Funeral workers on strike
There is no use soft-soaping Thursday’s election result. It has handed the Tories the slenderest of majorities for their government, and they will exploit this mandate mercilessly.
The result is more the outcome of our perverse electoral system than it is of a major surge in support for the government. Between them, the old Coalition parties, Tory and Lib Dems, saw their votes decline by 3.7m, or 14%. Parties opposing the Coalition from the left saw their votes increase by 2.6m. (Ukip saw their vote rise by a further 2.9m.) The Tories deftly managed to shore up a relatively weak position by, as John Rees has written, using the Lib Dems as a human shield, and then “feeding on the corpse”.
A weak leader surrounded by his enemies
Nonetheless, the failure of Labour to capitalize on anti-Coalition feeling is striking, and unavoidable. It cannot be exclusively written down to the competence or otherwise of Ed Miliband. Miliband was always in a precarious position, and had been since his election as leader in 2010. The peculiarities of Labour’s internal electoral system meant that whilst MPs and party members voted for his Blairite brother, the significant support he won from trade unionists enabled him, just, to clinch victory. But once in office, this meant that the people closest to him did not support him: his MPs did not back him, and his party members did not back him. Trade unionists, each of whose vote, thanks to the “electoral college” system, counts for 0.0077% of each MP’s vote, are furthest removed from the daily life of the party and from its full-time machine. The machine itself was, of course, largely in the hands of Blairites. The Blairites themselves are, through Progress, by some distance the best-organised faction within Labour, enjoying billionaire funding and running what amounts to a “party within a party”.
All of this substantially helps account for Miliband’s weaknesses as leader: his flashes of decent left instincts (taking on Murdoch; arguing for energy price freezes), smothered by Blairite stodge (the “Budget Responsibility Lock” on the deficit; the anti-migrant mugs). The stodge won. The Party has been, quite intentionally, reconfigured by the Blairites to make even small nods towards the left a difficult feat of endurance. Miliband was never able to overcome this barrier and faced, right up until the election campaign started, a concerted and destabilizing whispering campaign originating with the party’s right-wing.
The Labour Right are already attempting to blame the defeat on these paltry nods leftwards. But this won’t wash, for two reasons. First, nods towards the left were fairly uniformly accompanied by a rise in Labour’s own opinion poll standing. And the overwhelming win for the SNP in Scotland is a standing rebuke to the idea that an anti-austerity, pro-welfare campaign was doomed to fail. Despite their supposed “pragmatism”, if nothing else Miliband’s time in office revealed just how deeply ideological the New Labour project always was.
Second, the core messages of the campaign remained firmly in the hands of the right. On the critical issue of austerity, Miliband and his Shadow Chancellor, Ed Balls, conceded all the ground. Labour’s manifesto, far from being some reversion to a pre-Blair past, on the issue of spending cuts was to the right of anything Blair presented. It promised merely a lower rate of spending cuts, not an end to spending cuts. This lower rate, of course, allowed a clear gap to be created between Tory and Labour spending plans. The distance between £30bn minimum cuts implied by the Tories, and the £7bn minimum implied by Labour, is enough to make a material difference in office.
However, these are variations on a theme, not a different tune entirely. It meant reducing the intensely political questions of taxation and spending too much to a purely technical issue: the rate of spending cuts, rather than their fundamental desirability. Labour further played up its technical and managerial credentials by making the – short-sighted and anti-democratic – offer to have their spending plans “audited” by the Office for Budget Responsibility.
Whatever marginal nods leftwards were made – the mansion tax, the energy price freeze, reform of private rental contracts – disappeared behind a core message that did not deviate from New Labour’s: that economic management must be depoliticized if “credibility” with swing voters is to be secured.
A rod for their own backs
After Ed Balls’ short-lived attempt, in his 2010 Bloomberg speech, to present a credible case against austerity, no senior Labour figure meaningfully broke with the consensus upheld by the Conservatives. This was an error in two parts: Labour’s senior team, populated as it was by discredited figures from Gordon Brown’s last administration (Balls himself chief amongst them), could not plausibly claim to be competent managers in conditions of austerity. Every plea they made for their own fiscal rectitude, every promise they offered to continue the squeeze merely reinforced a narrative that the Conservatives had claimed as their own, and rebounded to the Tories’ advantage. Polls on the issue recorded no benefit to Labour from this masochism. At the same time, every nod they made towards the left was immediately rendered void by their primary commitment to the austerity agenda. They lost on both sides of the argument.
Yet this was a double-bind of Labour’s own making. Cameron and Osborne, having previously pledged fealty to New Labour’s spending plans, moved rapidly after the crash of autumn 2008 to offer austerity as the resolution to the crisis. The rhetoric of “bare cupboards” and “maxed-out credit cards” was established then. But it was not until around the summer of 2009 that Alastair Darling, Labour’s Chancellor at the time, conceded the austerity line. His last Budget, in 2010, offered “deeper and tougher” cuts than Thatcher. Labour bound itself by the austerity rules, passing the 2010 Fiscal Responsibility Act. This allowed the Tories to claim their own cuts were merely an extension of what Labour, too, had promised, leaving Labour unable to credibly claim it was an opposition – because, on the essentials, it was not. By the election of May 2010 the narrative of excessive Labour expenditure was well-established, with Labour foolishly playing along.
Rhetoric wins, reality loses
The extraordinary thing in all this is that, of course, the Tories, once elected, did not stick to their promises on expenditure – not, at least, to the extent they proposed. The first two years of the Coalition’s time in office saw diligent efforts to drive through cuts on the scale initially laid out in the June 2010 Emergency Budget. As a share of government spending, austerity measures enacted in the UK over this period were the third worst in Europe, behind only Greece and Luxemburg. With weary predictability, and as detailed by Paul Krugman in a recent essay, these cuts led an economy that was returning to growth by mid-2010 straight back into recession and stagnation over the next two years. The Treasury’s response, from no later than early 2013, was to ease off on the programme of spending cuts – and, at the same time, unloosen the housing market. By 2014, new austerity measures had been reined in, whilst households, having been collectively paying down their debts since 2008, had become net borrowers once more.
Government spending, plus a housing boom that then sustained a return to consumer borrowing, were the crucial drivers of recovery from early 2013 onwards. The Coalition, in other words, failing in its initial ambitions, had defaulted back to a pattern familiar from New Labour’s year in power: debt-led growth. Planned austerity, it is true, and to cope with its earlier failure, was pushed further into the future, the programme of spending cuts being extended and accelerated to 2020. Actual austerity was then held to a seriously reduced pace. Ironically, the total volume of deficit reduction delivered almost exactly matched that proposed by Alastair Darling in 2010, but rejected by Osborne at the time as excessively lenient. The Tories, in office, had inadvertently delivered Labour’s cuts targets, and Labour’s debt-led growth.
Yet the Conservative rhetoric remained identical: the “Long Term Economic Plan” of spending cuts was being held to and was, as economic growth now demonstrated, working. The truth was anything but: at best, the Coalition had taken us back to the conditions of the early 2000s, minus the mild redistribution of New Labour, at a higher level of indebtedness and in conditions of (until recently) deteriorating living standards and without the bonus of rising government expenditure. None of the brave predictions made in the Office Budget Responsibility’s forecasts that accompanied the 2010 Emergency Budget had come to pass: not on rapidly rising real wages, not on a closing trade deficit, not on the investment boom, not on the “rebalancing” of the economy away from services to manufacturing.
The Tories’ rhetoric became detached from their practice. They had created a narrative which, in its own perverse way, could be presented as rather noble: that we were making sacrifices now to relieve future generations of a terrible debt burden. If, sotto voce, the actual impact of the cuts was felt largely by someone else – specifically, those not likely to vote Conservative – then this might be unfortunate but was not undesirable.
This latter point needs underlining. Living standards had declined under the Coalition more than at any time since at least the Industrial Revolution. But the slump in oil prices drove inflation, particularly on essentials like fuel and food, to record lows – even turning negative on some items. Combined with a softened pace of austerity and rising house prices, many voters could doubtless feel that life had turned out not too bad, after all. The insistent drumming from a very largely pro-Conservative press reinforced the message: that austerity was being applied as planned, and that the plan was delivering.
The narrative trumped the reality. To manage the economy at all, and not consign it to conditions of permanent stagnation, required a degree of “Keynesianism” that was left unacknowledged in the official rhetoric, holding to a far slower pace of expenditure cuts than planned. It scarcely mattered that Osborne had, for example, borrowed on a colossal scale during his time in office, more than every previous Labour government added together; or that the deficit was, by 2015, some £50bn greater than his original forecast. The narrative dominated.
To this disjoint was added specific promises, made during the election campaign, of £7bn tax cuts and £8bn additional spending for the NHS. This was, of course, entirely at odds with the rhetoric of austerity and sound economic management: the latter figure was jumped on by George Osborne simply after hearing this was the likely amount needed to meet future demands on the NHS.
Labour did not have a clue how to deal with this. Trapped by a double-bind its own former leadership had created, it was left attempting to bolster its managerial credentials at a time when its opponents had given up bothering to play the managerial game. It was trying to re-fight battles from the last century, using New Labour’s weapons, because it had left itself with little choice. The Tories fought hard, and politically; Labour stuck to the Blairite playbook, and tried only to look like nicer managers.
The correct response would have been to offer an alternative narrative, breaking the double-bind on both sides. Osborne’s slowing of the pace of cuts would have been easier to deal with if cuts had already been rejected in toto. It was no use offering to soften an austerity that had already, in practice, been softened. It was necessary to offer an entirely different story on the economy: one that, as a minimum, stressed spending for the public good, and the desirability of restraining the wealthy. It was necessary, in other words, to reject fighting on the perverse grounds being better managers of austerity, but to stake out new territory.
That it could not reflects the accumulation of years’ of Blairite corrosion. The party is gummed up, from top to bottom, with rust. The joints are just about capable of delivering the correct response, of responding to its historic core of voters and supporters, and transmitting this to its centre. But the mechanisms do not function properly, and the party centre scarcely moves.
No friends in the north
Labour’s second major error was still more painfully self-inflicted, but reached further into the party’s internal workings. It wasn’t only a problem of joints frozen by New Labour, although that did not help, but of the structure itself. The party’s historic attachment to the Union, combined with a Blairite desire to be seen as a “credible”, centrist voice in the referendum campaign led it into the catastrophic error of supporting the dismal Better Together campaign.
It had the option of running a separate Labour for No campaign, or at least taking the one that existed somewhat more seriously. Much as he did just before the 2010 election, Gordon Brown, dredging up otherwise long-forgotten social democratic instincts, made some efforts to express just such sentiments before the poll, securing the “Vow” and Tory plaudits in the process. Had Labour established itself as a distinctive voice for Unionism within the No campaign, then, whatever happened in the vote, it would not have been left irredeemably tarred by the dreadful apparition of its leader begging alongside the Tories for the Scots to (in David Bowie’s plaintive words) “stay with us”. Confronted with the resounding grassroots success of those fighting for independence, notably around the Radical Independence Campaign, Better Together was left rudderless.
Instead, the perennially hapless Alastair Darling - making his second appearance here - was left to flap and squawk at the front end of a campaign that was widely perceived, with SNP encouragement, to be little more than a Tory front. Labour’s historic attachment to the Union, rock-solid since at least the 1930s, as guarantor of a powerful state able to enact social reforms here merged with its more recent attachment to Blairite triangulation. The campaign that managed to stave off independence only to spark up an immense reaction in the SNP surge that has, today, obliterated Labour’s seemingly immovable domination of Scottish politics.
Even then, right up to the election, Labour had the option of containing the rush to the SNP. The desire to appear credible in its commitment to austerity merged with its instinctive Unionism, Miliband responding to Tory goading on the likelihood of an SNP-Labour deal by improbably ruling any such prospect out. This was, as everyone knew, nonsensical: a quick calculation of the likely distribution of seats showed Labour only taking Downing Street with the support of the SNP. But Miliband could not confess to being open to a deal without also seemingly handing Nicola Sturgeon the keys to the austerity “triple lock”. And he could not hand Sturgeon that key without seemingly slighting Labour’s profound identification with the Union and its post-1945 legacy. In the event, Miliband’s desperate insistence were treated as plainly not credible by voters, leaving them wide open to Tory grandstanding on the impending Scottish doom a Labour government would entail. Labour was wound tightly into a tangle on the issue that its leadership could not readily unpick.
