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New Statesman: Ed Balls’ surrender is a political disaster

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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

Alan Johnson’s departure is a step forward for Labour

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Alan Johnson was put in charge of Labour’s economic strategy for two reasons. The first was for fairly gimmicky purposes. It was taken as read by the media that Ed Miliband would appoint Ed Balls or – on an outside chance – Yvette Cooper. By not doing so, he won plaudits from  right-media commentators as a leader with the capacity to ‘surprise’.

But the second reason was more important: it was to placate the still-powerful Blairite faction within the Labour Party who were incandescent that their man, David Miliband, had his supposedly rightful place on the throne usurped by his cocky younger brother. Ed Miliband had won the leadership race fair-and-square by a healthy margin of votes, but the Blairites believed that his election was illegitimate because he owed his victory to trade union members. Blairites have even hinted that the Party should dispose of the section of the electoral college that is most representative of Labour’s base and – for that matter – the public at large.

Alan Johnson was not appointed for the good of Labour’s economic strategy. He was a sop.

His defenders argued he had a likeable, chatty demeanour that went down well with the electorate. The fact he hails from a working-class background certainly contrasts sharply with the middle-class closed shop that the Westminster Bubble has become. But, to begin with, he was clearly out of his depth, particularly up against the extremely capable Tories and Lib Dems who are proving more than competent at shredding the Welfare State, bit by bit.

The key issue wasn’t competence for me, however. The Blairite faction have been pushing for Labour to accept the Tory cuts agenda, but to just quibble on details and timing. Their  political godfather, Tony Blair, effectively endorsed the Government’s economic strategy in its entirety in his memoirs. Under Johnson, the Labour leadership has effectively accepted the Tories’ underlying logic, but with the added caveat that it is being pushed too far and too quickly.

Johnson has also acted as a figurehead within Labour’s higher ranks for Blairite dissent. Displaying the Blairites’ contempt at Ed Miliband’s election, he refused to endorse his Leader’s graduate tax position (certainly not a policy I support, but Johnson wanted to stick with the top-up fees introduced under his watch – fatally undermining any Labour opposition to the Tories’ trebling of those fees). He argued for Labour to drop the 50p tax band imposed on the top 2% of the population, one of the most popular policies the last Government introduced.

Perhaps most outrageously, Alan Johnson called for Labour to water down its trade union link. Here was a man who owed his entire political career to the trade union movement: he rose from shop steward to leader of the Communication Workers Union, the launchpad for his political career. If ever there was an example of ‘kicking the ladder from beneath you’, here it was.

Labour’s hard right is in retreat: the likes of John Hutton and Alan Milburn have thrown the towel in altogether in favour of advising the Tories. Alan Johnson’s resignation has weakened them further, and they will be feeling rather demoralised this evening.

Ed Balls offers the promise, at least, of a different course. In a key speech he made during the leadership contest, he moved towards rejecting the logic of the cuts agenda in favour of a growth strategy. I don’t expect him, as things stand, to present a coherent alternative to the Tory onslaught, but he will be more amenable to pressure from below to do so.

What the Labour left needs to do now is get its act together and start pushing for that alternative. Despite the efforts of the likes of the Left Economics Advisory Panel, it has been a long time indeed since the Labour left has had anything like a detailed economic programme on offer. There is now the biggest potential opening for these ideas that there has been since the Blairite take-over of the Labour Party in 1994.

The Tories are currently using deficit hysteria to brush off the file entitled ‘Tory Right Wet Dreams That Are Politically Impossible In Normal Circumstances’. The danger remains that, without genuine opposition, they will establish a new political consensus. Today’s resignation of Alan Johnson has undermined that project: we’ll see in the coming months by just how much.

Written by Owen Jones

January 20, 2011 at 6:16 pm

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