Ed Miliband can regain ground if he looks to the long term and starts talking about poverty and the housing crisis
Economic recovery makes politics more interesting. All the time growth was flatlining, Labour needed to do little more than bang on about George Osborne's austerity programme and point out that Britain was in a worse state than when Gordon Brown ceased to be prime minister in 2010.
But over the last four months the mood has changed. There are the stirrings of recovery. House prices are rising and so is consumer confidence. Factory output is up. Exporters can take heart from the slightly better news from the eurozone. All this highlights difficulties for Ed Miliband that have always been there but have been disguised while the economic news was so poor. Now they are out in the open and, with an election less than two years away, have to be addressed quickly.
Problem number one is that Labour never managed to rid itself of the stigma of bankrupting the country during the financial crisis. The government successfully developed a narrative that linked alleged fiscal incontinence by Labour to the biggest recession and the largest budget deficit in Britain's history.
This story does not really stack up. When the financial crisis began, the UK was running a budget deficit of 2.5% of GDP. The national debt was 35% of GDP, smaller than in the US, and half the level in Germany and France. After 16 years of uninterrupted growth, it could rightly be argued that the public finances should have been in an even healthier state but the claim that the crisis began in the public sector is fatuous.
The crisis had its origins in the US sub-prime mortgage market and spread around the world through the agency of networked financial markets. Britain suffered more than most because the economy is heavily dependent on financial services, and the financial sector was inadequately regulated.
Labour has to hold its hands up and admit that it was responsible for the tripartite system of regulation. But the dominance of finance began long before the arrival of Tony Blair in Downing Street in 1997; it dates back to the de-industrialisation and the Big Bang reforms of the City in the 1980s.
This more nuanced narrative has, however, been drowned out. Osborne has been remarkably successful in spreading a much simpler message: Labour left the cupboard bare after 13 years of wanton profligacy. In every other country, with the exception perhaps of Greece, it is taken as read that the chronology of the crisis was banking collapse, economic collapse, huge increase in the budget deficit. Not in Britain, though.
Labour's second problem stems from the first. Unable to shake off blame for the crisis, it is finding it hard to get a hearing. The conversation going on in British politics this summer has been conducted by two parties of the right: the Conservatives and Ukip. It involves three issues – welfare, immigration and Europe – in which David Cameron and Nigel Farage try to outbid each other with shows of machismo.
If the political battle remains on this turf, Labour will struggle. Few voters are going to believe Miliband will, say, be tougher on welfare than Cameron. Labour needs the debate over the next 18 months to be about the NHS, care for the elderly, the shortage of housing, falling living standards, the shortage of skills and rising child poverty. Areas, in other words, where it feels more comfortable.
And with his poll ratings slipping, Miliband's third problem is that changing the nature of the discourse is likely to get more difficult as the economy continues to recover. True, the recovery is thus far modest. True, the level of national output will remain below its pre-recession levels for some time. True, wages are failing to keep pace with prices. True, the country appears to be in the early stages of a housing bubble even though on some measures of affordability – such as the house price to earnings ratio – residential property is already 25% more expensive than its long-term average.
But while Osborne is doing a passable impersonation of Reggie Maudling circa 1963-4, stoking up a pre-election boom, that's probably not the way it will look over the coming months. It will take time for the dangerous side-effects of ramping up housing demand to become apparent. The formal Treasury message is of the economy moving from recession to recovery: the unofficial message will be that the government is finally sorting out the mess left by Labour.
What should Miliband do to counteract these difficulties? Well, for a start, he needs to recognise that he has some things going for him. It is not true that the entire electorate spends its time railing at welfare scroungers, bemoaning the number of immigrants and frothing at the mouth about Europe.
Voters have other concerns: whether the NHS is fit for purpose; whether they are going to be penurious in old age; whether their children are going to be able to buy a home of their own. Even in areas such as immigration, there is space for a more intelligent debate in which the question is not 'why are there so more workers from overseas in sandwich bars and restaurants?' Rather, it is 'what has gone so badly wrong with education and training policy that British-born workers are regularly shunned by employers?'
Miliband's other advantage is the relentlessly short-termist nature of the government's programme. The decision to provide mortgage subsidies is the most obvious manifestation of this, but on big issue after big issue the coalition has kicked a decision into the future: on airport capacity in the south-east, on renewable energy, on elderly care.
Cameron has provided no clue as to the sort of country he expects Britain to be in 10 or 20 years from now. Accordingly, there is a prize for the party that has the answers to the big questions that will have to be tackled over the next decade: from energy policy to coping with the costs of an ageing population.
Labour says that work on this sort of long-term agenda is under way, and that the talk of a squeezed middle and a one-nation Britain are part of an attempts to rethink itself in opposition. But parties have to earn the right to be listened to. Before Labour can claim to represent the future it has to put the past to bed and interrupt the Cameron-Farage conversation.
That means defending what it got right more vigorously than it has done, admitting what it got wrong with less reluctance and coming up with some proposals for tackling Britain's chronic problems – poverty, under-investment, falling living standards among them – that don't look cramped and defensive.
It should start with a manifesto for the young: tackling the housing crisis through building rather than mortgage subsidies and youth unemployment through national insurance cuts for employers that take on the under-25s and a 10-year programme to boost skills.
Ed MilibandGeorge OsborneNigel FarageDavid CameronEconomic growth (GDP)EconomicsEconomic policyLarry Elliotttheguardian.com © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds |
| READ THE ORIGINAL POST AT www.theguardian.com |
