Cameron's promise of more austerity is an election trap for Labour

Miliband must not let austerity define the next election.

The economic significance of David Cameron's suggestion that austerity will last until 2020 is far outweighed by the political significance. Three years out from the next election, the Prime Minister is already attempting to define the terms on which it will be fought. Having previously indicated that austerity will last for another two years, he now speaks of a full five.

In part, this is an admission of failure. The Conservatives' original plan was to go into the 2015 election able to boast that they had cleaned up "the mess" left by Labour - a powerful political narrative - and offer significant cuts in personal taxation. But the failure of George Osborne's deficit reduction plan (the OBR forecasts that the UK will have a deficit of at least £79bn - 4.5% of GDP - in 2015) has forced them to abandon this strategy. Gone are the "sunlit uplands" that Cameron once spoke of, now he forecasts only grey skies. In the Prime Minister's view, however, all is not lost. If the next election is defined by austerity, he believes it is the Tories, rather than Labour, who will benefit. Cameron and Osborne will attempt to paint Labour as the defender of a bloated welfare system (they are encouraged by the popularity of the coalition's benefits cap) and an overmighty public sector. Osborne's promise of another £10bn in welfare cuts is an early preview of this strategy, with Labour uncertain how to respond.

The biggest question now facing the party is whether to allow Cameron to frame the debate or whether to resist him. Should the party accept the Tories' spending plans with some modifications (as it did in 1997), or should it offer a distinct alternative? If it is to win the next election, it must take the latter course. Labour will not triumph on a platform of austerity-lite. Instead, rather than allowing the next election to be defined by austerity, it must ensure it is defined by growth. As Labour MP Gregg McClymont argued last year in a pamphlet for Policy Network, "A patriotic appeal to the nation to improve growth and living standards, not a simple defence of the public sector and public spending, is crucial to foiling Conservative attempts to render Labour the party of a sectional minority."

The frame for Labour's policy offering should be a promise of national reconstruction. Having established a narrative of renewal and growth, it can then move to propose specific institutions such as a British Investment Bank. In 1945, it was Clement Attlee's promise of national revival that allowed him to triumph over the war lion Winston Churchill. Nearly seventy years later, a patriotic vow to "rebuild Britain" could do the same for Miliband.

David Cameron said he doesn’t “see a time” when the government’s austerity programme will end. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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How Theresa May laid a trap for herself on the immigration target

When Home Secretary, she insisted on keeping foreign students in the figures – causing a headache for herself today.

When Home Secretary, Theresa May insisted that foreign students should continue to be counted in the overall immigration figures. Some cabinet colleagues, including then Business Secretary Vince Cable and Chancellor George Osborne wanted to reverse this. It was economically illiterate. Current ministers, like the Foreign Secretary Boris Johnson, Chancellor Philip Hammond and Home Secretary Amber Rudd, also want foreign students exempted from the total.

David Cameron’s government aimed to cut immigration figures – including overseas students in that aim meant trying to limit one of the UK’s crucial financial resources. They are worth £25bn to the UK economy, and their fees make up 14 per cent of total university income. And the impact is not just financial – welcoming foreign students is diplomatically and culturally key to Britain’s reputation and its relationship with the rest of the world too. Even more important now Brexit is on its way.

But they stayed in the figures – a situation that, along with counterproductive visa restrictions also introduced by May’s old department, put a lot of foreign students off studying here. For example, there has been a 44 per cent decrease in the number of Indian students coming to Britain to study in the last five years.

Now May’s stubbornness on the migration figures appears to have caught up with her. The Times has revealed that the Prime Minister is ready to “soften her longstanding opposition to taking foreign students out of immigration totals”. It reports that she will offer to change the way the numbers are calculated.

Why the u-turn? No 10 says the concession is to ensure the Higher and Research Bill, key university legislation, can pass due to a Lords amendment urging the government not to count students as “long-term migrants” for “public policy purposes”.

But it will also be a factor in May’s manifesto pledge (and continuation of Cameron’s promise) to cut immigration to the “tens of thousands”. Until today, ministers had been unclear about whether this would be in the manifesto.

Now her u-turn on student figures is being seized upon by opposition parties as “massaging” the migration figures to meet her target. An accusation for which May only has herself, and her steadfast politicising of immigration, to blame.

Anoosh Chakelian is senior writer at the New Statesman.

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