By all current polls, Labour is set to win the next election. The Tories are divided, its weak coalition of support from 2010 is breaking up, and some Tory strategists have accepted that it will be very difficult to build an electoral majority with present trends, as Jon Trickett wrote last year. Labour must not coast to victory suggesting it will challenge a conservative austerity agenda and then, once in power, continue to deliver it.
The situation it needs to address is one of unprecedented attacks on the poorest in society, which George Osborne wishes to impose on an incoming government in 2015. With Labour yet to outline an economic narrative that rejects spending cuts, Osborne knows he has some chance Labour will continue them if it can win in 2015.
But surely then Labour, as with sister parties in France, Greece and Ireland, will rapidly – and rightly – lose support. It is welcome that the movement against austerity is growing, with protests against the bedroom tax coming on top of recent hospital protests.
The alternative is that Labour must not only challenge Osborne’s austerity agenda in opposition in order to win, it must do so in government as well. It must inspire and deliver for those who are being marginalised. Labour must be ready with an economic alternative that delivers growth and cuts poverty.
And there are increasing signs that Labour thinkers are getting to grips with this.
‘Ahead lies the one decision that will define Labour: despite attacking most cuts, will the party bind itself to the government’s iron fiscal envelope, with a bit of fairer sharing within it? If it means to strike out more boldly, the time is growing short for winning the difficult case for borrowing enough to kickstart the economy.’
‘Some, sadly including anonymous Labour frontbenchers, suggest that the only way for Labour to win back the economic trust lost in the global banking crisis is to sign up to the Tory-Lib Dem post-2015 election spending plans due to be announced in the budget. In fact the reverse is true. More cuts and austerity will continue Britain’s economic inertia and destroy Labour’s claims to offer a serious alternative to the scorched-earth economics being pursued in Britain and across Europe. The coalition has managed to turn Labour’s road to recovery into the road to ruin – a dismal, reactionary consequence of failed policies that Labour must not think of emulating, even for a few post-2015 years. To do so would destroy trust, not earn it.’
He also made the case for public sector investment as the way to reduce the deficit. While John Healey MP too, on LabourList, backed the idea of borrowing to invest for growth, saying,
‘Investment in more homes or infrastructure requires more capital spending and – yes – more borrowing, including by government. Borrowing is good, if it’s for investment to improve longer-term productive capacity as well as create jobs, generate tax revenue and revive growth in the short term. Interest rates on public debt are historically low, so now is just the right time for government – national and local – to borrow to invest. More borrowing by government is now the right thing to do, not the wrong thing; part of the solution not the problem.’
We must now campaign to marginalise the idea that Labour would deliver the coalition’s spending plans in 2015.In January, David Miliband told the Commons, ‘I am happy to debate priorities within that envelope. I will take the envelope that they have set’.
Labour must reject such thinking. To debate spending options without challenging Osborne’s austerity masterplan is like rearranging deckchairs on the Titanic.
The lessons for Labour from elections across Europe are clear. The party must reject Osborne’s spending plans while in opposition and in planning for government, and make preparation for a major investment programme once in power to ensure to put an end to the economic slump.
We have already seen the obliteration of Greece’s traditional socialist party PASOK after imposing poverty on its own supporters. They polled 12.2% in the general election of June 2012, only three years after polling 43.2% to win in October 2009.
In France, we are witnessing the declining support for socialists, as they impose spending cuts, elected as Andrew Rawnsley writes, ‘without a plan’. In a by-election last week, Hollande’s party fell from 2nd to 3rd and dropped from 30% to 21% on first round votes – behind the Front Nationale. And in a parliamentary by-election in Ireland last week, the governing Labour Party fell from 1st to 5th place and from 21% to 4% of the vote as reward for propping up a cuts government.
In the UK, Labour must consider these developments.
We should identify and campaign for three steps; Labour must be prepared to campaign to win with a commitment to
- reject Osborne’s ‘spending envelope’ and the cuts they impose,
- begin reversing unpopular cuts and
- launch an investment programme for growth