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Owen Jones: Ed Balls' surrender is a political disaster

The shadow chancellor's capitulation on cuts and public sector pay offers vindication for the Tories, says Owen Jones.

I never expected to become a defender of New Labour's record, let alone against its own most zealous supporters. At this point, I should clarify that I haven't been kidnapped by Peter Mandelson and transformed into a Blairite drone. What I mean is that among all the disappointments and betrayals of the New Labour era, there were genuine social advances. They are now being shredded at lightning speed by a radical Tory government - but with the increasing complicity of the Labour leadership.

Just after news broke on Friday that Ed Balls had regretfully announced the next Labour Government is 'going to have to keep all these cuts' and declared his support for the Government's public sector pay freeze, I spent my evening debating Tory ex-Minister Edwina Currie on Stephen Nolan's 5 Live show.

Currie was in full-on triumphalist mode, gloating that Labour had accepted that the Tories were right all along. I couldn't blame her. Before coming on air, I listened to a spokesperson for the hard-right Taxpayers Alliance similarly praising Balls to the hilt. At the same time, I scrolled through Twitter, wincing as prominent Tories and Liberal Democrats proclaimed victory. 'You lose,' tweeted right-wing blogger Harry Cole to Balls' political advisor Alex Belardinelli.

Tory MP Robert Halfon couldn't contain his glee, either: he promptly cobbled together a blog post entitled 'Ed Balls comes out... as a Conservative', bragging that the Shadow Chancellor had appeared 'to sign up to Coalition economic policy'. 'After months of opposition, the Labour Party appear to have conceded defeat,' he boasted, adding that he thought 'Coalition Ministers will be able to sleep safer in their beds in future'.

The stifling of Labour's internal democracy is taken so much for granted that no-one has even bothered to pass comment on the lack of consultation before Ed Balls' announcement. One leading MP was stunned, telling me that the Parliamentary Labour Party was given no prior warning and would be 'shellshocked' when they returned to Westminster. As for trade unions or party members -- well, you are well within your rights to chuckle that I've even bothered to mention them.

Ed Balls' surrender is a political disaster. It offers vindication for the Tories' economic strategy, even as it is proven to fail. Growth has been sucked out of the economy. Consumer confidence has plummeted. Unemployment is soaring, with no sign of the promised 'private sector-led recovery'. Even on its own terms, the Government's austerity measures have failed disastrously: George Osborne will borrow more than Alistair Darling's plan, so derided by the Tories at the last general election. As for the impact the cuts are beginning to have on our communities and those groups being pummelled hardest (women, young people, and the disabled, for instance) - well, that's simply incalculable.

But rather than trying to push a coherent argument against this disastrous austerity programme, it is now being treated as a fait accompli. Sure, the cuts are now necessary because of George Osborne's mistakes, but they are nonetheless here to stay. Labour can no longer talk about how these cuts are inherently destructive, because otherwise it would have to commit to reverse them. Neither can it aim fire at their ideological nature, as when Cameron announced they were permanent before the election: that is, after all, now Labour's starting point too.

And it will surely fuel the sense that the Conservatives are making the necessary tough economic decisions, and Labour are simply playing catch-up. This is a large part of the catastrophe that has befallen Labour since the biggest economic crisis since the 1930s began. The Tories were allowed to transform a crisis of the market into one of public spending because Labour failed to offer a coherent alternative narrative. The role of collapsing tax revenues and rising welfare spending as unemployment rose barely got a mention; the Tories managed to get away with the fact they backed Labour's spending plans pound for pound until the end of 2008.

When I complained about this suicidal strategy - or, rather, suicidal absence of one - to a shadow minister at Labour Party Conference in September, they responded quick as a flash that we did indeed have a deficit because Labour overspent. I confess that - at this point - I felt that if senior Labour figures were happy to accept dishonest blame handed out by the Tories, then it was hopeless.

This latest surrender to the Tory cuts agenda comes after a protracted struggle at the top of the leadership. One faction argued that, once you started specifying cuts, there would be a loss of focus on their deflationary impact, and that the Tories would come back for more and more detail on Labour's spending plans. We now know this argument has been decisively defeated.

Arch-Blairite Jim Murphy - who harbours ambitions to stand for leadership should Ed Miliband fail - began rolling out the new strategy earlier in the month by calling for Labour to avoid 'shallow and temporary' populism over spending cuts, setting out his own proposed cuts as an example to his colleagues. The equally devout Blairite shadow education secretary Stephen Twigg has partly endorsed Michael Gove's attacks on the scrapped Building Schools for Future programme, and has outlined £2bn of his own cuts. And Liam Byrne has committed Labour to a renewed attack on the welfare state, currently being hacked to pieces by the Government. I bet the word 'vindicated' will be used liberally around the corridors of Conservative Campaign Headquarters next week.

And so former arch-critics of Blair and Brown such as myself are forced to defend large chunks of their record from their acolytes. New Labour's major departure from Thatcherite orthodoxy was investment in public services. It is now being torched with the approval of Blairites and Brownites. Clement Attlee and Margaret Thatcher headed the two transformative governments of post-war Britain, each establishing a new political consensus by forcing their oppositions to accept the key tenets of their programmes. Cameron looks set to follow in their footsteps, with New Labour an interregnum that temporarily tinkered with the Thatcher consensus, much like the Tory governments of the 1950s and the Attlee consensus.

As the usually thoughtful Tory Peter Oborne put it:

A sea change is at work. In practically every area of British public life - state spending, the economy, education, welfare, the European Union (where Ed Miliband refused to condemn Cameron's pre-Christmas veto), mass immigration, law and order - Conservatives are winning the argument and taking policy in their direction.

It is not inevitable, of course. It is being allowed to happen because there is a lack of countervailing pressure from below. If a broad coalition of Labour activists and trade unions united around a coherent alternative and put concerted pressure on the leadership, this surrender can be stopped in its tracks. With the Shadow Cabinet set to continue its suicidal course, time is running out - but it is the only hope to stop Cameron transforming Britain forever.

Owen Jones is a left-wing columnist, author and commentator. He is a contributing writer to the New Statesman and writes a weekly column for the Guardian. He has published two books, Chavs: the Demonisation of the Working Class and The Establishment and How They Get Away With It.

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Google’s tax worries, Oxford’s race dilemma and the left-wing case for leaving Europe

The truth is that many black students looking at the white, middle-class Oxford would justifiably conclude that they don’t belong.

As a Gmail user and a Google searcher, am I morally compromised by using the services of a serial tax avoider? Surely not. Google gets roughly 95 per cent of its revenues from advertising and much of that from clicks on the ads that surround its offerings. I have long observed a rule never to click on any of these, even when they advertise something that I need urgently. Instead, I check the seller’s website address and type it directly into my browser.

Taking full advantage of its services without contributing to its profits strikes me as a very good way of damaging the company. More problematic are pharmaceutical companies such as AstraZeneca (zero UK corporation tax in 2014) and GlaxoSmithKline (UK corporation tax undisclosed but it has subsidiaries in tax havens), which makes many prescription drugs and consumer products such as toothpaste – I chew it to stop me smoking. To boycott all such companies, as well as those that underpay their workers or pollute the planet, one would need, more or less, to drop out from the modern world. Consumer boycotts, though they have a certain feel-good factor, aren’t a substitute for electing governments that will make a concerted effort to tax and regulate big corporations.

 

After EU

David Cameron is finding it hard to get changes to EU rules that he can credibly present as concessions. But the talks that would follow a vote for Brexit would be a hundred times more difficult. Ministers would need to negotiate access to the single market, renegotiate trade deals with 60 other countries and make a deal on the status of Britons living in the EU, as well as EU citizens living here. All this would create immense uncertainty for a fragile economy.

With a current-account trade deficit of 4 per cent, the dangers of a run on sterling would be considerable. (This apocalyptic scenario is not mine; I draw on the wisdom of the Financial Times economics editor, Chris Giles.) But here’s the question. If the UK got into the same pickle as Greece – and George Osborne had to do a Norman Lamont, popping out of No 11 periodically to announce interest-rate rises – Jeremy Corbyn would walk the 2020 election. Should we lefties therefore vote Out?

 

University blues

Hardly a Sunday now passes without David Cameron announcing an “initiative”, either on TV or in the newspapers. The latest concerns the under-representation of black Britons at top universities, notably Oxford, which accepted just 27 black students in 2014 out of an intake of more than 2,500. As usual, Cameron’s proposed “action” is risibly inadequate: a requirement that universities publish “transparent” data on admissions and acceptances, much of which is already available, and a call for schools to teach “character”, whatever that means.

The truth is that many black students looking at the white, middle-class Oxford – with its disproportionate numbers from a handful of fee-charging schools, such as Eton – would justifiably conclude that they don’t belong. Cameron rules out quotas as “politically correct, contrived and unfair”. But quotas in some form may be what is needed if young people from poor white, as well as black, homes are ever to feel that they would be more than interlopers.

In the meantime, Cameron could tell elite universities to stop setting ever-higher barriers to entry. As well as demanding two A*s and an A at A-level, Oxford and Cambridge are introducing tests for “thinking skills” and subject-specific “aptitude”. Whatever the developers of such tests claim, it is possible to coach students for them. State schools don’t have the resources to do so or even to research the complex requirements of the various colleges and subjects. Oxbridge admissions tutors must know this but evidently they don’t care.

 

A fine balance

The latest government figures show that, despite the former education secretary Michael Gove introducing £60 fines for parents who take their children on term-time breaks, the days lost to unsanctioned holidays are up by 50 per cent to three million in four years. This was a predictable result. Previously, the sense of an obligation to respect the law and set their children an example of doing so persuaded most parents to confine absences to school holidays. Now a modest price has been placed on term-time holidays. Parents do the sums and note that they save far more than £60 on cheaper flights and hotels.

A similar outcome emerged in Israel when daycare centres introduced fines for parents who arrived late. Previously, most preferred to avoid the embarrassment of apologising to a carer and explaining why they had been delayed. Once it became just a monetary transaction, many more happily arrived late and paid the price.

 

Minority report

Here in Loughton, Essex, where I live quietly and unfashionably, we are dancing in the streets. Well, not quite, but perhaps we ought to be. According to an analysis by the Policy Exchange think tank, Loughton is the third most integrated community in England and Wales, just behind Sutton Coldfield in the West Midlands and Amersham, Buckinghamshire, but above 157 others that have significant minorities. We are well ahead of fashionable London boroughs such as Islington and Hackney, where residents obviously keep Muslims and eastern Europeans out of their vibrant dinner parties, whereas we have bearded imams, African chiefs in traditional dress and Romanian gypsies dropping in for tea all the time.

Again, not quite. I’m not sure that I have met that many non-indigenous folk around here, or even seen any, except in the local newsagents. Still, I am grateful to Policy Exchange for brushing up Loughton’s public image, which was in need of a facelift after the BNP won four seats on the council a few years ago and a TOWIE actor opened a shop on the high street.

Peter Wilby was editor of the Independent on Sunday from 1995 to 1996 and of the New Statesman from 1998 to 2005. He writes the weekly First Thoughts column for the NS.

This article first appeared in the 05 February 2015 issue of the New Statesman, Putin's war