New Statesman: Ed Balls’ surrender is a political disaster

with 12 comments

This article originally appeared on the New Statesman’s Staggers blog

I never expected to become a defender of New Labour’s record, let alone against its own most zealous supporters. At this point, I should clarify that I haven’t been kidnapped by Peter Mandelson and transformed into a Blairite drone. What I mean is that among all the disappointments and betrayals of the New Labour era, there were genuine social advances. They are now being shredded at lightning speed by a radical Tory government – but with the increasing complicity of the Labour leadership.

Just after news broke on Friday that Ed Balls had regretfully announced the next Labour Government is ‘going to have to keep all these cuts’ and declared his support for the Government’s public sector pay freeze, I spent my evening debating Tory ex-Minister Edwina Currie on Stephen Nolan’s 5 Live show.

Currie was in full-on triumphalist mode, gloating that Labour had accepted that the Tories were right all along. I couldn’t blame her. Before coming on air, I listened to a spokesperson for the hard-right Taxpayers Alliance similarly praising Balls to the hilt. At the same time, I scrolled through Twitter, wincing as prominent Tories and Liberal Democrats proclaimed victory. ‘You lose,’ tweeted right-wing blogger Harry Cole to Balls’ political advisor Alex Belardinelli.

Tory MP Robert Halfon couldn’t contain his glee, either: he promptly cobbled together a blog post entitled ‘Ed Balls comes out… as a Conservative’, bragging that the Shadow Chancellor had appeared ‘to sign up to Coalition economic policy’. ‘After months of opposition, the Labour Party appear to have conceded defeat,’ he boasted, adding that he thought ‘Coalition Ministers will be able to sleep safer in their beds in future’.

The stifling of Labour’s internal democracy is taken so much for granted that no-one has even bothered to pass comment on the lack of consultation before Ed Balls’ announcement. One leading MP was stunned, telling me that the Parliamentary Labour Party was given no prior warning and would be ‘shellshocked’ when they returned to Westminster. As for trade unions or party members — well, you are well within your rights to chuckle that I’ve even bothered to mention them.

Ed Balls’ surrender is a political disaster. It offers vindication for the Tories’ economic strategy, even as it is proven to fail. Growth has been sucked out of the economy. Consumer confidence has plummeted. Unemployment is soaring, with no sign of the promised ‘private sector-led recovery’. Even on its own terms, the Government’s austerity measures have failed disastrously: George Osborne will borrow more than Alistair Darling’s plan, so derided by the Tories at the last general election. As for the impact the cuts are beginning to have on our communities and those groups being pummelled hardest (women, young people, and the disabled, for instance) – well, that’s simply incalculable.

But rather than trying to push a coherent argument against this disastrous austerity programme, it is now being treated as a fait accompli. Sure, the cuts are now necessary because of George Osborne’s mistakes, but they are nonetheless here to stay. Labour can no longer talk about how these cuts are inherently destructive, because otherwise it would have to commit to reverse them. Neither can it aim fire at their ideological nature, as when Cameron announced they were permanent before the election: that is, after all, now Labour’s starting point too.

And it will surely fuel the sense that the Conservatives are making the necessary tough economic decisions, and Labour are simply playing catch-up. This is a large part of the catastrophe that has befallen Labour since the biggest economic crisis since the 1930s began. The Tories were allowed to transform a crisis of the market into one of public spending because Labour failed to offer a coherent alternative narrative. The role of collapsing tax revenues and rising welfare spending as unemployment rose barely got a mention; the Tories managed to get away with the fact they backed Labour’s spending plans pound for pound until the end of 2008.

When I complained about this suicidal strategy – or, rather, suicidal absence of one – to a shadow minister at Labour Party Conference in September, they responded quick as a flash that we did indeed have a deficit because Labour overspent. I confess that – at this point – I felt that if senior Labour figures were happy to accept dishonest blame handed out by the Tories, then it was hopeless.

This latest surrender to the Tory cuts agenda comes after a protracted struggle at the top of the leadership. One faction argued that, once you started specifying cuts, there would be a loss of focus on their deflationary impact, and that the Tories would come back for more and more detail on Labour’s spending plans. We now know this argument has been decisively defeated.

Arch-Blairite Jim Murphy – who harbours ambitions to stand for leadership should Ed Miliband fail – began rolling out the new strategy earlier in the month by calling for Labour to avoid ‘shallow and temporary’ populism over spending cuts, setting out his own proposed cuts as an example to his colleagues. The equally devout Blairite shadow education secretary Stephen Twigg has partly endorsed Michael Gove’s attacks on the scrapped Building Schools for Future programme, and has outlined £2bn of his own cuts. And Liam Byrne has committed Labour to a renewed attack on the welfare state, currently being hacked to pieces by the Government. I bet the word ‘vindicated’ will be used liberally around the corridors of Conservative Campaign Headquarters next week.

And so former arch-critics of Blair and Brown such as myself are forced to defend large chunks of their record from their acolytes. New Labour’s major departure from Thatcherite orthodoxy was investment in public services. It is now being torched with the approval of Blairites and Brownites. Clement Attlee and Margaret Thatcher headed the two transformative governments of post-war Britain, each establishing a new political consensus by forcing their oppositions to accept the key tenets of their programmes. Cameron looks set to follow in their footsteps, with New Labour an interregnum that temporarily tinkered with the Thatcher consensus, much like the Tory governments of the 1950s and the Attlee consensus.

As the usually thoughtful Tory Peter Oborne put it:

A sea change is at work. In practically every area of British public life – state spending, the economy, education, welfare, the European Union (where Ed Miliband refused to condemn Cameron’s pre-Christmas veto), mass immigration, law and order – Conservatives are winning the argument and taking policy in their direction.

It is not inevitable, of course. It is being allowed to happen because there is a lack of countervailing pressure from below. If a broad coalition of Labour activists and trade unions united around a coherent alternative and put concerted pressure on the leadership, this surrender can be stopped in its tracks. With the Shadow Cabinet set to continue its suicidal course, time is running out – but it is the only hope to stop Cameron transforming Britain forever.

Written by Owen Jones

January 16, 2012 at 7:37 pm

Posted in cuts, economy, Ed Balls, Labour

12 Responses

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  1. Absolutely Owen Jones.
    Seriously – you won’t find me voting labour again. One Balls-up too many for me, & I suspect anybody else who’s a trade unionist, or public sector worker, or a pensioner, or disabled, or … just not as affluent as your average Labour MP (that’s a lot of votes you’ve just lost Ed).

    robb johnson

    January 16, 2012 at 7:56 pm

  2. Complete and utter sellout – and you’re of course right to highlight the lack of internal consultation before committing the party to such a major policy reversal. Buying into Tory policies and rhetoric on the cuts doesn’t make us look ‘responsible’ – it makes us look like we were wrong and the Tories were right, and that’s not how you win elections.

    Shame, really – Ed was starting to produce some good ideas.

    Nate P. Barker (@thenpb)

    January 16, 2012 at 7:58 pm

  3. My heart sank on Friday as I read the news about Balls’ surrender. It is catastrophic. I’m a Liberal Democrat, albeit a disappointed one. Just as I was about to “switch” to Labour, Balls does this, which leaves me thinking. Was my party right after all? Probably not since their the poodle in the Coalition. Like you say, history is repeating itself. As a public sector worker, I’m shocked Labour have done this.

    Time will tell whether I renew my LD subscription next month!

    Mark Ryan-Daly

    January 16, 2012 at 8:47 pm

  4. I feel very disappointed, not to say bewildered. I re-joined The Labour Party (for the third time) just before the leadership election. I wanted to believe ‘we’ had another chance, but there just doesn’t seem to be any socialism left in the Labour party now. I’m shocked that they can’t step up to the plate when the population of the UK are so under attack from the Tories with their pathetic help-mates the Lib Dems. I’m considering withdrawing my support again and as I’ve just moved to Germany (with a view to staying) I’m starting to wonder about learning more about the left here. Do you have any recommendations Owen? How do Die Linke rate as socialists compared to Labour?

    Carol McGuigan

    January 16, 2012 at 9:03 pm

  5. As an LRC member, a Unite member and a 40 year plus Labour party member what can I add Owen, except that I am also struggling to know what to say to those rubbing their hands with glee at what Balls said last week. Usually I can ‘PollyAnna’ most things and have managed to stay in the party all these years by thinking that there are some good people left who will fight their corner with me. Now it is getting harder to remain in the party. My constituency and local Labour party is full of good friends who I have known for many years and mostly feel like me, I would feel awful to leave them behind if I left. My parents and grandparents fought many elections, marched on many rallies and demos under Labour banners and saw the lot of the working man and woman improve in their lifetime. Their children and grandchildren received the university education of which they could only dream. Medical care at the point of need became a reality and not just an aspiration. I could say much more.
    However I have always said that the Unions have had the interests of the working class [and increasingly the non-working class due to the terrible unemployment figures - which in real terms are far higher than the published statistics] more in their sights than any political party. The unions after all ‘set up’ the Labour Party through the original Labour Representation Committee all those years ago. Trade Union power has been eroded by successive governments since the 1960s – perhaps this is where we should concentrate our efforts and give all our support – and hope.


    January 17, 2012 at 12:32 pm

  6. When is the LAbour government whom I support going to grow some BAlls – its as if they are waiting to see – then again maybe that’s the wisest thing to do – as U.K PLC become a fallback of the VICTORIAN ERA I’m not joking —- wake up little Britain please ——– dear god – this is the most cruellest of time and considering nearly every member of the cabinet attended private school , funded yes by mama and papa – THEY DON’T GIVE A JOT ABOUT YOU OR ME, WHETHER SICK, WELL, DEAD OR ALIVE…….BAD THINGS ARE HAPPENING……..TO YOUR YOUNG, OUR OLD,, OUR DISABLED AND SICK…….ONE THING AND ONE THING ONLY WILL SAVE YOU AND THAT IS MONEY LOTS OF WONGA , MONEY , OR DEATH….COS WE WILL FREEZE TO DEATH OR WORSE………WE DEFEAT HITLER, WE FOUGHT FOR THE RIGHTS OF SO MANY VUNRABLE HUMANS …..PLEASE OPEN YOUR EYES………..THANKYOU


    January 17, 2012 at 1:06 pm

  7. `Coherent alternative` there’s the rub. Sarkozy did not lie when he pointed to the UK’s vast debts – bank
    holdings at 316% of GDP the highest in the world (Eurozone 168%, US 88%). The UK economy underwrites & his hostage to this debt along with `The City’s` role as offshore treasure island to global (mainly US Finance Capital) – a status underwritten by the Single European Act . Any serious move against these interests to redirect the economy toward manufacturing & useful services would precipitate financial contagion and an exit from the EU. Osborne’s policies are not a `mistake` they are dictated by this reality – the consequences of 30yrs of neo-liberalism and its collapse.
    While the Labour leadership have either run & hid or capitulated, a coherent alternative begins by facing this reality, breaking the power of our tiny ruling sleazelite by bringing banking & finance & the corporate monopolies into some form of public ownership/control, and genuinely rebalances the economy in favour of working people & their natural allies the small to medium companies.

    dave hawkins

    January 17, 2012 at 2:26 pm

  8. This is a very foolish move, and worrisome as many ordinary people were hoping Labour under Miliband would defend their interests, instead of big businesses. If Ed Miliband believes this will get the Blairites off his back then he is an fool. The only way this will occur is if he sacks the lot of them.

    I just heard David Lammy badmouthing him on Radio 5, dreadful, normally cautious his disloyalty shows he has become emboldened by this nonsense. If you look at the recent bad coverage which Miliband has received, almost all of it came first from within the Blairite camp.

    They are a small group of people who have no strong base in the labour party or country, they represent no one but themselves and the multi nationals who bank roll their master.

    If he sacked the lot of them in a night of the long knifes, making clear for them there is no way back, there would be a brief brouhaha in the media and then most would desert to big business of the Tories. In time Ed would be seen as his own man who had no alternative but to act. Brown refused to do this and paid the price, if Miliband also refuses to act against this reactionary trash he will be history.

    He owes them nowt but a Hefty kick up the arse to see them out the door, they really are a reprehensible bunch when you think back, and remember how much they use to go on about loyalty to the party leader.

    Mick Hall

    January 17, 2012 at 4:01 pm

  9. I guess I shouldn’t be surprised by Labour’s cravenness and capitulation but even so this is astonishly pathetic by even their standards. Also surprised that this story hasn’t run more strongly in the media, but I guess discretion is the better part of valour, with right-wingers cock-a-hoo at how easy Labour’s Plan B has been shafted, with Labour as a distinct political force all but merged with the Tories. Harman running around telling everyone that they don’t appreciate the ‘nuance’??!!

    The only worry now is that this will be rendered as a ‘trade union’ story rather than the Blairite policy coup that this in fact is. Not a big fan of trade unions as they are largely complicit in this kind of ‘new realist’ crap anyway with their union bureaucracies, but pleased that Len McCluskey has found the muster to start some kind of fight back. It really does become incumbent on Unions to disaffliate starting right now, but Unison are keeping mum as usual.


    January 17, 2012 at 8:08 pm

  10. It’s rich beyond belief to hear Alan Johnson say that Len McCluskey reminds him of the ‘culture of betrayal’, at the very moment when Eds Milliband and Balls exemplify the perpetual betrayal of Labour leaders of those who look to them for representation. A projection of Freudian guilt, perhaps? Now that Labour fully accept the Tory cuts agenda, who is going to provide an opposition?

    Among all the betrayals of the past, from Denis Healey’s abject cap-in-hand trip to the IMF with the begging bowl and a pledge to slash public services, to Blair’s warmongering on behalf of the world’s thieving elite, the greatest betrayal of recent times is Labour’s acceptance of the Thatcher/Reagan deregulatory agenda that unleashed what little restraint there already was on the greed of the offshore hot-money merchants, encouraging them to finally blow apart their own corrupt, self-serving finance system. Followed, of course, by Labour’s betrayal of shovelling more billions at the same people under threat of their ramping the cost of sovereign debt to impossible levels, when they should have been rushing to form an international alliance to fix these people once and for all, starting by shutting down the offshore havens that allow them to pay no tax whatsoever on profits (the tax lost annually to the public purse in Jersey alone is more than the NHS budget). Labour is plainly unreformable; the least the Unions should do now is disaffiliate, and stop giving the betrayers their members’ money. The time has surely come for a new party to properly represent the 90%. Until then, I’m sending back the card and taking out a subscription to the Greens.

    Alan McMahon

    January 18, 2012 at 11:49 am

  11. [...] already read since the weekend, and though I share the same disbelief and anger as Len McCluskey, Owen Jones and scores of other people who have made their feelings known these past few days, I’d like to [...]

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