As The Labour Party enters yet another leadership contest after yet another defeat, a few observations on why the campaign ended so badly.
In my view the defeat was worse than any election since 1983, in that the incumbents were driven by cruel ideological instincts aimed at the poor and the weak, and if that were not enough, defended a poor economic policy predicated on low skill, low pay jobs, low investment, and the consequent appalling productivity record. They were also deeply hated and despised. But still Labour could not win.
I would prefer at this stage that Labour put the leadership contest on the back-burner and sat down and carefully thought out what it stands for, what it’s vision or framework should be, basically just honestly ask ‘what are we for’.
Otherwise the Party risks being seen as a vehicle for careerists and dynasties (Labour far, far worse than Conservatives on this).
The missing defence
Events in 2008 were tumultuous and on a scale with a major war in terms of economic disruption. The banking crisis originated in the sub-prime loan scandal in the USA and ramifications in the UK happened on Labour’s watch.
That it was not Labours fault is obvious. It did present an opportunity to the Conservatives which they took; they constructed the lie, packaged the lie, and sold the lie that Labour crashed the economy. What actually happened was a sharp decrease in tax receipts resulting from sharp economic slowdown, a recession. It could not be forecast or anticipated and blame should not be put on Labour’s solid investment in public services in the years that led up to it.
Labour are guilty of mismanagement of the defence of their record, and creating one of the biggest open goals in recent political history. The Conservatives scored.
[The sub-prime debacle started in the USA; cheap home loans, on the back of Greenspan’s cheap money policy, given to people who would never pay them back. Someone had the bright idea of slicing and dicing these loans and packaging them with good loans to ‘spread the risk. It was a dumb idea; people will not take a cookie from the cookie jar even if the chance of picking a cookie with a bit of cyanide was greater than even one million to one. The consequence, as collateral these loan packages were treated as junk and the banking system seized up.]
The missing vision or edge
The overriding reason for the election result is that the Conservatives had an edge or vision. The fact that much of it was predicated on self-interest and fear does not make it any less of a vision or edge.
Labour offered no defining vision, nothing that concentrated the mind, just a medley of disconnected policies tied together with meaningless slogans.
Nothing big on the economy, unless I missed it, a state investment bank, a revamped higher education more fit for purpose in the modern world. No grasp of the need to channel money away from property into more productive assets.
There was little on constitutional reform; especially voting reform.
There was nothing on social mobility.
There was little on a vision for the EU, a recognition that the UK needs to be part of a major block to counter other major blocks. Miliband made just one speech on the EU, prompted by Blair’s intervention; too little late.
[I predicted the election result as early as October last year. No fancy theory, just a gut instinct that the voter would stick with what they knew, in the absence of a tangible alternative from Labour. Factor in natural conservatism and aversion to risk of the UK voter, and I was convinced. In addition no party has ever won a modern election in the UK whilst being behind on perception of economic competence and perception of leader competence. I get the cigar.]
The stone tablet epitomised the campaign more than anything; my first reaction, ‘they have given up’; my second reaction, the same as my first reaction.
The timid policies
Both utilities, in particular energy, and rail, cry out for public ownership and would have been popular policies.
Instead mindful of its image in the City, Labour opted for watered down, and in the case of the energy freeze, unworkable policy.
The old knee jerk staples
Both mansion tax and 50% top rate income tax were very poor ideas, gesture policies in that they appealed to old Labour and would have failed to provide much yield.
High income tax in a globalised economy will just not work; easy to avoid, poor yields and anti-wealth creation.
Mansion tax was just bizarre. Only affecting London and the South East, largely hitting retired or near retired people occupying modest homes that just happen to be in expensive areas. The alternative choices were rich and varied; a land tax, more frequent re-banding of council tax, or my particular favourite, applying capital gains tax to disposal of main residence.
That shameful policy
Pledge 4 and the tasteless mug episode made me ashamed to be a member of the Party and guaranteed my non-involvement as a volunteer.
It was a panic measure, it was unnecessary, it was embarrasing
The lack of a sense of proportion
The fixation on zero hour contracts; less than 3% of workers on zero hours and apparently over a third of those quite happy with their lot.
The future for Labour
As blogged recently, the Party has no future without re-invention, which should also include a name change. A name that conveys an opposite tone to the Conservative Party, something like The Progressive Party (not to be confused with the Progress block within Labour).
The Conservative claim to be the party of the working classes is a valid one and not new. Conservatives have always garnered about 40% of traditional working class vote, rallying around King and Country, and traditional values, not to mention contempt for do-gooders like the Temperance Society before WW1 and dislike of Johnny Foreigner.
The Labour Party needs to expose one enduring myth about the Conservatives, that they represent enterprise and economic competence; they don’t.
The Conservative Party is the party of the status quo, elitism and privilege, a party that looks after its ‘mates’; that they do a passable job of looking after the aspirations of the working class and middle class is not to be sneered at, but at what cost, greater inequality, an unbalanced economy, an obsession with gambling on property and other financial assets, and a crueller less kind Britain.
The big challenges faced in the coming decade include
- Housing; building a lot more to catch up on previous decades together with redefining the home as a home, not an investment, and establishing a balanced choice between owning and renting (we need both)
- Encouraging the right kind of enterprise; the Apples and Googles of the world, not buy to let landlords
- Positively contributing to the EU project including one day joining both Schengen and the Euro, both flawed but hugely successful projects in the round.
- Massively increasing social mobility and curbing privilege and elitism.
That should be Labours vision; low income tax (top rate no higher than 35%), low corporation tax, abolition of private education, use of very high inheritance tax and capital gains tax to make each generation start over on an equal footing.
A vision that would out flank the Conservatives and make Labour very electable.
A privately educated elite (7% of total) already get all the best jobs, a similar process is happening in housing with offspring of home owners far more likely to become home owners themselves.
It does not work. The cadre of privately educated in the UK are left flailing in the wake of the state educated German equivalent, for example; the latter is able to draw on a bigger pool, in the UK the bigger pool is marginalised.
That is the challenge for Labour.