Paul Krugman said Labour was "weak". Source: Getty Images
Show Hide image

Mehdi Hasan interviews Paul Krugman: Labour is "weak" in its opposition to cuts

The Nobel economist is scathing in his criticism of the two Eds.

In person, Paul Krugman is short, shy and quiet. But the Nobel Prize-winning economist and New York Times columnist isn’t afraid to hurl verbal hand grenades at his opponents – as I discovered to my amusement when I caught up with him on a visit to London this past week.

Krugman, who was in town to plug his new book End This Depression Now!, struggled to find anything positive to say about the EU’s leaders, President Barack Obama or the Israeli government. But it was the Princeton University professor’s comments about the Labour Party that stood out for me.

He was scathingly critical of Labour’s “weak” opposition to the Conservative-led coalition’s spending cuts. “Certainly, economically, they’re too cautious,” he said, dismissing the party’s plan to halve the deficit over four years.

His comments will make uneasy reading for the two Eds, Balls and Miliband, who are petrified of being tagged as “deficit deniers” by their right-wing critics. Under pressure from the Blairites inside the party, they have been trying to find the right balance between opposing the coalition’s austerity measures in the short run and supporting deficit reduction and cuts in the long run.

Krugman seemed to have little sympathy for them: Labour’s position on austerity, he told me, “has been a kind of ‘We’re like them but only less so’. And it does come across as fairly weak.” He continued: “It does seem odd that when you ask me: ‘Where is the really effective intellectual opposition coming from?’, it seems to be think-tank people and journalists. The opposition is Martin Wolf [of the Financial Times], Jonathan Portes [of the National Institute for Economic and Social Research], Simon Wren-Lewis [of Oxford University], David Blanchflower [of the New Statesman] and me.”

That, he said, is a “sad commentary” on the state of Her Majesty’s Opposition.

To add insult to injury, the Nobel laureate had high praise and much sympathy for Miliband’s predecessor, the much-maligned Gordon Brown. “He has been treated unfairly by history,” he said. “Yes, [Brown] made mistakes, but he is a much better guy than his current reputation suggests.”

I asked Krugman if he stood by his now-famous October 2008 description of the former prime minister as the leader who “saved the world financial system”. The economist nodded furiously. “Yes, he took the lead on the financial rescue which did save the world,” he told me. Without [Brown’s leadership], things would have been much, much worse. He was a smart guy.”

Krugman, a long-standing critic of the European single currency, was also keen to remind me how it was Brown who, as chancellor of the exchequer during the late 1990s, “kept Britain out of the euro. It would be a catastrophe here if Britain were in the euro.”

My full interview with the professor will appear in the New Statesman later this year.

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

Getty Images.
Show Hide image

Voters are turning against Brexit but the Lib Dems aren't benefiting

Labour's pro-Brexit stance is not preventing it from winning the support of Remainers. Will that change?

More than a year after the UK voted for Brexit, there has been little sign of buyer's remorse. The public, including around a third of Remainers, are largely of the view that the government should "get on with it".

But as real wages are squeezed (owing to the Brexit-linked inflationary spike) there are tentative signs that the mood is changing. In the event of a second referendum, an Opinium/Observer poll found, 47 per cent would vote Remain, compared to 44 per cent for Leave. Support for a repeat vote is also increasing. Forty one per cent of the public now favour a second referendum (with 48 per cent opposed), compared to 33 per cent last December. 

The Liberal Democrats have made halting Brexit their raison d'être. But as public opinion turns, there is no sign they are benefiting. Since the election, Vince Cable's party has yet to exceed single figures in the polls, scoring a lowly 6 per cent in the Opinium survey (down from 7.4 per cent at the election). 

What accounts for this disparity? After their near-extinction in 2015, the Lib Dems remain either toxic or irrelevant to many voters. Labour, by contrast, despite its pro-Brexit stance, has hoovered up Remainers (55 per cent back Jeremy Corbyn's party). 

In some cases, this reflects voters' other priorities. Remainers are prepared to support Labour on account of the party's stances on austerity, housing and education. Corbyn, meanwhile, is a eurosceptic whose internationalism and pro-migration reputation endear him to EU supporters. Other Remainers rewarded Labour MPs who voted against Article 50, rebelling against the leadership's stance. 

But the trend also partly reflects ignorance. By saying little on the subject of Brexit, Corbyn and Labour allowed Remainers to assume the best. Though there is little evidence that voters will abandon Corbyn over his EU stance, the potential exists.

For this reason, the proposal of a new party will continue to recur. By challenging Labour over Brexit, without the toxicity of Lib Dems, it would sharpen the choice before voters. Though it would not win an election, a new party could force Corbyn to soften his stance on Brexit or to offer a second referendum (mirroring Ukip's effect on the Conservatives).

The greatest problem for the project is that it lacks support where it counts: among MPs. For reasons of tribalism and strategy, there is no emergent "Gang of Four" ready to helm a new party. In the absence of a new convulsion, the UK may turn against Brexit without the anti-Brexiteers benefiting. 

George Eaton is political editor of the New Statesman.