It's about issues not personalities. Photo: Getty Images
Show Hide image

The Labour leadership race has been obsessed with personalities. Here's what it really needs

Rather than focussing on the faces at the top, Labour needs to think about what's going on underneath the surface, says Michael Meacher.

So far the Labour leadership contest has been depressingly far too much about personalities and far too little about the fundamental issues the country now faces and how a potential new leader would handle them.   That narrative must start with the economy since that is the central issue that decided the election.

Too many voters were left fearful of entrusting the nation’s finances to Labour which an incessant Tory barrage,  never challenged or refuted, told them had caused the economic collapse in the first place, as though the bankers and the international recession had nothing to do with it.   The truth is that the Blair-Brown governments in their 11 years 1997-2007 never ran a budget deficit higher than 3.3% of GDP (roughly the same level as Germany’s) whilst the Thatcher-Major governments ran up deficits larger than this in 10 out of their 18 years.   Setting the record straight, and getting it understood, is key to enabling the rest of the narrative to be listened to.

The central economic issue for the next 5 years is the continuation of austerity.   That raises two predominant questions.   Is it achieving what it is meant to do – to eliminate the deficit?    Is it still necessary, and if not, what is the alternative?

There are two ways to cut a deficit, either by restricting expenditure or by increasing income.   Osborne chose the former, with limited success.   Alistair Darling, the last Labour chancellor, after two expansionary budgets in 2009-10 reduced the deficit from its peak at £157bn to £118bn by 2011, a cut of nearly £20bn a year.   George Osborne’s austerity budgets reduced it to its current level of £92bn, a cut of just £7bn a year.   Moreover Osborne, despite such a modest pace of reduction after causing so much pain, has now declared he intends to clear the deficit by 2017-8, a cut of some £25bn a year.   That is simply not credible.   He promised in 2010 he would eliminate the deficit by 2015; now he’s saying he will do so by 2018 – he’s achieving form with his fantasy projections.

If then austerity has achieved so little at the cost of so much detriment, is it still necessary?   The much better alternative is the proven approach taken by Darling and also by the US in their recovery from recession using public investment to kickstart the economy into genuinely sustainable growth – not the fragile version we have now – and thus promote real jobs, increase household incomes, raise government tax receipts, and so pay down the deficit much faster.   Investment should be focused on the key current priorities – house-building, infrastructure in energy, transport and IT, and laying the foundations for a low-carbon economy.

It can be paid for by borrowing since with interest rates on the floor at 0.5% a £30bn package of investment would cost only £150m a year and it would cause no alarm in the markets which are desperate for growth at any cost.   Better still, however, it could be funded at no increase in public borrowing at all either by requiring the publicly owned banks to prioritise lending to British industry rather than foreign speculation, or by a further modest tranche of quantitative easing, or by taxing the extremely rich, those with incomes over £3,000 a week, and by a relentless crackdown with new regulations against tax avoidance.

In providing this alternative scenario for sustainable growth, Labour should blow away the myth of a great Tory economic recovery.   It is anything but.   It is the slowest and weakest recovery for a century, wages are still nearly 8% below pre-crash levels, productivity on which future living standards depend is flat, private investment is anaemic, the trade deficit on manufactured goods is the worst in British history, unemployment is still nearly 2 million, and household debt is tipping £2 trillions.   None of that is mentioned by the Tories.   What alone they proclaim is growth and jobs.   Both repay unpacking.  Osborne’s austerity flattened growth through to 2012, but then by easing some of the cuts plus ultra-loose monetary policy he triggered a spurt of growth from the start of 2013 till mid-2014, after which it has sagged badly.   From 0.9% growth in the 3rd quarter of last year it has now fallen two-thirds to 0.3% in the 1st quarter of this year.   More a temporary uptick than a genuine recovery.      As for jobs, the 2 million increase in private sector employment is certainly welcome, but as surveys have repeatedly shown two-thirds of the jobs are self-employment on a pittance income and most of the rest are insecure, low-paid and up to a million on zero hours contracts.   Moreover surveys have found that 11 out of 12 new jobs have been confined to London and the south-east, and half have gone to migrant labour.   Not quite the picture of a rounded, well-paid recovery.

Third, Labour should be making the case for a major revival in high-tech manufacturing and services since there is no other way to pay our way in the world and reverse an unsustainable trade deficit of over £100bn a year.   The present recovery, such as it is, is far too lopsided in favour of finance against industry and focused too much on the south against dereliction in the north.   It requires a 10-15 year programme of rebalancing the economy and must entail much more reliable funding, far greater emphasis on skill-training and apprenticeships, rebuilding the crucial supply chains broken by the privatisations and sell-offs of the 1980s, safeguarding key strategic sectors and companies from foreign takeovers, and much stronger support for R&D and innovation.   This is the only way back to full employment and rising living standards.   It is also the means to ease immigration pressures through a big increase in building houses, schools and health facilities whilst at the same time lifting the artificial ceiling on access to the UK for tier-one high-tech specialist workers that the CBI is so worried about.

Lastly, as many are now asserting, Labour does need to present the electorate with a programme designed to incentivise aspiration at all levels of society.   But it also needs to be recognised that that this can only become a reality, as opposed to empty rhetoric, if there are radical changes made in today’s dysfunctional structure of opportunity which polarises the low-paid, badly housed, poorly educated and seriously disadvantaged from the well-endowed, well-off, and well-connected.   It equally requires a new relationship between the State and the private sector which stresses, not their ideological antagonism, but their mutual inter-dependence.   Private markets should be enthusiastically supported where they work well, but reformed or replaced where they are clearly failing as currently in housing, energy, rail and banking.

Photo: Getty Images
Show Hide image

I'm far from convinced by Cameron's plans for Syria

The Prime Minister has a plan for when the bombs drop. But what about after?

In the House of Commons today, the Prime Minister set out a powerful case for Britain to join air strikes against Isil in Syria.  Isil, he argued, poses a direct threat to Britain and its people, and Britain should not be in the business of “outsourcing our security to our allies”. And while he conceded that further airstrikes alone would not be sufficient to beat Isil, he made the case for an “Isil first” strategy – attacking Isil now, while continuing to do what we can diplomatically to help secure a lasting settlement for Syria in which Assad (eventually) plays no part.

I agreed with much of David Cameron’s analysis. And no-one should doubt either the murderous barbarism of Isil in the region, or the barbarism they foment and inspire in others across the world.  But at the end of his lengthy Q&A session with MPs, I remained unconvinced that UK involvement in airstrikes in Syria was the right option. Because the case for action has to be a case for action that has a chance of succeeding.  And David Cameron’s case contained neither a plan for winning the war, nor a plan for winning the peace.

The Prime Minister, along with military experts and analysts across the world, concedes that air strikes alone will not defeat Isil, and that (as in Iraq) ground forces are essential if we want to rid Syria of Isil. But what is the plan to assemble these ground forces so necessary for a successful mission?  David Cameron’s answer today was more a hope than a plan. He referred to “70,000 Syrian opposition fighters - principally the Free Syrian Army (FSA) – with whom we can co-ordinate attacks on Isil”.

But it is an illusion to think that these fighters can provide the ground forces needed to complement aerial bombardment of Isil.  Many commentators have begun to doubt whether the FSA continues to exist as a coherent operational entity over the past few months. Coralling the myriad rebel groups into a disciplined force capable of fighting and occupying Isil territory is a heroic ambition, not a plan. And previous efforts to mobilize the rebels against Isil have been utter failures. Last month the Americans abandoned a $500m programme to train and turn 5,400 rebel fighters into a disciplined force to fight Isil. They succeeded in training just 60 fighters. And there have been incidents of American-trained fighters giving some of their US-provided equipment to the Nusra Front, an affiliate of Al Qaeda.

Why has it proven so hard to co-opt rebel forces in the fight against Isil? Because most of the various rebel groups are fighting a war against Assad, not against Isil.  Syria’s civil war is gruesome and complex, but it is fundamentally a Civil War between Assad’s forces and a variety of opponents of Assad’s regime. It would be a mistake for Britain to base a case for military action against Isil on the hope that thousands of disparate rebel forces can be persuaded to change their enemy – especially when the evidence so far is that they won’t.

This is a plan for military action that, at present, looks highly unlikely to succeed.  But what of the plan for peace? David Cameron today argued for the separation of the immediate task at hand - to strike against Isil in Syria – from the longer-term ambition of achieving a settlement in Syria and removing Assad.  But for Isil to be beaten, the two cannot be separated. Because it is only by making progress in developing a credible and internationally-backed plan for a post-Assad Syria that we will persuade Syrian Sunnis that fighting Isil will not end up helping Assad win the Civil War.  If we want not only to rely on rebel Sunnis to provide ground troops against Isil, but also provide stable governance in Isil-occupied areas when the bombing stops, progress on a settlement to Syria’s Civil War is more not less urgent.  Without it, the reluctance of Syrian Sunnis to think that our fight is their fight will undermine the chances of military efforts to beat Isil and bring basic order to the regions they control. 

This points us towards doubling down on the progress that has already been made in Vienna: working with the USA, France, Syria’s neighbours and the Gulf states, as well as Russia and Iran. We need not just a combined approach to ending the conflict, but the prospect of a post-war Syria that offers a place for those whose cooperation we seek to defeat Isil. No doubt this will strike some as insufficient in the face of the horrors perpetrated by Isil. But I fear that if we want not just to take action against Isil but to defeat them and prevent their return, it offers a better chance of succeeding than David Cameron’s proposal today. 

Stewart Wood is a former Shadow Cabinet minister and adviser to Ed Miliband. He tweets as @StewartWood.