Credibility is Labour leader’s hygiene factor

New leader needs to convince people that the deficit was not mismanagement but a way of avoiding a d

Pat McFadden MP was absolutely right to argue today that if Labour only opposes cuts there is a "danger of being tuned out by the electorate". But in many ways, the electorate has tuned Labour out already and the challenge is to tune it back in.

Being credible on the deficit is now a hygiene factor for Labour's next leader. All the candidates, and Labour's frontbenchers, are leading opposition to the unfairness of the Budget and the cuts to come in October's Spending Review. This is politically necessary, but not politically sufficient. Labour will get elected again, not on the determination of its opposition, but on the credibility of its alternative.

The perceived wisdom of the 1992 shadow Budget is that setting out proposals in opposition for necessary tax rises -- or indeed, spending cuts -- is political suicide. But it was a significant move this week from Ed Balls that started this debate, after he told the BBC's Laura Kuenssberg that it was a "mistake" for Labour to promise to halve the deficit in four years.

It was a major scoop for her, but did he mean to go public with this view? He hasn't yet said what his alternative would be and so has left himself a credibility gap for the other candidates to probe at the next hustings, in London this Friday.

The dilemma remains: how does Labour prove credibility without being explicit about either alternative cuts or tax rises? It almost certainly can't be done.

At the end of last week, Ed Miliband said Labour shouldn't be locked into the 2:1 ratio for cuts and tax rises, as stated in Labour's manifesto. He said the new leader should outline cuts by the time of October's Spending Review and suggested that tax rises play a bigger role. Andy Burnham has since joined the call for more tax rises and has been bold and consistent in arguing that raising the NHS budget while cutting the social care budget is a mistake.

These are more forward-looking attempts at gaining distinction and they do help move Labour on from what felt, at the time, like a credible deficit reduction plan on page 6 of Labour's manifesto. Page 6 was the core script for all Labour spokespeople during the election, and in interview after interview, Ed Balls and others made it sound credible. Having lost an election so dominated by the Tory campaign against a National Insurance rise, Labour now needs a new deficit reduction plan that is not politically tarnished.

David Miliband has suggested doubling the banking levy and introducing a "mansion tax". Ed Balls would start the 50p income-tax rise at £100,000 and Ed Miliband would make it permanent. Yet all the candidates are struggling for credibility, because these tax rises don't add up to the spending cuts they are seeking to prevent and the VAT hike they voted against last night. Demos has costed an alternative, but it is not the only option.

McFadden is right that the Tories and Lib Dems want Labour to "retreat to its comfort zone" so that they can argue Labour is responsible for the deficit and that "they alone are capable of facing up to Britain's problems".

Labour's next leader needs to win two arguments at the same time. The first is that the deficit was not mismanagement, but a decision taken to prevent recession turning to depression. The second is that Labour's new leader can now be trusted to reduce it. The public will not accept one without the other.

Richard Darlington is head of the Open Left project at Demos.

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Richard Darlington is Head of News at IPPR. Follow him on Twitter @RDarlo.

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Seven things we learnt from the Battle for Number 10

Jeremy Corbyn emerged the better as he and Theresa May faced a live studio audience and Jeremy Paxman. 

1. Jeremy Corbyn is a natural performer

The Labour leader put in a bravura performance in both the audience Q&A and in his tussle with Jeremy Paxman. He is often uncomfortable at Prime Minister’s Questions but outside of the Commons chamber he has the confidence of a veteran of countless panels, televised discussions and hustings.

If, like me, you watched him at more hustings in the Labour leadership contests of 2015 and 2016 than you care to count, this performance wasn’t a surprise. Corbyn has been doing this for a long time and it showed.

2. And he’s improving all the time

Jeremy Corbyn isn’t quite perfect in this format, however. He has a temper and is prone to the odd flash of irritation that looks bad on television in particular. None of the four candidates he has faced for the Labour leadership – not Yvette Cooper, not Andy Burnham, not Liz Kendall and not Owen Smith – have managed to get under his skin, but when an interviewer has done so, the results have never been pretty for the Labour leader.

The big fear going into tonight for Corbyn was that his temper would get the better of him. But he remained serene in the fact of Paxman’s attempts to rile him until quite close to the end. By that point, Paxman’s frequent interruptions meant that the studio audience, at least, was firmly on Corbyn’s side.

3. Theresa May was wise to swerve the debates

On Jeremy Corbyn’s performance, this validated Theresa May’s decision not to face him directly. He was fluent and assured, she was nervous and warbly.  It was a misstep even to agree to this event. Anyone who decides their vote as far as TV performances tonight will opt for Jeremy Corbyn, there’s no doubt of that.

But if she does make it back to Downing Street it will, in part, be because in one of the few good moves of her campaign she chose to avoid debating Corbyn directly.

4.…but she found a way to survive

Theresa May’s social care U-Turn and her misfiring campaign mean that the voters don’t love her as they once did. But she found an alternate route through the audience Q&A, smothering the audience with grimly dull answers that mostly bored the dissent out of listeners.

5. Theresa May’s manifesto has damaged her. The only question is how badly

It’s undeniable now that Theresa May’s election campaign has been a failure, but we still don’t know the extent of the failure. It may be that she manages to win a big majority by running against Jeremy Corbyn. She will be powerful as far as votes in the House of Commons but she will never again be seen as the electoral asset she once was at Westminster.

It could be that she ends up with a small majority in which case she may not last very much longer at Downing Street. And it could be that Jeremy Corbyn ends up defeating her on 8 June.

That the audience openly laughed when she talked of costings in her manifesto felt like the creaking of a rope bridge over a perilous ravine. Her path may well hold until 8 June, but you wouldn’t want to be in her shoes yourself and no-one would bet on the Conservative Party risking a repeat of the trip in 2022, no matter what happens in two weeks’ time.

6. Jeremy Paxman had a patchy night but can still pack a punch

If Jeremy Paxman ever does produce a collected Greatest Hits, this performance is unlikely to make the boxset. He tried and failed to rouse Jeremy Corbyn into anger and succeeded only in making the audience side with the Labour leader. So committed was he to cutting across Theresa May that he interrupted her while making a mistake.

He did, however, do a better job of damaging Theresa May than he did Jeremy Corbyn.  But not much better.

7. Theresa May may have opposed Brexit, but now she needs it to save her

It’s not a good sign for the sitting Prime Minister that the audience laughed at many of her statements. She had only one reliable set of applause lines: her commitment to getting the best Brexit deal.

In a supreme irony, the woman who opposed a Leave vote now needs the election to be a referendum re-run if she is to secure the big majority she dreams of. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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