Labour should be taking credit for the coalition’s economic policy, not whingeing about it

“Too far, too fast.” Remember that criticism of the British coalition government’s economic policies? It was repeated incessantly by Labour politicians in the first years of the government. And, it appears, the government was listening. The actual trajectory of progress on the country’s massive fiscal deficit is close to what Labour were recommending. And economic growth has returned. So what are Labour saying now? They are vilifying the government for going not going far enough and doing it too slowly!

It is, in fact, quite hard to understand Labour’s political strategy on the economy right now. The party lacks credibility, according to opinion polls. It is natural for them to try and change the subject, to more comfortable topics like public services, but foolish to think that they can avoid talking about it. Following yesterday’s Autumn Statement by George Osborne, the Chancellor of the Exchequer, the biggest noise from the party was about the coalition’s broken promises. And indeed, back in 2010 the coalition’s plan was to eliminate the structural deficit by 2015; instead, it seems to be generally agreed, they will only be half way there. Progress is, in fact, more or less what was envisaged by Labour’s alternative plan. This sounds like criticising the government for following Labour policy.

It’s not a first. Labour were equally scathing about the government’s record on immigration, after its pledge to reduce net immigration to under 100,000 was spectacularly missed. And yet Labour was not advocating any policies that would have made this promise more achievable. Indeed it is not at all clear whether Labour would have done much different.

And there is a ready explanation for why both the government’s promises were not met. World events. Economic growth in the rest of the world, and especially elsewhere in Europe, has been below expectations. You can get only so far by rowing against the tide – and if you do on the economy, net migration goes against you. Of course neither promise should have been made (if indeed the deficit reduction plan can even be called a promise). They were dependent on matters outside the government’s control. This is obvious, and it is to grossly underestimate public intelligence to suggest that the anybody thought that the numbers were written in stone. What matters to the public is what the government should have been doing differently. And here there is no clear message coming from Labour benches.

What we get instead is a flood of expressions of discontent. Pay has not kept up with inflation (“the cost of living crisis”); the rich have been let off; we don’t like the public service and benefit cuts.  It’s all like the children’s complaint “it’s not fair!”. And the weary response of the public to this complaining is surely that of the child’s parent. It’s a difficult world. Could you manage any better?

What is the purpose of Labour’s relentless negativity? It is a poor way to attract votes to itself. Perhaps they just want to reduce turnout, or encourage Conservative voters to support Ukip? Perhaps they plan to flourish Labour’s vision of hope a bit closer to next year’s election? But the last time Labour won from opposition, in 1997, the message of optimism was clearly apparent by this stage. Labour seems to have an ambition to win a majority in Parliament with the smallest ever number of votes, by splitting opposition votes and persuading people to stay at home. What sort of a vision is that?

But I don’t Labour’s negative and confusing rhetoric is part of a cunning plan. It is a reflection of confusion that goes deep into Labour thinking, especially about the economy. The party has not admitted that it made major mistakes in handling the economy in the years up to 2007, at which point the economy collapsed. They mumble something about being a bit to easy on bankers. They also say that they should have been tougher on immigration, though exactly how, and whether this would have helped the British economy, is very unclear. Instead, in private, they complain that the criticism of their record is unfair, and that the public is wrong to blame them. It was the world banking crisis that did for them; and the government was not as profligate as it is made out.

There is an element of truth to these complaints. Few criticised the government’s record at the time, after all. But the party has to confront some difficult facts. First is that the party was clearly guilty of hubris before 2007. There most memorable slogan was “no more boom and bust”, which they shouted out at the height of a boom, and just before one of the most spectacular busts in British economic history. Shrugging it off and saying it was somebody else’s fault does not pass muster. And second is that the level of government services and benefits that prevailed at 2007 was unsustainable. It may have looked OK according to the size of the economy at the time (though that is debatable), but a lot of that economy was built on air.

What Labour needed to say back on 2010 and 2011, after having chosen their new leader, Ed Miliband, was that Labour had messed things up badly. They were honest mistakes, made from the best of intentions, and following the best advice, perhaps. But they were mistakes and the party must learn from them. But instead Mr Miliband fudged the issue, preferring not to provoke a big argument in his own ranks. At the time he wished to ride a wave of anger at austerity, and it was necessary to leave unchallenged the fiction that public service cuts were unnecessary.

It is too late for that confession now. But it can be no wonder than the party’s credibility on the economy is so weak. As one columnist said in this morning’s FT, you can think that the coalition economic policy is disappointing, a mess even, and still think that Labour would be even worse.

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