How Labour can still win

A four-point plan for Labour to build a new coalition of voters

The 2010 election is the first since 1992 when the question "Who will govern?" could be genuinely at stake. The first New Year skirmishes of the long campaign showed the Conservatives surprisingly underprepared, but Labour vulnerable to self-harm.

This Saturday's Fabian New Year conference "Causes to Fight For", with the New Statesman as a media partner, will examine how the left could influence the election-year agenda. Labour is a clear underdog, yet even the current 10-point poll deficit may not translate into a Tory Commons majority. To close the gap, Labour needs to persuade the fragmenting coalitions of voters which brought it three victories that the election result matters.

Can Labour persuade working-class voters that the threat of Tory austerity is sufficent reason to turn out?

And, on the liberal left, will Staggers readers, many of them disillusioned with Labour, feel they have a stake in the outcome? How might Labour seek to re-engage?

Be honest about the record

An honest account of Labour's record on progressive causes would argue that it is substantial but mixed. Labour could not have done a great deal more on international development, but some will never forgive it over Iraq. There was significant progress on pensioner and child poverty, but not in reversing inequality. The minimum wage and more money for schools and the NHS made a difference, but there was an uncritical reliance on finance-led growth.

Ed Miliband has belatedly brought more vigour to a pale green record. Key constitutional reforms -- freedom of information and devolution -- will endure, but a new constitutional settlement was kicked into the long grass. Britain is more socially liberal, with the quiet revolution of civil partnerships, yet arguments about crime, immigration and welfare have often become harsher.

In each of these areas -- excepting civil liberties, the most significant blind spot -- the Conservative leadership has conceded significant territory to Labour's record, rhetorically at least. It is now for Labour to show that its future agenda has substantively more to offer those seeking a fairer, more equal and greener society.

Ensure Labour has a positive message

The focus of Labour's campaign has been on ensuring that the Conservatives face the scrutiny of a would-be government-in-waiting. That the Conservatives are ahead in framing the election year can be seen in how often ministers seem forced to contest Tory narratives -- a debt crisis, the broken society, or the (ludicrous) idea that Labour has declared "class war".

The related charge that Labour has a "core vote" strategy does not stack up: the party was rather more vocal in its condemnation of lack of "fat cat" support for a windfall tax and over "rewards for failure" under Tony Blair in 1997 than it is over banker bonuses now.

The intention is to intimidate Labour into muting its positive argument. This should be framed around the idea that "fairness doesn't happen by chance", and is a question of policy choices not political language, with substantive tests -- in whom we tax and where we spend -- of what a politics of fair chances and fair rewards means as distributional choices get tougher.

Be clearer about spending

But that also depends on Labour opening up the "what not to spend" debate. The Conservative strategy is "safety first and run down the election-year clock". The fledgling centrist Cameronism of 2006-2007 has shrunk to pledging the status quo on the NHS (and development) in exchange for a "doctor's mandate" for austerity and cuts everywhere else. (The opening "Trust Dave" poster is explicit about this offer). Only by being more open about its own future spending plans in the March Budget, however painful, will Labour open up what cutting faster and deeper entails.

Sow the seeds of a new pluralism

Whatever the outcome in 2010, the economic and political crises of the past two years make new thinking necessary on key questions, from a more sustainable "next capitalism" to new ways of doing politics, too.

Both Stuart White on the Staggers and Will Straw on Next Left yesterday made the case for a more pluralist left movement politics.

Restarting these conversations can be difficult. Despite its broad popularity in the mid-1990s, New Labour narrowed into a politics of certainty that repelled those not part of "the project" -- a sharpness reciprocated in critiques from those to its left.

Pluralism needs to be a two-way street. Labour is essential, but probably not sufficient, to future governing projects of the left. Debate is the stuff of politics. One of the first challenges of a new pluralism is whether, where we disagree, we can do so with mutual respect.

Sunder Katwala is general secretary of the Fabian Society. He blogs at Next Left

 

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Sunder Katwala is director of British Future and former general secretary of the Fabian Society.

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Leader: The unresolved Eurozone crisis

The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving.

The eurozone crisis was never resolved. It was merely conveniently forgotten. The vote for Brexit, the terrible war in Syria and Donald Trump’s election as US president all distracted from the single currency’s woes. Yet its contradictions endure, a permanent threat to continental European stability and the future cohesion of the European Union.

The resignation of the Italian prime minister Matteo Renzi, following defeat in a constitutional referendum on 4 December, was the moment at which some believed that Europe would be overwhelmed. Among the champions of the No campaign were the anti-euro Five Star Movement (which has led in some recent opinion polls) and the separatist Lega Nord. Opponents of the EU, such as Nigel Farage, hailed the result as a rejection of the single currency.

An Italian exit, if not unthinkable, is far from inevitable, however. The No campaign comprised not only Eurosceptics but pro-Europeans such as the former prime minister Mario Monti and members of Mr Renzi’s liberal-centrist Democratic Party. Few voters treated the referendum as a judgement on the monetary union.

To achieve withdrawal from the euro, the populist Five Star Movement would need first to form a government (no easy task under Italy’s complex multiparty system), then amend the constitution to allow a public vote on Italy’s membership of the currency. Opinion polls continue to show a majority opposed to the return of the lira.

But Europe faces far more immediate dangers. Italy’s fragile banking system has been imperilled by the referendum result and the accompanying fall in investor confidence. In the absence of state aid, the Banca Monte dei Paschi di Siena, the world’s oldest bank, could soon face ruin. Italy’s national debt stands at 132 per cent of GDP, severely limiting its firepower, and its financial sector has amassed $360bn of bad loans. The risk is of a new financial crisis that spreads across the eurozone.

EU leaders’ record to date does not encourage optimism. Seven years after the Greek crisis began, the German government is continuing to advocate the failed path of austerity. On 4 December, Germany’s finance minister, Wolfgang Schäuble, declared that Greece must choose between unpopular “structural reforms” (a euphemism for austerity) or withdrawal from the euro. He insisted that debt relief “would not help” the immiserated country.

Yet the argument that austerity is unsustainable is now heard far beyond the Syriza government. The International Monetary Fund is among those that have demanded “unconditional” debt relief. Under the current bailout terms, Greece’s interest payments on its debt (roughly €330bn) will continually rise, consuming 60 per cent of its budget by 2060. The IMF has rightly proposed an extended repayment period and a fixed interest rate of 1.5 per cent. Faced with German intransigence, it is refusing to provide further funding.

Ever since the European Central Bank president, Mario Draghi, declared in 2012 that he was prepared to do “whatever it takes” to preserve the single currency, EU member states have relied on monetary policy to contain the crisis. This complacent approach could unravel. From the euro’s inception, economists have warned of the dangers of a monetary union that is unmatched by fiscal and political union. The UK, partly for these reasons, wisely rejected membership, but other states have been condemned to stagnation. As Felix Martin writes on page 15, “Italy today is worse off than it was not just in 2007, but in 1997. National output per head has stagnated for 20 years – an astonishing . . . statistic.”

Germany’s refusal to support demand (having benefited from a fixed exchange rate) undermined the principles of European solidarity and shared prosperity. German unemployment has fallen to 4.1 per cent, the lowest level since 1981, but joblessness is at 23.4 per cent in Greece, 19 per cent in Spain and 11.6 per cent in Italy. The youngest have suffered most. Youth unemployment is 46.5 per cent in Greece, 42.6 per cent in Spain and 36.4 per cent in Italy. No social model should tolerate such waste.

“If the euro fails, then Europe fails,” the German chancellor, Angela Merkel, has often asserted. Yet it does not follow that Europe will succeed if the euro survives. The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving. In these circumstances, the surprise has been not voters’ intemperance, but their patience.

This article first appeared in the 08 December 2016 issue of the New Statesman, Brexit to Trump