Britain’s politicians are scared of the future, but they agree it’s all someone else’s fault
This week saw one of the major events of the British political year – the Autumn Statement, in which Britain’s Chancellor of the Exchequer, or finance minister, George Osborne, sets out the public spending plans for the coming year.
This year, autumn was cold and grim. The Conservative-Liberal Democrat coalition government announced that the economy would barely grow for two years, that they would have to borrow more than they expected, that there would be more unemployment, that austerity would last for longer, and those on low incomes would face an extended squeeze.
Nevertheless, the government is vowing to press on. They say there is no alternative, and that it’s all the fault of Europe.
They’re not entirely alone in being glad that Britain isn’t dealing with the ECB. Before confirming this dismal news, Osborne and Ed Balls, Labour’s “shadow” Chancellor, appeared together on Sunday morning TV to discuss Britain’s economic future. After separate interviews, they were invited to share a sofa and reflect on what they had in common.
The answer offered by Balls? Shared relief that Britain was not in the euro and so was not deeply entangled in the current eurozone crisis.
Indeed, the eurozone crisis is politically useful for both Osborne and Balls.
For the Conservatives, whose eighteen months in office have spectacularly failed to produce the growth through austerity they promised, Europe offers what Osborne calls “An explanation, not an excuse” for Britain’s faltering economy. Look, says the Government, things might be bad, but when even Germany can’t sell Bonds, we’re a safe haven.
This isn’t a particularly convincing argument, but Labour struggles to take advantage. The Labour leaders face polls which say the government is doing a bad job, but that voters do prefer the Conservative Economic team to Labour’s and blame Labour for the current mess more than they blame the government.
In essence, the crash broke voter’s faith in Labour’s economic message, and our current leaders are struggling to regain that trust. So for Labour’s Ed Balls, pointing out that he was the man who kept Britain out of the Euro is a way of demonstrating he can be trusted with the big calls.
This new Labour tone on Europe feeds a growing Euro-doubt among Labour politicians. For thirteen years, Labour had to make Britain’s relationship with Europe function against a tide of public scepticism and Conservative disgust.
While Labour ministers saw the benefits of trade, partnership and co-operation, they knew that immigration, bureaucracy, waste and over-regulation were what Europe stood for in voters’ minds. Now economic collapse and incompetence is being added to that modest list. No wonder thoughtful Labour types talk about a new, pragmatic relationship with Europe.
Yet beneath this contentment at Britain’s limited exposure to European crisis, British politicians are terrified that things might soon get even worse. Both Labour and the Tories know that European strength is essential to British recovery. Its absence scares all of us, as does our impotence.
So far, the British political response has been to demand that someone else, whether the ECB, the IMF, Angela Merkel, or the Chinese, sort it all out. British politicians are particularly given to wagging their finger at Germany, demanding that Germany pay more, while insisting Britain should pay nothing.
In the absence of any ability to drive growth in the Eurozone, British political debate is taking an insular turn. Labour spokespeople relentlessly repeat that the government is going “too far, too fast” with public sector cuts and offer voters a “five point plan” for growth, which consists of moderate tax cuts to boost consumption and a little extra spending on a jobs programme.
The government responds by saying things would be worse under Labour as more spending would lead to a Bond market revolt. Yet in his autumn statement, Osborne proposed an “off the books” growth plan. The government is encouraging sovereign wealth funds and pension funds to fund infrastructure, while offering to insure lending to small business to reduce the cost of borrowing. Neither will be cost free. Money never is.
So as well as a shared relief at not being in the euro, Britain’s leaders have a few other things in common. They know the economic crisis could get worse yet, that it’s definitely someone else’s fault, and only their particular package of micro-economic fixes will make things better.
Beyond Westminster, I suspect that British voters mostly note that things aren’t getting any better, no matter who is in office, and are clinging to convention and hoping for better times to come.
Whether better times do come is as much down to decisions made in Frankfurt as in London.
Of course, being British, we don’t want to have a say in what those decisions are. Or rather, we want a say, but not to pay.
A contribution to State of the Left, a monthly insight report from Policy Network's Social Democracy Observatory
Hopi Sen is a former head of communications for the Parliamentary Labour Party. He is now a consultant, writer and commentator. He also blogs at hopisen.com