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Moving to an election is like parachuting. Descent is slow and serene at first. Then suddenly the ground whizzes upwards at breakneck speed. Now after three several years of looking and feeling impregnable, May 3rd is whizzing towards us. Its impact won’t be as traumatic as my own painful parachuting. We’ll land safely. Yet it’s only then that the traumas begin because to govern successfully we then must jettison the New Labour identity assumed to win in 2001 and tackle Labour’s real job. Which we’ve postponed so far..
Since 1997 everything has been subordinated to winning a second term, though it was never going to be difficult now the first impulse of oppositions is to make themselves perfect, and hence sectarian, while electorates are ever ready to give the benefit of the doubt to a new government. Particularly one which has gone out of its way not to frighten.
We never realised this and opted for re-assurance-overkill by tying our hands against everything we needed to do, espousing Tory policies rather than reversing them, avoiding hard decisions, keeping the troops busy on an agenda more pleasing to Polly Toynbee than our own voters, and generally not being Labour. It’s worked. As it was always certain to. Sadly, elections are about more than putting our bums in ministerial Jags because the second term brings us up against the problem we’ve postponed in the first. We were carried to power in 1997 on an overwhelming desire for change. We’ve neither delivered on it nor given our people, at the bottom of the heap, what they voted for.
We can’t carry on like this for another four years because our voters and heartlands need positive gains to enthuse them. The Minimum Wage, the extra spending smuggled through to women and children, and the concessions forced from us on pensions will keep enough of them with us in 2001, helped by lambasting of Tory bogeymen. Yet long term we have to do far more. The old problem with the Labour vote is that it’s difficult to deliver to the many, what the Tories can easily do for the few. Being less dutiful and motivated our voters are easier to disappoint, more difficult to enthuse, and if we don’t deliver we lose, as in 1970 and 1979, because our people don’t turn out. Not a problem in 2001 given our huge majority but one which will be severe by 2005-6 when we need them for the long haul. To deliver real improvement New Labour must be buried as deep as Old Labour’s conspiracy of producers and public service. It’s served its purpose, but we now face the job of Real Labour.
Labour has four basic responsibilities. More public spending is crucial and after three years of anorexia our big boost is prospective rather than real. The two year enforcement of totals the Tories would not have met, compounded the long term deterioration of the public sector. Taking the seven years from third quarter 1993 to the same in 2000 GDP rose 23% but central government contribution to local government as a ratio to this fell by 24% and national government spending by 11%. Here is basic cause of Britain’s private affluence-public squalor disaster.
Labour is about redistribution to improve the lot of that great majority for whom existence is a struggle. A little has been done but surreptitiously much of it by means testing and then undermined by increases in indirect taxes, particularly on petrol, which the commitment not to increase income tax rates required.
Labour must also advance democracy and freedom which we’ve done, though you can never do enough to satisfy the chattering classes. Nor will the devolved governments be satisfied. So we’ve created a long muttering conflict and the benefits of any of it to our core supporters are imperceptible.
Our most important ask of all is to boost growth: to raise all boats, generate the surplus for public spending, make redistribution less painful, better the lot of our people and deliver all the other benefits Tony Crosland described. Here our record has been better than the Seventies, worse than the Sixties, but earned by sustaining the Tory recovery. Growth has been pathetic compared to the need. Now even that’s petering out
Growth is crucial for Labour as for Britain. In the past we’ve failed to get it because of the huge and unbalanced power of Britain’s financial interest which prefers dear money and a high exchange rate to serve their interests. Interest and exchange rates have been traditionally higher here yet amazingly our first step in 1997 was to put the embodiment of Dear money, the Bank of England, in charge of interest rates, advised by a Monetary Policy Committee which we then loaded with monetarists.
The inevitable result has been interest rates higher than Europe’s, real interest rates, high by historic standards, and a Pound grossly overvalued. All have depressed the economy and made it unprofitable to produce here. The consequences have not been as severe as these policies were under the Tories. Firms keep going until they run out of cash to keep market share but eventually policies which encourage imports and the transfer of production overseas, and penalise exports, growth and production in this country, must be disastrous and now the chickens are coming home to roost. Half a million jobs have gone in the agony of textiles, cars, engineering and farming, too; a wind-down which can only get worse. The stability we want is not, presumably, that available in graveyards but that’s what we’ll get if this goes on.
Which won’t lose the 2001 election. Doubts about the Tories and selling ourselves on the "You know Labour Government Works" platform Harold Wilson used so successfully in 1966 will win that. Yet governing with the brakes on isn’t a formula for long-term success and can’t deliver the improvement our people voted us in for. 2001-5 is delivery time which means fast economic growth at levels othes are allowed but never us. Yet not only can we not deliver on those policies but we’ll struggle to finance the spending improvements already proposed.
Growth policies include macro economic management of the type the Chancellor prefers to avoid, lower interest rates and a much lower exchange rate. Taking back control is unlikely and no-one will acknowledge the new reality, that inflation is a dead enemy. So why not give the Bank a wider responsibility for the economy (like the Fed’s) and change its targets to add in growth, full employment and a competitive exchange rate and end one club golfing?
So this election needs to be a request for a new mandate for a different party. We’ve shown that Labour government works. We’ve stopped the rot. Now give us the mandate and the tools to finish the job of making Britain richer and fairer - two things that go together. That means an economy capable of competing in the world to take us back to full employment and generate the growth and the higher levels of public spending others have enjoyed for decades. I’ll even offer a slogan. Let’s Grow with Labour. |
