Labour must not be defined by opposition to the cuts

Miliband is right to ignore the 'stand and fight brigade' and shift his economic stance.

The clamour for a change in Labour's economic stance that began with In The Black Labour is now growing daily. Ed Miliband's speech today signalled that the change is underway. Many in and around the party will be cautiously relieved. Many others, however, will be deeply disappointed.

Commentators such as Mehdi Hasan and Polly Toynbee have demanded in recent days that Ed ignores the demands for a more clearly hawkish line. Instead, they urge, he should stand and fight for what he and they know is right and morally sound. Good economics makes good politics and, sooner or later, the electorate will realise that Labour was correct all along. They undoubtedly represent a very strong seam of belief within the party and wider movement.

But there are big problems with this 'stand and fight because we're right' position.

In the first place, it assumes parties win elections because they have a correct analysis and the soundest values. This would imply that the Conservative Party had the best policies for the eighteen years prior to 1997. A view to which Mehdi and Polly, I assume, do not subscribe.

It also overlooks the fact that every party and their supporters believes they are correct. We may caricature Tories or Lib Dems as ignorant or self-serving rather than sincere in their views but they think exactly the same about Labour. This reveals a fundamental truth about politics which is that the great majority of people just think they are right. Rational, evidence-based debate has only a limited impact, in part because it is very rarely conclusive. Assuming that the inherent rationalism and morality of our particular version of 'rightness' will win out is to flirt with a profound naiveté.

Indeed Labour's economic case is not nearly as self-evidently right as the 'stand and fight' brigade think it is. Yes, there is a good case to be made for a slower pace of deficit reduction or even a small stimulus as enshrined in Labour's five point plan. Wise men such as Martin Wolf, who hold no brief for Labour, have made the case many times. But arguing that a slower path to deficit reduction would be a wise policy is not the same as saying that our economic prayers would be answered by such a move. Inflation has been too high, productivity too low, investment too stagnant, global economic and political volatility too great for a small shift in fiscal policy to really blow away the storm clouds. In truth, Mehdi and Polly want to stand and fight, tooth and nail for something that would do some measure of good but probably not a great deal more than that.

What actually despatches governments is events not the right arguments. Most voters live their lives and ignore the detailed debates that occupy the political classes. It is usually only when something so big and bad happens that it cannot be ignored that voters think seriously about replacing the current lot with that other lot. That was the case with the Winter of Discontent before the 1979 election, the ERM crisis before the 1997 election and the banking crash before the 2010 election. A party in opposition has to rebuild its lost credibility in preparation for that moment. This is vital because, as the 1990 recession showed, a big event will not necessarily play for an opposition if they are not yet trusted to take over the reins of government. In short, a new opposition party needs honestly and painfully to understand why it lost the election and forensically address those failings not exclusively kick lumps out of the new government. Anyone who thinks this can be done without making an almighty effort to regain Labour's reputation for fiscal prudence and economic competence is buried far too snugly in their comfort zone.

Many will read this post and think it is simply arguing for Labour to roll over, adopt a Tory-lite position and hang patiently around until the voters get fed up with Cameron. That would be a misinterpretation. Opposition parties must stand and fight but they must make sure they have a chance of winning. Don't leap into the ring and start throwing punches if the referee (the media) and the ringside judges (the voters) have already decided you're a loser.

So support a slower pace of deficit reduction but don't make it the defining feature of the fight with the coalition. Instead use what few opportunities we have to persuade the ref and the judges that we're not quite as useless as they think we are. That must mean emphasising our commitment to tough-minded, fiscal practice, first and foremost.

Once that is established Labour might begin to get listened to on its wider message and where it might start landing blows on the government. Then it is time to start drawing the distinctions. Emphasise Labour's bolder policy for jobs and growth by using the power of the state to actively restore the competitiveness of British business rather than Osborne's reheated and chaotic Lawsonism. And, yes, talk about a vision for a fairer, more responsible capitalism but make it clear this is a vision for fairness within the context of austerity - a new type of social democracy for very different and difficult times.

Fortunately, this seems to be precisely the thinking behind Ed's speech this morning. There is much, much more to be done but, despite what the 'stand and fight' brigade might now say, the genuine fight-back may just have begun.

Adam Lent is co-author of In the Black Labour and formerly Head of Economics at the TUC. He can be followed on Twitter: @adamjlent.

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Why Russia holds the key to resolving the North Korea crisis

China is propping up North Korea’s economy, but it seems to get little influence in return.

For more than half a century, China has seen North Korea as a dangerous irritant as much as an asset. It might be useful for keeping the United States off guard, and regarded as an essential buffer by the military establishment, but China would happily ditch it if there were a better option.

The North Korean regime has tended to be characterised as uniquely irrational and unpredictable. From its perspective, however, its behaviour makes eminent sense: in fact, its argument for developing a nuclear capability closely echoes the rationale of the great powers. It has no declared intent to launch a first strike, but as long as others have nuclear weapons, North Korea reasons they serve a deterrent function. The regime also argues, as others have, that there are associated benefits with civil nuclear power.  

The long history of North Korea’s nuclear programme follows a recognisable path, previously trodden by Israel, India and Pakistan. It goes from the ambition, formed in the mind of North Korea’s founding dictator, Kim Il-sung, through the long years of a clandestine programme, to the gradual revelation of a reasonably mature, if relatively small, nuclear capability. Signalling is also an element in deterrence. The regime is certainly unpleasant and destabilising, but it is a mistake to imagine that there is no clear purpose and no plan.

The dynasty began life as a Soviet puppet, sandwiched between a powerful USSR and a weak China. But from the start, Kim Il-sung’s muscular nationalism and concern for regime survival suggested that he was unlikely to be a docile dependent of either. His attempt to unify the peninsula by force in 1950 led to a bloody war in which Mao Zedong was obliged to come to his rescue. In the course of that war, “fire and fury” did indeed rain down on North Korea: the US dropped as much ordnance on North Korea as it had during the whole of the Second World War Pacific theatre, including the carpet bombing of Japan. To this day, any building site in Pyongyang is likely to turn up some unexploded ordnance. North Korea was born in a rain of fire, which it has incorporated into its national story.

The regime succeeded in maintaining relations with both its patrons through the dramas and tensions of the Sino-Soviet split to the end of the Cold War. But as Kim Il-sung contemplated the future survival of his regime, he concluded that a nuclear programme was essential insurance, both against his major enemies (the US and South Korea) and any territorial ambitions or excessive demands from China or Russia.

China was and remains North Korea’s major ally, but that does not make North Korea obedient. Their bilateral history is a story of growing defiance and increasing alienation: Kim Il-sung ignored Mao Zedong’s attempt to dissuade him from naming his eldest son, Kim Jong-il, as his successor. He had visited Beijing once a year and had promised that his son would follow suit, but Kim Jong-il only visited Deng Xiaoping’s China once, in 1983. His next visit came three years after Deng’s death, a death for which Kim had offered no formal condolences, as even the most minimal protocol required. 

On that visit, Kim heard the unwelcome news that China, already closer to the United States than he would have wished, was to open relations with his bitter rival, South Korea. When the third dynastic leader, the young Kim Jong-un, took power in 2011, relations with China slid further. Tellingly, Kim Jong-un has not visited Beijing at all, nor has China’s leader, President Xi Jinping, visited Pyongyang, although he has held four summit meetings with South Korea.

Kim Jong-un has made his defiance publicly evident. Not only has he chosen to test his missiles and weapons, but he has selected such highly sensitive moments as last year’s G20 summit in Hangzhou to do so.

China is propping up North Korea’s economy, but it seems to get little influence in return, and the value of the relationship has long been openly questioned by China’s foreign policy analysts. China has had little success in encouraging the regime to loosen controls on the economy and make limited market reforms.

 In the current crisis, China has consistently urged restraint, while co-operating with the tightening of UN sanctions. Beijing’s attitude, however, remains ambivalent: it doubts that sanctions will be effective, and is highly sensitive to US suggestions that Chinese companies that breach sanctions would be subject to punitive measures.  For China, the dangers of bringing North Korea to the edge of collapse are greater than the difficulties of seeking another solution.

Today, North Korea’s relations with Russia are warmer than those with Beijing and if President Trump is serious in his search for someone to solve his North Korea problem for him, he could do worse than to call his friend Mr Putin. No doubt there would be a price, but perhaps Trump would have less difficulty in appeasing Russia than in making concessions to Kim Jong-un. 

In July this year, China and Russia put forward a proposal that both sides should make concessions. North Korea would suspend its nuclear and its missile testing in return for a suspension of South Korea’s annual military exercises with the United States. Buried in the joint statement was the assertion that third parties should not negatively affect the interests of other countries.

Both China and Russia aim to reduce US influence in Asia, an ambition greatly aided to date by Trump’s withdrawal from the Trans-Pacific Partnership trade agreement, conceived as a vehicle of US influence; his treatment of long-standing US allies; and his decision to withdraw the US from the Paris agreement on climate change.

Today the US seems poised between demanding that China solve the North Korea problem and beginning a trade war with Beijing. China’s challenge on the Korean peninsula, always difficult, has grown even greater.

Isabel Hilton is the CEO of the China Dialogue Trust

This article first appeared in the 17 August 2017 issue of the New Statesman, Trump goes nuclear