ElectionSOS: Scrap Osborne Spending cuts

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.

Polly Toynbee says acceptance or rejection of Osborne’s spending envelope will ‘define Labour’, writing,

‘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.’

Peter Hain MP, in The Guardian, wrote on the need to reject Osborne’s spending cuts trap,

‘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

Across Europe, the left advances against austerity

The neo-liberals austerity agenda is finally coming under some scrutiny as polling across Europe has seen the pendulum swing back to the left. Elections in Greece, France, and Germany and opinion polling elsewhere have shown left advances – though not uniformly for the ‘official’ parties of social democracy. Some of them have benefited by attacking spending cuts, whilst elsewhere it has been parties to their left who have won increased support.

But public opinion everywhere is hostile to the impact of spending cuts on people’s livelihoods and that anger is being directed at incumbent governments. Candidates who have most strongly condemned austerity have benefited most.

In Greece, this has meant Labour’s governing sister party PASOK, responsible for implementing the so-called Memorandum from the troika of the EU, the European Central Bank and the IMF, has reaped the rewards of savage cuts ripping apart the country’s social fabric. With measures including public sector workers facing 50% wage cuts and food queues becoming a regular sight, voters exacted revenge by cutting the two main parties down to size. Where PASOK and the conservative New Democracy regularly receive 80% of the vote between them, that was slashed to just 32% in the Parliamentary election last week. Some of the right-wing vote has gone to the openly fascist Golden Dawn, but it is parties to the left who have benefited most, Coalition of the Radical Left (Syriza) on 16.8%, the Communists (KKE) on 8.5% and the Democratic Left (Dimar) on 6.1%.

Syriza, under the astute leadership of Alexis Tsipras, has since emerged as the most credible political force. It has been prepared to negotiate with all parties (other than the fascists) to seek a coalition government, but has resolutely stuck to the terms of its five points, notably including ‘cancellation of all impending measures that will impoverish Greeks further’ – requiring a renegotiation of the bailout. As a result, Syriza has been the largest party in two polls carried out since the election, with one putting them on 27.7%.

But elsewhere, the message is the same. Hollande won the French presidential election making a ferocious assault on austerity, declaring, ‘Our real adversary has no name, no face, no party, it will never be a candidate, even though it governs… it’s the world of finance’, at his campaign launch and pledging to renegotiate the EU fiscal treaty to focus on growth rather than austerity. Throughout the campaign, he faced pressure from the left by the insurgent Front de Gauche, combining the Communist Party and the Left Party – a split from the Socialist Party led by the charismatic Jean-Luc Melenchon. In the first round, Melenchon polled 11.1%.

In Germany, the Social Democrats have advanced in both Schleswig-Holstein and the far more significant North-Rhine Westphalia. In the most recent election, the SDP came from behind to take 39% to the CDU’s 26%. In Holland, it is the Socialist Party, to the left of the Labour Party, which opinion polls now predict could actually be the largest party in the next parliament.

What does this mean for Labour here in Britain?

We clearly won the recent elections. 38% nationwide is a decent recovery from the depths we plumbed at the end of the Blair era and under Gordon Brown. But in France voter turnout was 80%, in Greece 65% and North-Rhine Westphalia 60%. Francois Hollande and Jean-Luc Melenchon addressed crowds of up to 100,000 on occasions. Here in the UK turnout was 32% and there is no chance of a political rally on anything like the same scale as was seen in the French Presidential election.

While the Coalition parties are becoming more unpopular, and a section of voters defaulting back to Labour in hard times, there is still little enthusiasm for politics. Whilst we turned out enough voters to win the day on a low turnout, we can’t be sure that will translate into winning back the lost millions to wina general election.

Miliband has yet to deliver a message to energise the left and revitalise the political scene in the way Tsipras and both Hollande and Melenchon have. He is doing a steady job, but the evidence is a stronger attack on Tory austerity and a positive economic alternative for growth, with a more ambitious and radical version of the five point plan, would reap greater rewards.