The Staggers

The New Statesman’s rolling politics blog

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

Miliband must not let austerity define the next election.

By George Eaton Published 19 July 2012 8:52

David Cameron said he doesn’t “see a time” when austerity will end.

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

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.

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Tags: David Cameron Spending Cuts Ed Miliband Labour

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17 comments

Fri, 2012-07-20 06:42 — steve 3 (not verified)

surely it is time to create a political party that is led not by sons of aristocrats - bankers and other old school public school boys.
It sis time to create a political party that represents the interests of Teachers _ firemen- Police Officers- Nurses - Young People- The Elderly and the much Tory reviled Disabled.
The new party leadership would be people who have been successful in their careers.
No more solicitors or accountants running the show.
Instead - Elected leaders who have business experience - Engineers & Scientists - Doctors - Civil Engineers - Teachers/Educators. and Trade Unionists.
If this nation is to be successful - then Business and Trade Unions have to find ways to bury their age old differences and learn to work together to rebuild our nation.
We need leaders who understand the day to day struggles to provide food on the table and keep a roof over our heads.
Because right now none of the current leaders in all 3 major British parties have little or no idea what its is like to live day to day in Britain.
I am not a big fan of the totalitarian government that rules China- but it should be noted that China's incredible 30 year economic success has been partially created by leaders who come from engineering and science backgrounds in contrast to herds of accountants , solicitors and British public school boys and girls who have the right connections but lack any skills to rebuild this nation.

Fri, 2012-07-20 07:27 — Eddy S (not verified)

I agree totally having leaders from science and engineering would definitely redirect the country to the correct path. New Labour are the same as the Tories there's talk here about public school boys but few know that New Labour are the same, Harriet Harman went to the same school as George Osborne (St Paul's), and the party is full of Oxbridge, career civil servants, lawyers and others such as Miliband who's father and himself don't know a world outside politics. They are even worse actually with there holier than thou approach, trying to pull the wool over our eyes. What we need is real people. Its a shame too we tried to put the brake on elected house of lords, perhaps the MP's are worried about there own jobs?

Thu, 2012-07-19 23:34 — Agent (not verified)

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

Put simply it will end with the government, along with the Lib Dems.

To make sense of his masochistic statement we simply have to exchange 'austerity' for 'big society' and 'end' for 'have any meaning at all' i.e. 'I don't see a time when the big society idea will mean anything at all.

Thu, 2012-07-19 20:36 — Eddy S (not verified)

I personally don't trust the Tories or New Labour to deliver healthy long term growth. New Labour should have invested more cash towards infrastructure spend e.g. Super airports, High Speed Rail and Broadband along with energy generation capability, during a decade of high growth fuelled by finance and property - we should have invested in our long term capability and diversified our economy away from finance but instead we put far too much into state services and benefits. The Tories are trying to re-balance the economy and reduce the level of debts but are in danger of throwing the baby out with the bath water. We need to invest more in infrastructure and spend less on state benefits and services. It's as simple as that!

Thu, 2012-07-19 16:29 — Bill23 (not verified)

Now that we have solid evidence that the great & good are nearly all serious criminals, I think this will be the last generation of toffs to be in power. Depending on how bad things get, they could be luck to escape with their lives.

Thu, 2012-07-19 15:25 — Benjamin Rae (not verified)

Indefinite austerity is hardly a strategy. The guy is a mile out of depth. It's just his arrogance and an ingrained superiority complex that keeps him going.
A shallow amateur operating under failed economic assumptions learned from Thatcher. Although he's relatively young he's leading a government who's economic policies are well out of date.
I do hope Scotland breaks free a political system that produces leaders like these

Thu, 2012-07-19 14:32 — Redjohn (not verified)

Austerity is a cloak under which sits the true reality of the Tory policies: massive privatisation of the last vestiges of state services. Police, schools, health, the military, all up for grabs to the highest bidder.

They are quite happily seeing the country slide into the abyss if it keeps their puppet masters happy. G4S, any number of these lovely folk bidding to suck our health system dry in the name of profit, are almost certainly connected with senior figures in this and the previous government as the gravy train rolls on at the expense of every one else.

The US is no model economy unless you want to target a third world set up, so check this nonsense, start a direct taxation system that can sustain a proper state system balanced out with good management, excellent private enterprise and we have a chance of a sustainable future, based on growth and a future where our kids actually have a chance, rather than a life of servitude.

Thu, 2012-07-19 14:09 — New statesmanMr Bingham (not verified)

Can you not read the writing on the walls ?

People can see right through this Tory Led Coalition.

Thu, 2012-07-19 12:57 — mzaryta (not verified)

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Thu, 2012-07-19 12:39 — frances smith

i think you are giving cameron too much credit for intelligence here.

we ordinary mortals, outside the political class, have noticed, since he became prime minister, how incapable he is of genuinely capturing the public mood.

so i think this is a defensive strategy. and the biggest problem for the tories is that they are too associated with the evil excesses of capitalism, to take austerity too far, no matter how much they love it, this position id very easy to attack from the left, as you don't need to travel even as far as the centre line to do it, you can still inhabit a position well to the right of centre, and attack the tories over their relationship with the very rich, and enthusiasm for austerity, if you link the two.

cameron also went to some effort in this interview to blame the eurozone for all our economic woes, but by the time of the next election, this will excuse is going to look as tired as the its all labour excuse (not that they didn't do a lot of things wrong) but their main fault was to embrace thatcherism.

so miliband and balls are going to have to abandon their free market monetarist economic policies to attack cameron properly, but its very easy to do.

Thu, 2012-07-19 11:34 — Steve AM (not verified)

They thought austerity was only going to last a few years but things change, ideas change and politics change. No one really knows what is going to happen or what has to be done because what is being done by the main is ideological policies or politics. It’s down to Miliband and Labour to propose an alternative to what the Tories have to offer and an alternative that grips people to vote for Labour with it’s alternative.
Camerons austerity is politics, that is all.

Thu, 2012-07-19 10:00 — Will Slater (not verified)

Oh wow. So because the Tories know they are facing a massive uphill battle. Instead of painting a future for the UK, they stick to what worked (almost) at the last General Election by scaring people to death with Austerity?

Tories will not win in 2015. Simple. They have alienated too many voters and they have no chance of capturing the swing voters

According to a polling website, there is an 85% chance of a Labour majority in 2015

Thu, 2012-07-19 12:57 — Bill23 (not verified)

I usually vote conservative, but they are just too close to the bankers. If we can't punish the bankers who should go to jail (or the execution chamber if they were in China), then how can people vote for them when many of them are bankers, or at least closely related to these criminals.

Thu, 2012-07-19 09:23 — beltsonata (not verified)

@ActuarialChris

You can promise it. That doesn't mean you're going to deliver it.

Thu, 2012-07-19 09:16 — ActuarialChris (not verified)

" 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."

I'm sorry but this is nonsense, growth is not a policy or something you can make it is an potential outcome of policy. Framing your manifesto for re-election promising a policy of growth is a lie pure and simple, nobody can promise it because nobody can forecast the future, if we could we'd all be very rich!

Thu, 2012-07-19 10:04 — Will Slater (not verified)

I agree no one can promise growth. However I think you can create the conditions for it. But saying that, there is no saying what would happen. The markets are far too fickle and they need major reform, as well as bringing the ability to create money back under public control

Thu, 2012-07-19 16:16 — Redjohn (not verified)

No one can predict growth, but I think we can safely say that austerity does not create growth, it does not create stability, it simply allows the platform for massive privatisation. That is ALL this is about . Example:

Greece and Spain, what is the key criteria for their loans?: privatising state energy, water companies etc. What the hell does that allow them to do? It means the banks who are strangling them will then allow them loans as long as the super rich get to buy their key assets and effectively control their economies. Either way, the poorer and middle classes lose as their bills skyrocket.

Couple that with economies that have stagnated, frozen wages and these same poorer people become even poorer, lose their homes and buy nothing. The rich then offer them loans at Wonga rates and further cripple them. You get where I'm heading with this?; capitalism eats itself through its rapacious greed.