Wednesday, July 3, 2013

Discussion: Labour and the spending review - Peter Rowlands

Discussion:  Labour and the spending review - Peter Rowlands  

Labour’s acceptance of Tory spending plans for 2015 – 16 is a watershed moment. I believe it to be fundamentally wrong and a move that is likely to lower Labour’s vote in 2015 and possibly cost it a majority or keep the current coalition in place.

Why did the Labour leadership decide on this stance? Presumably because they decided that those that still see the deficit as primarily Labour’s fault will have their views confirmed by any spending commitments by Labour beyond those of the coalition, so that in order to win over at least some of these people we have to accept a huge cuts programme, at least in total terms, and be rather ambiguous about additions to capital spending.

What this means is that Labour has a position that is now far more severe than that of  Darling , which was to make cuts of about one half of the Tory programme. It is also completely contradictory in that the core of the Balls critique of Tory policy is of a cuts programme that disproportionately lowers tax receipts in such a way that the deficit can only be paid off over a very long period of time and at enormous cost. Having conclusively won the argument we are now saying that we will continue with precisely the policies that we claim are wrecking the economy!

Large numbers of Labour voters will be mystified at this.  Many will find that they now have no incentive to vote at all, while some will switch to voting for the Greens, Respect, TUSC or the new ‘Left Unity’ party that is scheduled to be launched later this year and has been provided with a potent recruitment vehicle by Labour’s change of direction. The total vote for these other parties is unlikely to be huge but in many constituencies it could rob Labour of victory and thus maintain the present coalition in power, doing on the left what the Tories fear from UKIP on the right.

Labour’s strategy, as in 2010, is based on a fundamental misreading of what is needed. In 2010, and apparently now, Labour was pitching to the middle ground, ‘Middle Britain’, those won over by New Labour in the late 1990s. This strategy was in one sense very successful, as Labour’s middle class voters largely stuck with it in 2010 (Social class groups A, B and C1). Unfortunately Labour’s working class voters didn’t  (Social class groups C2, D and E), defecting to the Tories or just not voting in substantial numbers, and causing the worst result, and only marginally better, at 29%, since the 1983 election.

Since then Labour’s fortunes have improved considerably, mainly due to a transfer of support from Lib-Dem voters opposed to Lib-Dem participation in the coalition. These voters have been shown to be more left wing than previous Labour voters, not surprisingly as these were the people who transferred to the Lib-Dems after the Iraq War when on this and other matters they were to the left of Labour.

This ‘progressive majority’ is threatened by Labour’s embrace of austerity.  Those previously Labour working class voters who didn’t vote or voted Tory will have no incentive to come back to Labour. Fewer will vote Tory, but many will still abstain or go to UKIP or the new left party. The ‘left’ Lib-Dems will likewise have no reason to stick with Labour; some will even revert to the Lib-Dems as their position is no worse than Labour’s, while the more left wing will vote for one of the left parties or the Greens. (*)

The net effect therefore of Labour’s change of course is that while it may retain some ‘Middle Britain’ votes that might otherwise have gone to the Tories or Lib-Dems it stands to lose far more from those groups who would have supported even an ‘austerity lite’ position but not one which is indistinguishable from that of the coalition. Votes will be lost to abstention, to UKIP, to the Greens, to the new left party, to Respect, to TUSC, even to the BNP/NF, and would be likely to cost Labour a majority at the  election.

Yes, it is true that more voters still blame Labour than the Tories for the deficit (about 36% to 26%), but that has improved since 2011, and crucially is likely to apply much less to the two groups pinpointed above. A growth strategy which would appeal to these two groups is essential, and Labour must revise its current position and adopt such a strategy before it is too late.

Polling figures are hardly a ringing endorsement of the coalition and their economic policies. 60% think the economy is being badly managed, 57% that the cuts are being administered unfairly, and only 27% support the Tories on the economy as against 25% Labour. However 59% see the cuts as necessary, a figure that would undoubtedly be lower if Labour had consistently advocated a growth strategy.

The new line also reflects the internal struggle within the party , and must register a decisive advance for the ‘Blairite right’, which the recent interventions by Blair, Mandelson and co. no doubt assisted. This will further alienate left wing activists and many affiliated unions who are among the strongest supporters of a growth strategy.

Let us hope that common sense prevails, and that Labour reconsiders its position and adopts a  growth strategy that clearly distinguishes us from the other main parties. This is the route that is most likely to secure a Labour majority at the next election.

(*) See Fabian Review articles by Andrew Harrop:

May 2012   ‘2015 victory in Labour’s grasp as Ed unites the left’

Feb 2013      ‘Stay at home voters are the key to Labour victory’.

All figures quoted are based on YouGov polls.

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