Is Labour right to focus on "dealing with the deficit"?

Douglas Alexander is the latest shadow cabinet member to speak about cuts -- but this may not be the

Labour has continued it's bid for "economic credibility". The latest shadow cabinet member to throw himself behind the new emphasis on cuts is Douglas Alexander, who told the Guardian:

I don't think the public has yet heard us talking enough about dealing with the deficit, as well as talking about the need to boost growth and jobs.

The shadow foreign secretary's intervention by no means a game-changer, but it does indicate determination from Labour top command to reinforce their new line that they would accept the Tories' cuts if in government.

Balls drew the ire of the unions when he committed Labour to a continued public sector pay freeze (with the proviso that help is given to the low paid). This approach -- accepting cuts, but with caveats -- was continued by Alexander in the Guardian interview, when he said that Labour supported the household benefit cap as long as it does not "render people homeless".

Labour has been criticised for an incoherent message, and early polling did not indicate an instant boost. An ICM/Guardian poll this week asked how the tougher position affected likelihood to support Labour. 72 per cent said it made no difference one way or another; just 10 per cent said it would make them more likely to vote Labour, and 13 per cent said it made them less likely to vote for the party, giving the shift a net rating of minus three.

Of course, it has not yet had much time to bed in, which explains the comments from Alexander, a key strategist. We can expect more Labour figures to add their voices to this new "austerity Labour" pot.

He explained his position thus:

There have always been two parts to the Labour argument - a short-term stimulus now to get the economy moving and medium-term cuts to get the deficit down. It was always vital that we won the first part of that argument - that the government are going too far and too fast - and I think thanks to Ed Miliband and Ed Balls we are winning that argument. But the second half of that argument - that the deficit has to come down - has to be emphasised more, and all of us have a responsibility to make that case. We have talked a lot about the first and we need to talk a lot more about the second"

But is this really the best plan, and have we heard a lot about growth? Ultimately, accepting your opponent's terms makes it look like they were right all along. As my colleague Mehdi Hasan recently argued, it would be far more effective for the party to construct their own narrative:

So what should the alternative, Labour frame be? The answer is obvious: growth and jobs. In November 2011, a YouGov poll found that more voters (37 per cent) wanted the government to focus on growth, "even if this means the deficit stays longer, or gets worse", than on reducing the deficit (36 per cent), "even if this means growth remains slow". Given that YouGov's polls show Labour leading the Conservatives by 18 points on job creation but trailing them by 22 points on deficit reduction, it seems strange to focus all the rhetoric and airtime on closing the deficit gap.

Growth has slowed to a halt (it looks like we're already back in recession) and this is an area where the government is vulnerable. Yet it does not look like the opposition will be taking this easy line of attack any time soon.

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

Photo: Getty
Show Hide image

Could Labour implement universal basic income?

The battle over this radical policy is moving gradually into the mainstream.

Shadow chancellor John McDonnell has called universal basic income (UBI) “an idea whose time may well have come”. It means a fixed regular payment to each citizen, irrespective of income or behaviour. It is seen by both socialists and Silicon Valley as a panacea for the post-industrial world, addressing unrestrained inequality, economic insecurity, and automation-generated unemployment in the modern economy.

Guy Standing, a professor at Soas and founding member of Basic Income Earth Network (BIEN), says a “perfect storm of factors have suddenly pushed us into being a mainstream policy question” in recent years. “A lot of people who were sitting on their hands, as it were, have started to come out in favour ... I'm inundated with requests to speak and involvement in conferences, and it's indicative of the sudden realisation that if the growing inequality and growing economic insecurities persist, then the drift to fascist populism will continue. 

“Of course, in the background, a lot of these techies including prominent names in Silicon Valley have come out in favour because they see robots displacing us all. I don't buy that argument, but it's added to a growing chorus of people saying that we should take it more seriously.”

Standing's recent book charts the long history of thinking about UBI (through ancient Greece, Thomas More, and Martin Luther King). But the idea's rise to prominence is the result of a interlinked developments in the economy and the nature of work. As Labour MP Jonathan Reynolds argues, changes such as the rise of self-employment and the gig economy challenge the appropriateness of the traditional welfare state. It's “based around the principle of compulsion, and broadly believing there's two binary states – people in work, and people out of work. We know it's becoming a much more complicated picture than that... The state can't keep up with the complexity of people's lives.”

For Standing, the prospects of UBI being implemented successfully depend largely on how it is framed. He is wary of libertarians who see it as an opportunity to dismantle the welfare state, and believes it needs to be placed within the context of chronic economic insecurity for a growing number within the post-industrial economy.

“The argument that I think is going to prove really important for the left is linked to the growth of the 'precariat',” he says, meaning those living without predictability or security. “People in the precariat are experiencing chronic insecurity that will not be overcome by any existing policy.” 

Even so, support from business could be key. Peter Swenson's work on the history of the welfare state finds that reforms and expansions of social policy have only succeeded when key sections of the capitalist class are in support. He, and other academics, resist the idea that the welfare state is simply the focal point for the battle between left and right over Robin-Hood style redistribution. If UBI is to make its way into policy, support from business may be more important than the strengthening of the left.

Reynolds claims UBI may solve not just policy problems, but political ones.  "You have to say that Labour's situation, in terms of how we've struggled on all of these issues (the party's polling is significantly behind on running the welfare state) over the last few years, means that we should definitely be open to new thinking in this area.” Both he and Standing  are part of the working group that was brought together by McDonnell in February to produce a publication on the issue before the next general election, which would then be discussed across the country. Understandably, the group didn't quite meet its deadline. But Standing says “the general thrust of the plans hasn't changed”.

Standing is hopeful that important sections of the Labour Party are either in support, or can be won over. Clearly, the leadership is generally supportive of the idea – both McDonnell and Corbyn have expressed as much in public statements. Standing says many MPs are “rethinking their position ... many of them have not taken up a position because they thought that this was not an issue to be considered. I think we're seeing a real opening for a much more constructive discussion.”

Reynolds says that “there's people on the right and the left of the party who are in favour, there's people on the right and the left who are against”.
 
Nevertheless, discussion is winning over important Labour constituencies. It's not just radical activist groups, but also trade unions, who are coming round to the idea. According to Standing: “Unite now supports it, as well as a lot of unions in Europe. It used to be the case that the unions were among the most fierce critics of a basic income, on the spurious grounds (in my view) that if people had a basic income they wouldn't push for higher wages and employers wouldn't give higher wages.

“We found in our pilots and in our psychological research that people who have basic security have a stronger bargaining position and are therefore more likely to stand up for their rights, and can lead to improvement in wages and working conditions. So I think that all of those objections are gradually being exposed by theoretical arguments against them, or empirical evidence, from pilots.”

Reynolds agrees that “there's a lot of support coming from the wider labour movement”, but warns that people must not be too optimistic about anything happening quickly. “Clearly it's going to need a radical change to how the tax and benefits system would work, and you'd obviously be completely recasting how personal allowances work, and all of that,” he says. “I think this is sort of the cutting edge of thinking about the future and what our economy will look like in 50-100 years' time, that is the frame that we're looking at.” 

Rudy Schulkind is a Danson scholar who recently graduated in philosophy and politics from St Anne's College Oxford.