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Ed Miliband will fail if he locks himself into Tory austerity Ed Miliband will fail if he locks himself into Tory austerity
(5 months later)
Without an early economic turnaround or a Labour implosion, Ed Miliband is likely to be the next prime minister. Nick Clegg's announcement this week that he would be ready to serve in a Miliband-led government is a sure sign David Cameron's coalition buddies have come to the same conclusion.Without an early economic turnaround or a Labour implosion, Ed Miliband is likely to be the next prime minister. Nick Clegg's announcement this week that he would be ready to serve in a Miliband-led government is a sure sign David Cameron's coalition buddies have come to the same conclusion.
For all the talk about the softness of Labour's eight-point poll lead and the public's lack of enthusiasm for its leader, the underlying reasons aren't hard to find. Whether or not growth picks up from the current IMF forecast of 0.7% for the year, real wages and living standards have long been the key to British elections.For all the talk about the softness of Labour's eight-point poll lead and the public's lack of enthusiasm for its leader, the underlying reasons aren't hard to find. Whether or not growth picks up from the current IMF forecast of 0.7% for the year, real wages and living standards have long been the key to British elections.
No governing party has won an election on the back of falling real wages since the 1970s, as Labour found to its cost in 1979 and 2010. And no party has lost office when real wages for the majority were rising, with the single exception of John Major's defeat in 1997 – though that followed the humiliation of Black Wednesday and 18 Tory years in power. On current projections, average real wages will have fallen a drastic 10% by the end of this parliament.No governing party has won an election on the back of falling real wages since the 1970s, as Labour found to its cost in 1979 and 2010. And no party has lost office when real wages for the majority were rising, with the single exception of John Major's defeat in 1997 – though that followed the humiliation of Black Wednesday and 18 Tory years in power. On current projections, average real wages will have fallen a drastic 10% by the end of this parliament.
Of course it's perfectly possible that a pre-election uptick, Labour mistakes and the burden of its record, or public pessimism that any government can turn the economy round could change that calculus. But, as elsewhere in crisis-ridden Europe, the scale of the coalition's economic failure and fall in voters' living standards clearly favours the opposition.Of course it's perfectly possible that a pre-election uptick, Labour mistakes and the burden of its record, or public pessimism that any government can turn the economy round could change that calculus. But, as elsewhere in crisis-ridden Europe, the scale of the coalition's economic failure and fall in voters' living standards clearly favours the opposition.
Which is why the heat has now been turned up on the Labour leader, inside and outside his party. The stakes are far higher now a Miliband-led government no longer looks a remote possibility. It started with Tony Blair and a gaggle of New Labour grandees.Which is why the heat has now been turned up on the Labour leader, inside and outside his party. The stakes are far higher now a Miliband-led government no longer looks a remote possibility. It started with Tony Blair and a gaggle of New Labour grandees.
Miliband must not "tack left on tax and spending", they declared, but instead cleave to the tried and tested formulas of the 1990s. Meanwhile, anonymous "senior Labour figures" complained that Miliband was soft on welfare claimants and that union-backed candidates were being picked for next year's European elections.Miliband must not "tack left on tax and spending", they declared, but instead cleave to the tried and tested formulas of the 1990s. Meanwhile, anonymous "senior Labour figures" complained that Miliband was soft on welfare claimants and that union-backed candidates were being picked for next year's European elections.
The Labour leader politely rebuffed his predecessor, saying the party had to change and "learn from its mistakes". But when Len McCluskey – leader of Britain's biggest union, Unite, and fresh from re-election with 144,000 votes – warned Miliband he would go down to defeat if he allowed himself to be "seduced" by Blairites and opted for "austerity-lite", the Labour leader's response was ferocious.The Labour leader politely rebuffed his predecessor, saying the party had to change and "learn from its mistakes". But when Len McCluskey – leader of Britain's biggest union, Unite, and fresh from re-election with 144,000 votes – warned Miliband he would go down to defeat if he allowed himself to be "seduced" by Blairites and opted for "austerity-lite", the Labour leader's response was ferocious.
McCluskey's comments were "represensible" and "disloyal", Miliband said. That was followed by another panicky denunciation of the leftwing Respect MP George Galloway as "awful" after it emerged the two had met privately – and of union speculation about a European-style general strike against cuts as a "terrible idea".McCluskey's comments were "represensible" and "disloyal", Miliband said. That was followed by another panicky denunciation of the leftwing Respect MP George Galloway as "awful" after it emerged the two had met privately – and of union speculation about a European-style general strike against cuts as a "terrible idea".
It's scarcely surprising that the Labour leader tiptoes round his Blairite critics, backed as they are by the media and corporate establishment, and lashes out at leaders of Labour-affiliated unions, ludicrously portrayed as puppet masters. And McCluskey unwisely named the shadow cabinet's Blairite seducers, which will make it more difficult for Miliband to move them in any future reshuffle.It's scarcely surprising that the Labour leader tiptoes round his Blairite critics, backed as they are by the media and corporate establishment, and lashes out at leaders of Labour-affiliated unions, ludicrously portrayed as puppet masters. And McCluskey unwisely named the shadow cabinet's Blairite seducers, which will make it more difficult for Miliband to move them in any future reshuffle.
But McCluskey is very far from alone in fearing Labour risks being too timid in the face of a historic crisis – and failing to offer a credible alternative to voters now taking the full brunt of its impact.But McCluskey is very far from alone in fearing Labour risks being too timid in the face of a historic crisis – and failing to offer a credible alternative to voters now taking the full brunt of its impact.
As the GMB union leader Paul Kenny puts it: "New Labour won't win again. They need to drop any suggestion that all we'll do is cut a bit slower than the Tories. It's all about jobs and spending power." And Labour's backbench revolt in March over benefit sanctions on unemployed people refusing private "workfare" schemes shows that kind of concern is well represented among the party's MPs as well.As the GMB union leader Paul Kenny puts it: "New Labour won't win again. They need to drop any suggestion that all we'll do is cut a bit slower than the Tories. It's all about jobs and spending power." And Labour's backbench revolt in March over benefit sanctions on unemployed people refusing private "workfare" schemes shows that kind of concern is well represented among the party's MPs as well.
Labour leaders' sensitivity over a rupture with Tory austerity was on display this week when Miliband tried to avoid saying his plans for a VAT cut would initially be paid for by increased borrowing. That was later corrected. But it was a foretaste of the pitfalls around the far more important decision over Labour's cuts and spending plans after 2015. The crunch will come over whether – and how far – Labour is prepared to break with the coalition's austerity programme for the next parliament, when cuts are planned to be the most savage. The Tories want to lure Labour into signing up for the same medicine – or a mildly watered down variant – as they did in the far more benign economic environment of 1997.Labour leaders' sensitivity over a rupture with Tory austerity was on display this week when Miliband tried to avoid saying his plans for a VAT cut would initially be paid for by increased borrowing. That was later corrected. But it was a foretaste of the pitfalls around the far more important decision over Labour's cuts and spending plans after 2015. The crunch will come over whether – and how far – Labour is prepared to break with the coalition's austerity programme for the next parliament, when cuts are planned to be the most savage. The Tories want to lure Labour into signing up for the same medicine – or a mildly watered down variant – as they did in the far more benign economic environment of 1997.
If Miliband and Ed Balls (who still defends the 1997 decision to stick to Tory spending limits) fall into that trap, it would be a disaster – both for Labour's election prospects and the chances of rebuilding an economy that delivers for the heavily squeezed majority. Balls recently slapped down a suggestion that Labour would outspend the Tories, saying the decision would be taken nearer the election.If Miliband and Ed Balls (who still defends the 1997 decision to stick to Tory spending limits) fall into that trap, it would be a disaster – both for Labour's election prospects and the chances of rebuilding an economy that delivers for the heavily squeezed majority. Balls recently slapped down a suggestion that Labour would outspend the Tories, saying the decision would be taken nearer the election.
But the principle of whether Labour should tie itself to the coalition's overall spending plan, rather than the detailed figures, clearly shouldn't be left to a handful of the party's leaders in the febrile runup to a general election. If Labour is going to have any chance of driving economic recovery after 2015, it cannot allow itself to be locked into a failed Tory austerity programme.But the principle of whether Labour should tie itself to the coalition's overall spending plan, rather than the detailed figures, clearly shouldn't be left to a handful of the party's leaders in the febrile runup to a general election. If Labour is going to have any chance of driving economic recovery after 2015, it cannot allow itself to be locked into a failed Tory austerity programme.
Miliband is right to argue that there has to be a break with the failed "free market" economic model of the past 30 years. But unless that rhetoric is turned into policies that match the scale of the crisis, both before and after the election, it risks laying the ground for political failure. Pressure needs to be applied now by those who want to see real change.Miliband is right to argue that there has to be a break with the failed "free market" economic model of the past 30 years. But unless that rhetoric is turned into policies that match the scale of the crisis, both before and after the election, it risks laying the ground for political failure. Pressure needs to be applied now by those who want to see real change.
Twitter: @SeumasMilneTwitter: @SeumasMilne
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