Sunday, 6 October 2013

Return to growth has helped Labour more than the Conservatives

Blog for ShiftingGrounds on 30th Sept
Return to growth has helped Labour more than the Conservatives

Wandering around Labour conference last week, it was hard not to be struck as much by what wasn’t being discussed as what was. Among everything, there was one particularly notable absentee. It’s something which should give the Conservatives, who kicked off their get-together in Manchester yesterday, more pause for thought than they might initially grant it.

Flicking through the fringe guide in Brighton, I struggled to spot a single event dedicated to austerity. By comparison, last year’s conference fizzed with debate on double dip recessions, multiplier effects, what a fiscal stimulus might or might not look like. This year: barely anything. The trench warfare of ‘austerity vs growth’ that so dominated the first few years of this Parliament is dead, it seems. Largely it’s been killed off by a nominal return to growth, of sorts, and the Labour leadership’s recent decision to back Conservative 2015/2016 spending plans.
In many ways this is profoundly depressing. The intellectual case against the Government’s economic strategy was and remains overwhelming. While it continued to drag the country back into recession or flat lining growth, it was perfectly understandable that pointing this out consumed the large bulk of Labour’s emotional and political energy.
But the truth is the party have long been fighting an uphill battle with public opinion on this issue. Not least this is because, as widely noted, the Conservatives and their friends were very adroit at framing the problem as one of over-borrowing and over-spending; credit card metaphors and all. Whatever the empirical merits of its case, the left by comparison has failed to come up with a critique of austerity that resonates outside the pages of the London Review of Books.
Consequently, even as economic news worsened, while the deficit and economic crisis were the dominant concern in British politics, Labour were – and probably always will be – at a disadvantage.
Thus, as the agenda has moved on as growth filters back, it’s been to the party’s advantage. While I still think there were less painful ways of neutralising the issue, the pledge to match the Coalition’s 15/16 spending plans has also at least made it harder for the Conservatives to allege that Labour will ‘turn the taps back on’.
The resulting breathing space has allowed Labour to move on to broader, longer-term and more populist themes that go with the grain of public opinion: who benefits from growth, the cost of living and the fundamental structural problems in our economy. Ed Balls gave a much more rounded speech than in recent years, including on childcare among other issues. Chukka Umunna spoke encouragingly on economic democracy and employee representation within companies. And in the best speech of his leadership so far, Ed Miliband outlined the big strategic themes that would define his premiership: a global race to the top, not the bottom, and an economy that works for working people.
Though more will need to be done to flesh all of this out, already Labour are making head way, as the poll bounce off the back of Miliband’s pledge on energy prices has shown. They have set the agenda and started to forge a new centre-ground, tapping into what Miliband advisor Tim Horton has called ‘the angry middle’. It’s hard to imagine they would have the political oxygen to do so if the economy were still in the tank as the party gathered in Brighton.
The Conservatives, meanwhile, are left in a difficult position. Growth may be strong enough for Labour to see the need to broaden its pitch, but it isn’t strong – or felt – enough for the public to give the Conservatives any real credit in the polls, or for the party to credibly be triumphant. Labour’s new living standards agenda also plays to three key Tory blind spots. The first is that the key squeezes on people’s disposable incomes – energy, transport, housing and the like – along with stagnating wages, all represent failures in private markets. All ultimately require critiques of and interventions in those markets.
This is not something Cameron and co. feel instinctively at home with. Like most politicians who cut their teeth in the pre-crash era, they are much happier reforming the state than the market. When they do offer answers they tend towards the tentative or technical. You feel they will probably always struggle to tap into the public’s anger on these issues, or match Labour for zeal.
The second weakness is Osborne’s continued faith – repeated over the weekend – that rising growth will be enough to help increase living standards across the board. The Resolution Foundation have long shown that this is no longer the case, and has not been since 2003.
Finally, and most pressingly, is that Cameron has long struggled to define himself or his Government beyond the ‘national emergency’ of tackling the budget deficit. Both in opposition and in government he has done little to map out what kind of country he would like Britain to be in twenty years time. There is little sense of mission beyond the bottom line. The ‘Big Society’ was his first and doomed attempt at redressing this. The ‘Global Race’ narrative is probably his best effort, but it remains clunky and lacks cut through with the public.
All of which represents a significant opportunity for Labour as the agenda moves beyond the narrow politics of the deficit, though none of which should be a cause for complacency for the party. Unfortunately, welfare in particular is still an issue in which the Conservatives are able to mine vast reservoirs of public enmity – and the Labour leadership still need to do a little more to grapple with the issue.
But the last few weeks have shown anything, it’s that the second half of this Parliament will be fought on much tougher ground for the Government than the first. The facts of British political life are no longer Conservative.