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21 September 2020

Labour’s new message? It’s tougher than the Tories on public spending

Shadow chancellor Anneliese Dodds wants to outflank the Conservatives as the party of economic responsibility.

By Ailbhe Rea

The Labour party has a new economic pitch: it is now the party of financial responsibility.

This morning, in her keynote address to Labour Connected, the virtual Labour party conference, the shadow chancellor Anneliese Dodds set out her stall, and drew a dramatic line under the economic pitch of the Corbyn era.

Gone are the days of the Corbyn/McDonnell radical economic agenda, which boasted individually popular policies but struggled badly against perceptions of unaffordability and irresponsibility. The shadow chancellor has hailed a new era of economic messaging from the Labour Party, with a striking claim: that Labour will outflank the Conservatives when it comes to responsible management of public finances. 

“As Chancellor, I would ensure that public money was always spent wisely,” Dodds told the conference. “Targeted where it’s needed most. Not splurged where it isn’t.” She weaved a theme of financial mismanagement by the Conservatives in their handling of the pandemic into her speech, highlighting failed contracts and government schemes. She listed “£130m to a Conservative donor for testing kits that were unsafe” and “£150m for facemasks that couldn’t be used by NHS staff”. There was also over £2.6bn to be handed over in so-called job retention bonuses, to businesses who were going to bring staff back to work anyway. Outsourced contract after outsourced contract which has simply failed to deliver.

She was also careful to pitch Labour as the party of small business, noting her father’s background as a small business owner, an accountant who viewed his staff as “more like friends than employees”, putting herself in the shoes of these employers as they face the prospect of laying off staff.

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“Public spending must help us climb out of [the economic crisis], supporting the jobs of the future in the process,” the shadow chancellor said. “A responsible approach to the national finances. Because you’re only as cavalier with public money as our current Chancellor, if you don’t know the value of it. We in Labour know that if you are responsible with public money, it can transform lives.”

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It was a tricky tightrope to walk: emphasising a new message of financial responsibility, very clearly pitched to address concerns from the last election that Labour couldn’t be trusted with the economy, while promoting an alternative economic programme that would invest in skills and training and provide targeted wage support during the crisis, and showing that Labour is tuned into the suffering of the millions who have and will lose their jobs as a result of the pandemic.

The Labour team will hope that today’s speech outlines an alternative, more responsible, more compassionate, and more genuinely effective economic programme to meet the country’s needs in an unprecedented crisis. But the headline message – that the government has been “too cavalier” with public spending  may resonate as a backhanded compliment to those who don’t hear the full detail of the speech. Indeed, it risks sounding as if Labour is accusing the government of being too generous, which not only reinforces pre-existing goodwill towards Rishi Sunak, as the architect of Eat Out to Help Out, but also alienates some Labour members who might bristle at what they see as playing the Conservatives at their own game.

The bottom line of Anneliese Dodds’s conference speech was to criticise what she called “the language of restraint” from the government, amid talk of tax hikes and deep spending cuts. But Labour itself has adopted some of the rhetoric, if not the policies, of restraint. It is a more sophisticated line of attack than simply calling on the government to spend ad infinitum, the trap that is so obviously laid by a crisis like this one, and it addresses some of the longstanding public perceptions that are blocking Labour from power. But it is a tricky new message to promote, and one with clear risks and scope for misunderstanding.