What Next? How to Park Labour’s Tanks on the Tories’ Lawn.
Labour held the line against the odds, and that makes them mighty. Now for the counterattack.
Firstly, let me do some book-eating and talk about what I got wrong.
I had this in the Guardian back in March. In it I said that Labour had good policies that they weren’t talking about, and that this would be a big issue. Well, give me the ketchup, because fuck me was I wrong.
Almost as soon as I wrote it, they came out with a bunch of good, popular policies that had people arguing that feeding kids was bad and workers don’t want wages anyway. They took control of the news cycle on policy even before the election was announced.
And then, that manifesto. What a stormer. Not everything in it was what I’d want, but politically it seemed to be perfectly pitched, especially up against the Tory manifesto that seemed tailored towards kicking their base in the teeth.
Even so, I was worried it wouldn’t work. I turned my data off at 9:55 on election night sick to my stomach, thinking we’d be lucky to lose 30 seats. Not because I didn’t believe in the manifesto, but because the gains to be made were so huge. The entire establishment was apoplectic with rage at the very thought that people might choose Corbyn over May, the papers screaming so loudly you could see the spittle flecks on the page, and the Labour vote was still historically low. I wanted to be wrong, but couldn’t get my hopes up. I wasn’t daring to dream that high.
Well, as it happens, Labour got almost 13M people to show up in spite of everything the Tories and their tame press threw at them. No, not enough for a majority, but within a fighting chance.
Those who say “yeah but we didn’t win” can jog on. This was supposed to be the decisive, crushing victory over the Left, the repudiation of the idea that anything other than milquetoast centrism had any electoral legs. They were under fire from all sides, pinned down, facing a vastly more powerful opponent with vastly more resources. And yet when the smoke cleared in the morning, they had not only survived, but gained some ground and sent the invaders home with a bloody nose.
To say it’s not a victory is to reduce a war down to one battle. Holding the line, making your enemy spend themselves against your armies, and turning their advance into a retreat, is absolutely a victory, even if you’re not yet hoisting your flag over the Winter Palace. It’s the kind of result that precedes a rally and a counterattack. It’s middle of act two territory, and it absolutely deserves the celebrations it’s getting in the party.
So how do we march on the palace?
If you will allow me, a humble book-eater, to make some suggestions, here’s what I think.
To my mind, there is an overarching grand narrative to “left vs right” in this country that broadly speaking goes as follows: The left is nice, but their niceness is fuzzy and idealistic and lacks hard headed competence. The right is nasty, but their nastiness is often simply the side effect of making “tough decisions” and running the country smoothly.
Labour fought the Tories to a standstill on their “for the many, not the few” slogan, which worked to shore up the core vote, bring the young on side, and won the people who don’t see the trade-off as worth it. “That’s your GDP, not ours,” is their slogan.
To bring more people onside, the offensive will, in my humble, book-eating view, have to attack the idea of Tory competence. The smoking ruins of the May government is the perfect opening for this kind of move. Even if she goes, the odds-on favourite to replace her is Boris Johnson, whose bumbling clown schtick is a paper-thin veneer over a viciously nasty politician. This would obviously be the wrong play for them, but they may do it anyway. Why? Because the intellectual basis of Toryism is non-existent. It’s a symbolic platform of flag waving and “clap your hands to make the economy go faster” beliefs. It’s for people who think “aspiration” will get you a job because they don’t understand that structural weakness caused by austerity is a much more powerful force than whether you really, truly believe in the wages fairy. It’s for people who think that if you are at a food bank that means something’s going right, who see economic policy as a form of moral filter to keep the undeserving in penury so they can learn their lesson and become more productive citizens. The Tory Party is basically the Party Political Wing of the Just World Fallacy.
This is not a competent party of government, but a deeply broken party founded on shaky foundations who have been allowed to dress up like people who know what they’re on about for far too long. The press and large sections of the Labour party have mistakenly bought into the idea that the Tories willingness to enact intolerable cruelty is down to some sober economic calculus. This is the Mrs Trunchbull strategy. In Dahl’s book Matilda, the headmistress locks the children in a spiked cupboard and throws them through the window. She gets away with it because, in the words of one of the school children, her cruelty is “too ridiculous to be believed.” It’s beyond most of our understanding that people would slash council budgets, throw vulnerable people onto the streets, and sell care homes to asset-strippers without having a good reason for it. It seems laughable that a program of economic vandalism like the Tories’ austerity campaign could be done without a good reason and sound backing.
Yet, this is what has happened. While it may be true that various dogmatic institutions backed austerity after the 2007 crash, there are none left of any note or worth. The evidence is in, and it has been a resounding failure. The Tories can point to “we’ve brought the deficit down” as their sole achievement, but at what cost? They’ve done so only by creating a swollen precariat class, nailing wages to the floor, and swelling the ranks of the truly impoverished so much that the NHS is having to cope with an influx of malnourished people on top of its other troubles.
The unfortunate truth is that many people were confounded by something which sounded right but wasn’t. “The deficit” sounds like a bad thing. Nobody wants a deficit. It’s a very negative sounding word. But the public sector deficit is the counterpart of the private sector surplus — balance sheets have two sides. In order to get the public sector deficit down, we’ve had to move that deficit onto households, who are now taking on more personal and mortgage debt as their expenditures outstrip their incomes. And while interest rates are so close to zero that the government can issue gilts — the mechanism by which it “borrows” money, or rather creates money while absorbing savings — pretty much for free, the interest rates for those who have to take out payday loans and put the gas bill on a credit card are horrendous.
Their constant reiteration of “the magic money tree” during the campaign shows that they either don’t understand the basic economic arguments, or do and lie about it. Controlling the money supply is one of the jobs of government. “Money” is never an issue for governments. The economy is a river, not a pond, and government policies can increase or restrict the flow of money through it.
What matters is where that money goes. But money is only a means to an end. We need to stop conflating “money” with “real resources.” The government has a theoretically infinite supply of “money,” that’s not the issue. It is restricted by the availability of concrete, steel, skills, labour, land, CPUs, guns and butter, and all the other things that money is there to buy. It can’t put more money into the economy than there are real resources to buy, but our issue at the moment is the opposite of that. We have a stagnant economy and idle capacity — labour and capital either doing nothing or working well below their maximum potential, because there simply isn’t the money in the working and middle classes for them to be able to demand those goods. If your paycheque is going on debt repayments and rent, it’s not going to productive uses.
Labour can go on the attack here.
As a slogan, I have personally been gunning for “Britain Needs a Pay Rise.” This has several advantages. The first is that it makes the Tories turn around to people who think they’re not paid enough, which is everybody, and say “no you don’t, you’re getting paid just fine,” while also justifying why this doesn’t seem to be true for those at the very top of the ladder, who always need more “incentives” to create jobs or, at least, not flee the country to the Cayman Islands. The Tories always say “the super rich pay a large chunk of the taxes” but this is a double-edged sword — they do so because they capture a large chunk of the national income, and the payback we get from them is not commensurate with those excessive rewards. Many people in this country don’t pay much income tax because their incomes are too low! The argument is self-defeating.
The second advantage is that it is a good summary of what is, in my view, the big macro issue of the day: wage stagnation and too much household debt. We’re in an economy where the rich will resist paying people wages but will happily lend them money at interest. This is both economically injust and economic suicide, as this debt burden will become too great and will trigger a recession once too many people find that their debts have outstripped their incomes.
Getting money into the wage packets of those in the bottom 50–60% of the population will not only enable them to pay off their current debts, but to make future spending and increase demand without having to resort to credit. Credit has a role to play in the economy, but household debt needs to get back down to something manageable. Household debt has historically been around 35–40% of GDP. Since the 1980s it’s been steadily increasing, peaking in 2010 at nearly 100%, and even now it’s 87%. We need to reconfigure the economy to one where people get paid money rather than having to borrow it.
Regardless of the slogan, these are the messages that need to come across. Austerity hasn’t just failed, it could never have worked, because it was based on bad theory and bad maths. The Tories have been play-acting as competent managers, but in reality are power hungry and unprincipled, running the country as their own personal slush fund, selling off the country’s assets for short term cash boosts that cost us billions in the long run. Their deals with the DUP, their personal infighting, their constant own goals with referendums and elections show that they’re incompetent at even running a steady ship. They are so out of touch with reality that they honestly think they’ve been doing a good job!
The Tories win on a narrative of “we’ll have to sort out Labour’s mess.” In this moment, at this time, Labour can turn that around. Enough is enough. We’ve experimented with this “let the banks run things” stuff for long enough. Time to get the Johnsons and the Goves and the Hunts out and get the party in that’s backed by Nobel Prize Winners and a long string of economists who understand you can’t cut your way to growth and you can’t starve people into jobs that aren’t there.
Wage growth, less private debt, investment in infrastructure, an entrepreneurial state, and a government that isn’t shackled by myths that should have died out with Bretton Woods but is bold and confident enough to give the economy the short term stimulus and the long term investment it desperately needs. That’s what Labour can run on now. Let’s get that flag up over the palace.