Reclaiming Labour’s Economic Record

Reclaiming Labour’s Economic Record

In last Tuesday’s edition of the Financial Times Alan Milburn and John Hutton called on Ed Miliband to be less timid in defending Labour’s economic competence and to challenge the Conservative’s domination of fiscal policy debates. Central to their argument was the claim that Miliband and Shadow-Chancellor Ed Balls have “worked hard to distance themselves from New Labour” and failed “to set the record straight and reclaim ground foolishly bequeathed to their opponents.”

Certainly there appears to be some merit in this argument. Public spending under Tony Blair and Gordon Brown was 37 percent of GDP, compared with 40 percent under Margaret Thatcher and John Major. Blair and Brown also reduced Britain’s deficit and national debt and even upon leaving office in 2007 only one member of the G8, Canada, had less public debt. While the Tories have been quick to accuse the last Labour government of profligacy, such charges are themselves open to scrutiny. In 2007 then Shadow Chancellor, George Osborne, committed to three years of 2 percent spending increases, should the Conservatives be elected. This pledge was made on the basis that the tax system could be simplified to reduce wastage and increase the revenue available for public expenditure.

However, as the recession took hold in 2008, the promise to match, and even better, Labour’s spending was quietly dropped and replaced with a new rhetoric: Labour overspent the country into economic collapse. Since the 2010 General Election the term “inherited mess” has been routinely wielded as justification for Tory-led spending cuts across the public sector. In turn, the issue of falling tax receipts, a major cause for the deficit spiralling after 2008, has largely gone unaddressed, despite income tax receipts remaining relatively low and unlikely to rise in the short-medium term. Perhaps more pertinent, in respect to events in Athens this week, Labour resisted entering the Euro and in doing so helped to safeguard fiscal autonomy.

With this in mind it seems that Milbun and Hutton’s argument has some merit. Why then has Labour proved unable to articulate this message to the electorate?

In part, Ed Miliband has sought to institute a clean break with the past. Perhaps to assuage the more radical fringes of his party, for whom the New Labour project was never particularly palatable in spite of electoral sense, Miliband has looked to re-orientate the party around a vision devoid of the division that typified the Blair and Brown years.

Similarly, the general public and the media have been quick to seize upon the message that Labour overspent, constructing a narrative from which it is difficult to move forward. This position has certainly not been helped by a lack of consistency on Labour’s part. In 2011, Miliband stated: “The Conservatives and the Liberal Democrats I think are pedalling a very dangerous myth because they want to tell people that it was somehow all because of a decade of overspending under Labour. It wasn’t. It was because of a financial crash – a financial crash that happened all round the world.” However, since then Ed Balls is perhaps the only major figure within the party to actively defend this position and he is increasingly being side lined due to a “toxic” reputation amongst voters.

Although the NHS seems to have trumped the economy as the most important issue to voters, it remains to be seen whether Labour can sustain their relentless ploughing of this furrow for the next 97 days or so. Having told Kirsty Wark that “there is still a role for private and voluntary providers,” Andy Burnham looked shaky at the despatch box on Wednesday as he struggled to articulate which specific aspects of privatisation he opposed and why. Similarly, messaging on Tory plans for privatisation fail to deal with that fact that only 1.5% of the NHS has been sold off since 2010, compared with 4.4% under the last Labour government.

The questions of economic credibility will undoubtedly be asked repeatedly before May 7th, not least in the prospective leaders’ debate, if it goes ahead. While the 1997-2010 Labour Governments are undoubtedly open to criticism, Ed Miliband would do well to recognise their positive attributes and make steps to reduce the Conservative’s advantage in the economic sphere. An election is unlikely to be won on health and social care issues alone and by ceding the economy to their opponents, Labour risk losing support from the still undecided and swing voters who will be crucial if Miliband is to enter number 10 on May 8^th.

What Does the Green ‘Surge’ Mean in the Marginals?
The past fortnight has seen a rise in interest in the fortunes of the Green Party. They have not only hit double digits in some polling, but have come under increased media scrutiny. Party leader Natalie Bennett was a featured guest on Sunday Politics and in-depth analysis of their policies, and costings, was conducted by the Financial Times, The Times and the Spectator.

Although these, relatively, conservative titles were critical of Green spending plans, their relentless focus on environmentalism and a move towards open borders, they also contained a germ of contentment and a recognition that the Green ‘surge’ was likely to be detrimental to the Labour Party. Having lost ground to UKIP on the right, the Conservative Party have found some hope that the Greens can do the same on the left.

On the basis of current polling it seems that there are a number of target seats where the Greens increasing their share of the vote could help to prevent Labour from winning a majority.

Hampstead and Kilburn is arguably the most marginal seat in the country. In 2010 Labour took 32.8 percent of the vote, compared to the Tories 32.7 and the Lib Dems 31.2. With the Lib Dem vote likely to decline Labour strategists would normally predict an increase in their share of the vote.

However, the Green campaign on the ground has been fierce and with a strong local candidate, in the form of Dr. Rebecca Johnson, an expert in nuclear disarmament, they pose a significant headache for Labour. It is telling that activists across London and the south east have been on call in the seat since last year and with veteran MP Glenda Jackson stepping down they cannot rely on the incumbency factor helping maintain their share of the vote. Similarly, with UKIP polling poorly in London, Nigel Farage’s party are unlikely to hit the Tory vote as hard as in other parts of the country.

Perhaps a more interesting proposition is Sheffield Hallam, the seat currently held by Lib Dem leader and Deputy Prime Minister Nick Clegg. In 2010 Labour took just 16 percent of the vote, compared with the Lib Dem’s 53 percent. It is notable that the Greens did not stand a candidate.

However, in the final round of constituency polling last year, Lord Ashcroft placed the Lib Dems on just 31 percent, with Labour trailing by 3 points. The Greens meanwhile were riding high on 9 percent. While it would be a bold, and perhaps naïve, assumption to suggest that these are votes that would naturally go to Labour, it certainly raises questions as to their potential impact on the make-up of the next government.

While much has been written about the potential damage Nigel Farage and UKIP could inflict on the Conservatives, the Greens pose their own, unique challenge to Labour. Although it is unlikely that they will take more than one seat their growing popularity coupled with Labour’s struggle to project a clear, progressive message could see them left as de facto kingmakers in the most marginal constituencies. It will be no surprise if the next weeks see Labour reinforce their emerging ‘vote Green, get blue’ message as they seek to persuade voters that they are the only option to successfully remove David Cameron.

This article was originally published last Friday for subscribers of Whitehall Weekly. You can subscribe for free here.

Jack Taylor

Jack Taylor

Consultant at Keene Communications
Jack’s background is in domestic politics, having worked in various research position in both the Commons and the Lords. He has a particular interest in matters pertaining to infrastructure, transport and development.
Jack Taylor

About the Author

Jack’s background is in domestic politics, having worked in various research position in both the Commons and the Lords. He has a particular interest in matters pertaining to infrastructure, transport and development.