 the myth was so entrenched that if any Labour politician attempted a correction during the election campaign they were met by condescending sneers from both Tories and interviewers such as Dimbleby. When pushed on spending I heard LP people plead that there was a need to spend on schools and hospitals, but not rejecting the accusation that the Labour government damaged the economy. In fact there was a lot in the macro economic performance of the Government of which they should have been proud. Without the actions of Brown and Darling, it is possible that the banking crisis could have led to a full scale worldwide depression. While other world leaders seemed flat footed they were able to generate agreement for reflationary policies. This might have been seen if he was not so bad at the job of prime minister in other respects. History will treat Brown a lot more kindly than did the British public.

In recent months, forced to say something, Miliband has talked about imbalance, and tax revenue being over-dependent on the banking sector. This makes it seem like a technical issue. He should have been saying that Brown did the right thing. Would they prefer the Government to have let RBS, Lloyds etc fold? If Labour is to have social democratic policies it needs to reject and challenge the assumptions behind these questions. The economy was not bankrupt. There was never a threat to the flow of lending. Ed Balls and Ed Miliband both studied economics so they know that borrowing is an important tool in economic policy and there is no inherent virtue in a balanced budget. When interest rates are so low there is no need to reduce the debt. But instead of saying this they seemed prepared to go so far as enshrine balanced budgets in law.

There are so many misleading simplifications about debt and Labour has not challenged any of them. For instance: do people know who holds the debt? The implication is that it is with other countries. About a third is to the Bank of England, and much is with the British public.

The decision not to discuss the deficit seemed, to Miliband, to be vindicated by the success in scoring points against the 2012 budget, where they focused on tiny details such as pasties. And then in 2013 by the response to his talk of freezing energy prices. Examine the speeches of Ed Balls over the years and they become ever more limited to details rather than principles.

Rather like Brown before him, Miliband thought it safer to talk about details rather than messages. Yet looking at the Conservatives’ success it is clear that they have emphasised broad messages rather than details or promises: Vote Conservative for a stronger economy was all they had to say. To reduce politics to a shopping list of policies (energy prices, bedroom tax etc.) does not sway many votes and is rather insulting to the electorate who are looking to what kind of government they want.

Silence on the recovery

The failure to defend the Labour Government actually left the LP in a difficulty when it came to explaining the recovery, having predicted disaster. They have appeared to deny there was a recovery. It should have been acknowledged that, however slow and late, there has been the start of recovery. While real wages have not moved – because there has been no improvement in productivity – most households are better off, with record numbers in employment and although the earnings ladder may not be moving many individuals are moving up the ladder.

To many, the Tory policy of austerity appears to be working, when in fact the economic growth can partly be explained by the Tory failure to deliver. As Balls has pointed out, the reduction in the deficit has not matched the rhetoric. Second and most important has been the massive (£375 billion) quantitative easing – in other words, printing money which would have horrified earlier Conservative chancellors. This has injected money into the economy but without the benefits to the infrastructure that public spending might bring. Instead it has inflated the price of assets of the richest people, widened inequality and fuelled a housing bubble. In addition, there has been the injection of capital from around the world– particularly into London – encouraged by the stable legal system and the tax loopholes created by Brown and Osborne

We are not in a sustained recovery. There has been no improvement in productivity and therefore no increase in wages. Earnings are more unequal but more alarming is the increase in wealth inequality having distorting effects on the economy.

Silence of the contenders

I could not say that these decisions were the cause of Labour’s defeat. There were other problems: Labour’s themes seemed to focus on the more marginal workers rather than the experience of the wider working class and at times made the party sound like a campaign group. But these decisions in 2011 definitely shaped the defeat and they hang over the party now.

At the time of writing, several weeks into a leadership contest, not one contender has felt able to discuss the economy. In their careful statements it seems that the candidates to want to accept Tory economic axioms (they cannot be called a theory) and to move on – with some even suggesting that there is moral virtue in a balanced budget. To be taken seriously by the media it appears that they have to say that the Labour Government spent too much. There is rhetoric about reaching parts of the electorate, but we cannot tailor policies, whether for those who left in 2010 or the new “aspirers”, if we are not trusted on the economy. Labour will not do that by saying that the Tories were right all along.

1 COMMENT

  1. With reference to Labour’s economic record I think several things need to be said. Firstly, while it may be true that Labour’s public spending was not the cause of the global downturn – which in any case was caused by private rather than public indebtedness – there were several policies which in particular exacerbated the nature of the UK’s crisis. Item number 1. the property bubble. Strictly speaking monetary policy is the remit of the Bank of England, which is supposed to be independent. However in recent years there has been a drawing together of the Treasury and the central bank to the extent that the central bank has become increasingly politicised. In addition to setting the inflation target, and appointing the governor of the BoE, it is now the general understanding that government monetary policies are jointly formulated and overseen by both Treasury and BoE.

    So what you might say. Well this means that the BoE and the Treasury were jointly responsible for monetary policy during Labour’s time in office, which consisted of blowing up the house price bubble. This meant that the UK was acutely vulnerable to any downturn in the global housing market.

    ”That many other countries experienced economic difficulties (2007/2008) as the United State owed significantly to the fact that many of the features that charactirised the run-up to the sub-prime crisis in the US were present in other developed economies as well.” (This time is different – Rogoff and Reinhart). In short those countries which had adopted US style ultra-loose monetary policies which underpinned the 2002-2007 boom/bubble, viz., the US, UK, Spain, Iceland and Ireland, were particular badly affected.

    During the boom period Brown, Balls and BoE Governor sat on their hands and took the occasion to congratulate themselves on the fine job they had done. Then we had all the bullshit about the end of boom-and-bust and the sycophant drivel in the Guardian by Polly Toynbee. The bubble could have been avoided by tightening up monetary policy in the early stages of the bubble, but no, the Balls/Brown duo were more intent on basking in the sunshine of the debt-fuelled feel-good factor.

    Secondly the alleged ‘recovery’ under Labour. Well this was supposed to have taken place between 2008-2010, which is a very short time to measure the success or otherwise of any economic policy. Certainly during this period massive bank bailouts aided recovery in this sector whilst also pushing up stock market prices. It also put private debt on to the public balance sheet. A debt which of course needed servicing – and now stands at £1 billion per week – and thus provided the rationale for the proponents of austerity.

    Additionally the Walmartisation of the UK labour force – following the US model of course – has been a feature of all UK governments since 1979. Quantitative growth is to be welcomed, but these figures may be exaggerated by counting part-time jobs as full time and the increase of virtual slave labour of zero-hour contracts.

    Thirdly, we should not read too much into ‘official’ figures; inflation, GDP, unemployment and so forth. We live in an economy where prices are manipulated: Libor rates, currency markets, futures markets, precious metals; we also live in a world where economics statistics are manipulated – usually by changing the definition. Claims relating to economic performance indicators are more often than not political constructions.

    Finally the sentence:

    While real wages have not moved – because there has been no improvement in productivity – most households are better off, with record numbers in employment and although the earnings ladder may not be moving many individuals are moving up the ladder.”

    Seems self-contradictory. A statement of belief not underpinned by any factual analysis.

    Let’s be frank, the Labour government of 1997-2010 rode on the crest of debt-fuelled growth, a feel-good factor and the sub-prime house boom; just like the Tories did in 2015. As did most property obsessed government in the developed world. It was an irresponsible policy which hit a brick wall in 2007/2008. It might be a good idea to start admitting this before we talk about renewal of the Labour party.

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