Osborne thinks budget discipline is Labour's biggest weakness. He's not wrong

Both Miliband and Balls know they need to do more if people are going to be persuaded to put them in charge of public money.

There isn’t much doubt which side enjoyed the Autumn Statement more in the Commons chamber. Tory MPs wore gleeful looks that showed they thought the Chancellor had planted his ball firmly in the back of Ed Balls’s net. They cheered with terrace gusto. Labour MPs looked solemn and attentive. Perhaps their expressions were meant to project scorn and disbelief at what George Osborne was saying. They could also be interpreted as masks of defeat.

The mood imbalance was, to an extent, inevitable. The focus of the Autumn Statement was things the Chancellor wants to talk about and things Labour says are missing the point. Osborne boasts that the economy is growing lustily. Labour asserts that people aren’t feeling it in the marginals. Osborne declares that his plan for fiscal prudence has delivered the stability from which future prosperity will flourish. Balls says Osborne’s plan has left voters feeling out of pocket.

The Tories think they have won the biggest argument of the parliament – the question of who was to blame for the economic mess and who is best qualified to clear it up. Labour think, or at least hope, that there is a bigger argument about who the economy serves, who can be trusted to look after ordinary people, and that the Tories are ill-equipped to meet that challenge.

The problem for Labour today was that Osborne got to set the terms of the debate, so Balls arguing vigorously in the debate he would rather be having sounded close to a capitulation. When he accused the Chancellor of being in denial, the charge ricocheted back in his face. The Tories guffawed merrily. The Labour leadership – both Eds – remain confident of having the last laugh, to the extent that the macroeconomic indicators fuelling Conservative levity conceal real pain that will cost the government votes. The economy that Tory MPs were cheering is on paper; the one Labour’s cost of living campaign focuses on is in winnable constituencies. That’s the theory, at least.

But what today also demonstrated is that Osborne believes Labour’s reputation for overspending is terminally toxic. One of the Chancellor’s favourite gambits is engineering parliamentary debates exclusively to force Labour MPs to vote against something that most voters think is sensible. This device has been deployed with some effect over welfare reform, challenging the opposition to advertise their squeamishness about benefit cuts, which they duly did.

Today, Osborne gave advance notice of the next trick he will pull from the same box. He intends to put a "Charter For Budget Responsibility" before parliament next autumn, reaffirming the coalition parties’ determination to press ahead with the current trajectory of deficit reduction. The tactical logic behind this move is clear. It means that, six months before a general election, Labour will have to choose between endorsing the government’s economic policy (which they won’t do) and voting against prudent budgeting (which they will insist is a principle they cherish).

The standard Labour line in response to these Osborne stunts is to denounce them as cynical game-playing, unworthy of indulgence by a serious opposition whose eyes are fixed on the higher prize of transforming Britain’s economy and society for the better. Etc.

For nervous Labour MPs that can sound rather like a declaration of intent to walk straight into the trap, although Ed Miliband probably has more leeway with his own side now than he did a year or two ago. Since the party’s successful conference – and the energy price freeze pledge that disoriented the Tories for weeks – there is more patience in the parliamentary Labour party for Miliband’s insistence on doing things "in his own time, on his own terms."

Still, after today, I suspect there will be increased pressure for one of those things to be a clearer line on long-term fiscal policy. Both Eds have said repeatedly in speeches and interviews that they recognise the spending constraints under which a future Labour government would operate. Osborne clearly thinks that message hasn’t reached the public and that he can continue pummelling Labour as the party that opposes every cut, while plotting to raise taxes, borrow and spend like Topsy.

Privately, senior Labour figures concede that this is a weakness. Both Eds know they need to do more if people are going to be persuaded to put them in charge of public money. There is, behind the scenes, a rolling discussion about the kind of measures and policies that will help Labour "cut through" with its determination to be prudent. The lesson that Miliband has learned from the energy price freeze is that voters don’t listen to vague declarations of intent. Many actively avoid anything the sounds like politics. So to get their attention, you need something big, bold, easy to understand and unignorable.

There are many on the Labour side who would like to get through a campaign without having to apply that logic to the delicate matter of budget discipline. Perhaps it can be avoided. The Eds may be right that a cost of living crisis will soon wipe the grins from Tory faces and that Osborne’s attempt to force the debate back to his preferred terms, while effective in the Commons today, will have diminishing returns over time. But the looks of unease on the Labour benches today suggest the party is still uncomfortable when the conversation turns to balancing the books. That is a weakness of which Balls will be well aware. I imagine the shadow Chancellor will be marching some sacred spending cow to the slaughter before polling day. 

Ed Miliband and Ed Balls at the Labour conference in Manchester in 2012. Photograph: Getty Images.

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

Photo: Getty Images
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What's to be done about racial inequality?

David Cameron's words on equal opportunities are to be welcomed - now for some action, says Sunder Katwala.

David Cameron made the strongest, clearest and most high profile statement about ethnic inequalities and the need to tackle discrimination ever yet offered by a British Prime Minister in his leader’s speech to the Conservative Party conference in Manchester.
“Picture this. You’ve graduated with a good degree. You send out your CV far and wide. But you get rejection after rejection. What’s wrong? It’s not the qualifications or the previous experience. It’s just two words at the top: first name, surname. Do you know that in our country today: even if they have exactly the same qualifications, people with white-sounding names are nearly twice as likely to get call backs for jobs than people with ethnic-sounding names? … That, in 21st century Britain, is disgraceful. We can talk all we want about opportunity, but it’s meaningless unless people are really judged equally”, said Cameron.
While the proof of the pudding will be in the eating, this was a powerfully argued Prime Ministerial intervention – and a particularly well-timed one, for three reasons.

Firstly, the Prime Minister was able to root his case in an all-but-universally accepted appeal for equal opportunities. It will always prove more difficult in practice to put political energy and resources behind efforts to remedy discrimination against a minority of the population unless a convincing fairness case is made that values cherished across our whole society are at stake. Cameron’s argument, that any party which tells itself that it is the party of the ‘fair chance’ and ‘the equal shot’ must have a response when there is such clear evidence of discrimination, should prove persuasive to a Conservative Party that has not seen race inequalities as its natural territory. Cameron argued that the same principles should animate responses to discrimination when it comes to race, gender and social class. Put like that, wanting job interviews to be fair – by eradicating conscious and unconscious patterns of bias wherever possible – would strike most Britons as offering as clear a case of the values of fair play as wanting the best baker to win the Great British Bake-Off on television.
Secondly, Cameron’s intervention comes at a potential "tipping point" moment for fair opportunities across ethnic groups. Traditionally, ethnic discrimination has been discussed primarily through the lens of its impact on the most marginalised. Certainly, persistent gaps in the criminal justice system, mental health provision and unemployment rates remain stark for some minority groups. What has been less noticed is the emergence of a much more complex pattern of opportunity and disadvantage – not least as a consequence of significant ethnic minority progress.

Most strikingly of all, in educational outcomes, historic attainment gaps between ethnic minorities and their white British peers have disappeared over the last decade. In the aggregate, ethnic minorities get better GCSE results on average. Ethnic minority Britons are more likely, not less likely, to be university graduates than their fellow citizens. 

As a result of that progress, Cameron’s intervention comes at a moment of significant potential – but significant risk too. Britain’s ethnic minorities are the youngest and fastest-growing sections of British society. If that educational progress translates into economic success, it will make a significant contribution to the "Great British Take-Off" that the Prime Minister envisions. But if that does not happen, with educational convergence combined with current ‘ethnic penalties’ in employment and income persisting, then that potential could well curdle into frustration that the British promise of equal opportunities is not being kept.  Cameron also mirrored his own language in committing himself to both a ‘fight against extremism’ and a ‘fight against discrimination’: while those are distinct challenges and causes, actively pursuing both tracks simultaneously has the potential, at least, depolarise some debates about responses to extremism  - and so to help deepen the broad social coalitions we need for a more cohesive society too.

Thirdly, Cameron’s challenge could mark an important deepening in the political competition between the major parties on race issues. Many have been struck by the increase in political attention on the centre-right to race issues over the last five to ten years. The focus has been on the politics of representation. By increasing the number of non-white Conservative MPs from two to seventeen since 2005, Cameron has sent a powerful signal that Labour’s traditional claim to be ‘the party of ethnic minorities’ would now be contested. Cameron was again able to celebrate in Manchester several ways in which his Cabinet and Parliamentary benches demonstrate many successful journeys of migrant and minority integration in British society. That might perhaps help to ease the fears, about integration being impossible in an era of higher immigration, which the Home Secretary had articulated the previous day.

So symbolism can matter. But facial diversity is not enough. The politics of ethnic minority opportunity needs to be about more than visits to gurdwaras, diversity nights at the party conference fringes and unveiling statues of Mahatma Gandhi in Parliament Square. Jeremy Corbyn’s first speech as Labour leader did include one brief celebratory reference to Britain’s ethnic diversity – “as I travelled the country during the leadership campaign it was wonderful to see the diversity of all the people in our country” – and to Labour bringing in more black, Asian and ethnic minority members - but it did not include any substantial content on discrimination. Tim Farron acknowledged during his leadership campaign that the Liberal Democrats have struggled to get to the starting-line on race and diversity at all. The opposition parties too will no doubt now be challenged to match not just the Prime Minister’s rhetorical commitment to challenging inequalities but also to propose how it could be done in practice.

Non-white Britons expect substance, not just symbolism from all of the parties on race inequalites.  Survation’s large survey of ethnic minority voters for British Future showed the Conservatives winning more ethnic minority support than ever before – but just 29 per cent of non-white respondents were confident that the Conservatives are committed to treating people of every ethnic background equally, while 54 per cent said this of Labour. Respondents were twice as likely to say that the Conservatives needto do more to reach out – and the Prime Minister would seem to be committed to showing that he has got that message.  Moreover, there is evidence that ethnic inclusion could be important in broadening a party’s appeal to other younger, urban and more liberal white voters too – which is why it made sense for this issue to form part of a broader attempt by David Cameron to colonise the broad centre of British politics in his Manchester speech.

But the case for caution is that there has been limited policy attention to ethnic inequalities under the last two governments. Restaurateur Iqbal Wahhab decided to give up his role chairing an ethnic minority taskforce for successive governments, unconvinced there was a political commitment to do much more than convene a talking shop. Lib Dem equalities minister Lynne Featherstone did push the CV discrimination issue – but many Conservatives were sceptical. Cameron’s new commitment may face similar challenges from those whose instinct is to worry that more attention to discrimination or bias in the jobs market will mean more red tape for business.

Labour had a separate race inequalities manifesto in 2015, outside of its main election manifesto, while the Conservative manifesto did not contain significant commitments to racial inequality. The mid-campaign launch in Croydon of a series of race equality pledges showed an increasing awareness of the growing importance of ethnic minority votes - though the fact that they all involved aiming for increases of 20 per cent by 2020 gave them a slightly back-of-the-envelope feel. 

Prime Ministerial commitments have an important agenda-setting function. A generation ago the Stephen Lawrence case opened the eyes of middle England to racist violence and police failures, particularly through the Daily Mail’s persistent challenging of those injustices. A Conservative Prime Minister’s words could similarly make a big difference in the mainstreaming of the issue of inequalities of opportunity. What action should follow words? Between now and next year’s party conference season, that must will now be the test for this Conservative government – and for their political opponents too. 

Sunder Katwala is director of British Future and former general secretary of the Fabian Society.