Cameron's trap: Lessons for Labour from the 1930s and 1980s
As the Parties pause for the recess, Policy Network publishes a substantial new pamphlet on the “economic trap” in which the Conservatives hope to snare Labour
Cameron’s trap is a political contest based on managing austerity rather than promoting growth. McClymont and Jackson argue that “Labour must make the next Election a contest around which party would be best at using government to promote growth and not a contest defined by the management of austerity”.
Drawing on their expertise as historians of twentieth century Britain, the authors emphasise the importance for Labour of countering the historical Conservative strategy of claiming relative rather than absolute economic competence: things are bad, but they would be worse under Labour is the traditional Tory tune. The success of this claim rests on the electorate accepting the argument that cutting government spending is the only economic solution available to government. When this is accepted, as Baldwin and Thatcher successfully demonstrated in the 1930s and 1980s, the electorate are likely to see the Conservatives as the best-equipped party to deliver.
However, crucially for Labour, Jackson and McClymont highlight a major difference in the current state of the economy compared to the past, which means that the electorate are likely to be less susceptible to the historical Tory tune. As the authors explain: “In the 1930s and 1980s, Thatcher and Baldwin made deep cuts in spending while presiding over sluggish economic growth but neither was punished by the electorate. This is because, in spite of persistent high unemployment, living standards rose for the majority of the population. These governments delivered enough prosperity for enough of the time to retain electoral support”. But in the current economic context, “the traditional sources of economic recoveries – even partial ones – under Conservative governments in the past are weak or absent. There is little scope for a housing, finance or consumption boom. Meanwhile, attempts to ‘rebalance’ the economy towards manufacturing are already faltering because the government’s actions are largely rhetorical.”
At the same time, “the squeezed middle, according to the IFS, will have endured more than a decade of stagnating living standards by the time of the next election”. These factors narrow the space for the Conservatives to “deliver selective economic growth for certain regions and classes”, presenting Labour with an opportunity to “mount an appeal that focuses on economic underperformance and squeezed incomes – and which, by focusing political argument around an activist state, forces the Conservative away from talking about public spending on to the less hospitable political terrain of how to deliver growth.”
The pamphlet argues that in order to sidestep the electoral trap being sprung by the Conservatives, Labour must:
•Refuse to be driven into a simple defence of the public sector and public spending and instead mount a patriotic appeal to the nation to improve growth and living standards.
•Put forward a more convincing strategy for private sector growth than the Conservatives. A key element of a credible growth strategy would need to be a widely-supported active industrial policy. In this way “Labour can evade the trap of the ‘tax and spend’ argument of 1992, by making the key measure of governing competence the creation of new and sustainable jobs that improve living standards. Labour is more comfortable than the Conservatives with the idea of an activist state: the Conservatives have reason to fear a political contest organised around which party can best promote growth rather than which party can best reduce spending.”
•Aggressively highlight the Coalition’s preference for regressive charging mechanisms to fund public services. Labour can counter this by offering more progressive funding mechanisms, and developing new welfare policies that reduce economic insecurity by pooling risk. Crucially, these approaches need not require significant additional spending.
The pamphlet concludes that Labour must: “embrace the successful electoral pitches of victories in 1945, 1964 and 1997. Each of these elections involved an attack on a Conservative party that had presided over a period of economic decay. 1964, with its focus on economic underperformance and relative decline, presided over by an out of touch Tory elite, is particularly resonant given the likely electoral battleground in 2015. A patriotic, national growth appeal is therefore essential to highlighting the inadequacy of Conservative political economy.”
Gregg McClymont is a Labour MP and shadow pensions minister
Ben Jackson is university lecturer in modern history at Oxford University and a fellow of University College
An electronic copy of the pamphlet is available for download above and includes a detailed executive summary.
The Guardian marked the launch with a lead story, together with a comment piece by the authors. BBC News also led with the story on the day of the pamphlet's publication and BBC Radio 4 discussed the conclusions on the Today programme.
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