To have a clear line on the economy, Miliband needs a line on the unions

Labour policy formation is one long seminar that skirts around an obvious obstacle to reform.

It is good news that unemployment has fallen again. The government will be pleased; Labour will counsel caution. It is too early to identify a trend in employment growth. Inflation was up yesterday, so the decline in real wages and the squeeze on low-income households continues. The Bank of England has downgraded its growth forecast for 2013. Only around 20 per cent of the cuts originally envisaged in George Osborne’s "Plan A" have been implemented so far and a whole new set of cuts will be announced in the Autumn Statement on 5 December. There are always reasons not to be cheerful.

But that is a substantial part of Labour’s problem when it comes to the economy. It has become tactically reliant on gloom, even when Ed Miliband insists his strategic vision – the "One Nation" proposition – is inspiring and optimistic.

A hazard for the Tories, as I’ve noted before, is that the economy will appear to recover a bit on paper, in a way that emboldens ministers to tell people they are better off and that the plan is working, but without the public experiencing a tangible improvement in their circumstances. Wage stagnation makes it quite likely many people will feel poorer in 2015 than they did when the coalition came to power. The Chancellor or Prime Minister insisting voters are better off than they know – because, for example, the long-term prospects for fiscal sustainability are mildly improved - will just reinforce the sense that Conservatives dwell on a different, more expensively furnished planet.   

For Labour to capitalise on that weakness they need to meet certain tests. They need to demonstrate that they understand that public money doesn’t grow on Treasury trees; that it comes from real people’s pockets. Even if the pooling of that resource for good social ends is a desirable political project, consent for that harvest can’t be taken for granted. Crucially, the mechanism for allocating those funds cannot be seen as wasteful or self-serving.

In other words, Labour needs to sound assertive in its ambitions to reform the state. (That isn’t the same thing as shrinking the state, but it probably requires some recognition that the urge to expand the state as the default answer to social problems looks implausible in the current climate.)

There has been a whole lot of discussion in this area recently. See this from earlier in the week, via the IPPR, and screeds on Labour List, guest edited this week by Jon Cruddas.  Reinforcing the urgency of the whole conversation is this report from the RSA and the SMF.

An essential, albeit quite technical observation from that analysis is that falling unemployment suggests that the "output gap" – the gulf between the economy’s current performance and its potential – is smaller than the Treasury has estimated. Crudely speaking, that suggests the portion of the deficit that won’t be simply burnt off by a return to growth is higher – it is structurally baked in harder than previously thought. On top of that are all sorts of bleak accounts of the mounting demographic pressures on society – the hard, upward pressure on health spending and pensions in particular.

One political conclusion from all this is that Labour should speak more openly and frankly about the scale of the fiscal challenge ahead and the requirement that public service delivery change in response. That has to be the safer option than the current trajectory, which is to concede in the vaguest possible terms that budget discipline is a recognised yet distasteful obligation without really engaging in the conversation about how it will be enacted.

In a perverse way, the difficulties presented by the long-term outlook give cover to Labour to move on from the necessarily short-term and abstract macroeconomic argument it has been engaged in for the past two years. It is entirely possible that Ed Balls has been right about the need for fiscal stimulus and also that no-one cares. The non-existent growth we might have had if different policies had been pursued in 2010 can’t be presented on the doorstep as a reason to vote Labour in 2015.

The Tories have a very different problem. No-one doubts their determination to make cuts, but their underlying motive and, increasingly, their competence in administering austerity are in doubt. The Conservatives have to tread carefully when it comes to advertising their intention to reform the state, because for many people that sounds like a euphemism for indiscriminate privatisation and public sector redundancies. That suspicion, expressed in opinion polls and focus groups, was a significant factor in decisions last year to scale down ambitious plans to reconfigure vast swathes of the public sector – with much more outsourcing to private companies – under a "Big Society" rubric. Such caution was a source of frustration to Steve Hilton, David Cameron’s strategic advisor, and a factor leading to his departure from Downing Street. Without Hilton the impetus for dramatic, visionary reform of the state has largely gone. The Tories' difficulties in persuading people they are reliable stewards of services will be exacerbated as budget pressure and a disorderly restructuring wreak havoc in the NHS.

There is an opportunity there for Labour, presuming Ed Miliband has the courage to seize it. Voters know that Labour cares about the public sector. Of course it does. Miliband could use that confidence as a cudgel to beat the coalition, accusing them of senseless vandalism. He could also use it as a platform to win support for what would be advertised as a fairer, more compassionate approach to reform  - one that is conducted with deference to the ethos of public service, without a fetishistic faith in private enterprise but in recognition of the fiscal challenge ahead.

In so doing he could kill the Tory charge that Labour are in denial about the deficit and national debt. Instead of saying, in abstract terms, that a Miliband government would take tough decisions, the opposition leader should talk up exciting ideas for innovation in the way services are delivered. He needs to find dynamic charities and social enterprises and go on about how their creativity shows the way forward. The very fact of advertising an interest in better, more efficient, more effective ways to get the kinds of outcomes Labour has traditionally relied on Whitehall to deliver contains in it the recognition of the need to get more for less out of public services. It swallows up the deficit denial charge whole without even having to rebut it directly.

There is an obvious obstacle to this path: trade union leaders won’t like it. Once you start talking about alternative mechanisms for delivering services, there will be people in the labour movement who smell Blairite conspiracy and crypto-Toryism under the bed. That will be the case even if Miliband goes out of his way to emphasise that reform will be conducted wholly in keeping with the traditional values of fairness and equality that have historically animated the left.

Senior figures around Miliband privately concede that this is a problem. They know that moving the party’s economic story beyond outraged rejection of the decisions George Osborne is making will require some account of public sector reform. They also know that the broad "One Nation" vision is hard to turn into a practical agenda for changing the way the state and the economy are organised without also having an agenda for the way labour is organised. As one shadow cabinet friend of Miliband puts it: "Before the election we’ll need a positive story about the role of unions in responsible capitalism." The Labour leader knows that story needs writing, but there never seems to be a good time to sit down and write it.   

Miliband’s cheerleaders on Labour blogs and in think tanks and seminars are the same – long on paradigms and re-imaginings of the role of government, short on specific reference to the unions. That will have to change before the party can draft a manifesto. Ideally, the unions themselves could start talking seriously and practically about imaginative ways to innovate in the provision of public services. They should do. They probably won’t. 

Ed Miliband addresses TUC members in Hyde Park last month after an anti-austerity march. Photograph: Getty Images.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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Daniel Hannan harks back to the days of empire - the Angevin Empire

Did the benign rule of some 12th century English kings make western France vote Macron over Le Pen?

I know a fair amount about British politics; I know a passable amount about American politics, too. But, as with so many of my fellow Britons, in the world beyond that, I’m lost.

So how are we, the monolingual Anglophone opinionators of the world, meant to interpret a presidential election in a country where everyone is rude enough to conduct all their politics in French?

Luckily, here’s Daniel Hannan to help us:

I suppose we always knew Dan still got a bit misty eyed at the notion of the empire. I just always thought it was the British Empire, not the Angevin one, that tugged his heartstrings so.

So what exactly are we to make of this po-faced, historically illiterate, geographically illiterate, quite fantastically stupid, most Hannan-y Hannan tweet of all time?

One possibility is that this was meant as a serious observation. Dan is genuinely saying that the parts of western France ruled by Henry II and sons in the 12th century – Brittany, Normandy, Anjou, Poitou, Aquitaine – remain more moderate than those to the east, which were never graced with the touch of English greatness. This, he is suggesting, is why they generally voted for Emmanuel Macron over Marine Le Pen.

There are a number of problems with this theory. The first is that it’s bollocks. Western France was never part of England – it remained, indeed, a part of a weakened kingdom of France. In some ways it would be more accurate to say that what really happened in 1154 was that some mid-ranking French nobles happened to inherit the English Crown.

Even if you buy the idea that England is the source of all ancient liberties (no), western France is unlikely to share its political culture, because it was never a part of the same polity: the two lands just happened to share a landlord for a while.

As it happens, they didn’t even share it for very long. By 1215, Henry’s youngest son John had done a pretty good job of losing all his territories in France, so that was the end of the Angevins. The English crown reconquered  various bits of France over the next couple of centuries, but, as you may have noticed, it hasn’t been much of a force there for some time now.

At any rate: while I know very little of French politics, I’m going to go out on a limb and guess the similarities between yesterday's electoral map and the Angevin Empire were a coincidence. I'm fairly confident that there have been other factors which have probably done more to shape the French political map than a personal empire that survived for the length of one not particularly long human life time 800 years ago. Some wars. Industrialisation. The odd revolution. You know the sort of thing.

If Daniel Hannan sucks at history, though, he also sucks at geography, since chunks of territory which owed fealty to the English crown actually voted Le Pen. These include western Normandy; they also include Calais, which remained English territory for much longer than any other part of France. This seems rather to knacker Hannan’s thesis.

So: that’s one possibility, that all this was an attempt to make serious point; but, Hannan being Hannan, it just happened to be a quite fantastically stupid one.

The other possibility is that he’s taking the piss. It’s genuinely difficult to know.

Either way, he instantly deleted the tweet. Because he realised we didn’t get the joke? Because he got two words the wrong way round? Because he realised he didn’t know where Calais was?

We’ll never know for sure. I’d ask him but, y’know, blocked.

UPDATE: Breaking news from the frontline of the internet: 

It. Was. A. Joke.

My god. He jokes. He makes light. He has a sense of fun.

This changes everything. I need to rethink my entire world view. What if... what if I've been wrong, all this time? What if Daniel Hannan is in fact one of the great, unappreciated comic voices of our time? What if I'm simply not in on the joke?

What if... what if Brexit is actually... good?

Daniel, if you're reading this – and let's be honest, you are definitely reading this – I am so sorry. I've been misunderstanding you all this time.

I owe you a pint (568.26 millilitres).

Serious offer, by the way.

 

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Daniel Hannan. You can find him on Twitter or Facebook.

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