A new economic narrative for Labour’s New Generation

October 9, 2010 2:55 pm

doveBy Darrell Goodliffe

Now the dust has settled a little on the various electoral excitements for Labour, it finds itself at a fork in the road. I would argue that there is a real policy divide within the party between deficit ‘hawks’ and ‘doves’.

Rather oddly, given his combative nature, Ed Balls has up to this point been the primary spokesperson of the doves whose basic contention is that Alistair Darling’s deficit reduction programme was too fast, too soon and that money should still be pumped into the economy. Balls himself sees this merely in a Keynesian light but some doves (or maybe I am the only one) would like to see more than investment to buoy the economy and see it used as well to effect radical restructuring. I would like to see a radical overhaul and change of this economy away from corporate enterprise (even of the small business variety) towards co-ops and mutuals and the creation of a new economy from the ashes of the old. However, that makes me a radical, not a mainstream dove.

Hawks by contrast adopt the line that Darling’s deficit reduction program was ‘just about right’ to paraphrase our new shadow chancellor. They oppose the cuts like the doves but do so in more abstract terms arguing instead that Darling’s program was fairer than the ConDem plan, and would lead to economic growth. At this moment the leadership, despite the appointment of a hawk as shadow chancellor, is equivocating between the two positions saying Darling’s proposals represent a ‘starting point’. Logically, of course, Geroge Osborne could say the same thing; he started with Darling’s proposals and took them much, much further. The question is not where you start but where you want to go and this is the central question that now lies before our leadership and our party.

Again, looking at the progression of views I would argue my ‘radical’ stance is only the logical progression of the dove line because the doves, unlike the hawks, see the cause of the crisis not in an unfortunate act of fate but as a result of serious structural imbalance within our economy. Put simply, the financial sector was allowed to grow too high and mighty; furthermore, depression of wages and rampant credit led to the debt crisis. So, increased state spending was not the problem but was made necessary (we forget too easily how much of the deficit arose from bailing out the banks) by wider socio-economic problems. Labour does itself a disservice by accepting the Darling proposals and implicitly conceding the point its ‘profligacy’ was somehow to blame.

‘Sensible’ people will now intervene and say it’s reckless not to deal with the deficit, but the question is not whether we should but how we should. Ed Miliband has talked about the need to tax more and he is absolutely right that we do need to. Labour’s problem was not that it spent too much but that it did not tax enough. In government, Labour spent less than Margaret Thatcher but taxed considerably less as well; receipts under Labour averaged 37.6% compared to 42.4% under Thatcher. So, an alternative way to reduce the deficit does exist. It will be protested that this is not politically palatable but I think when presented with the choices the voters will surprise the cynics.

This would be especially true if they were given hope of something new/better and a stake, through the mutual and co-operative form of ownership in building it. Labour must start doing the ‘vision thing’ again and it’s the doves who have the vision in this instance not the hawks. The comparison with the far-seeing animal only extends to the predatory nature of their policies. Labour’s “New Generation” needs a new economic narrative and this is something the hawks simply cannot provide.

Comments are closed

Latest

  • News Scotland Candidate selected to replace Alistair Darling in Edinburgh South West

    Candidate selected to replace Alistair Darling in Edinburgh South West

    Ricky Henderson has been selected as the to fight the Edinburgh South West seat as the Labour candidate for this year’s election. The seat is being vacated by retiring former Chancellor and Better Together chair Alistair Darling, who has been an MP since 1987. Ricky Henderson, 53, has been a councillor in Edinburgh for 16 years. Speaking after the selection tonight, he said: “I am absolutely delighted to have been chosen to succeed Alistair Darling as Labour’s candidate. He will […]

    Read more →
  • News Scotland Video SNP surge “is real” – Lord Ashcroft speaks ahead of Scottish polling announcement

    SNP surge “is real” – Lord Ashcroft speaks ahead of Scottish polling announcement

    Labour activists, MPs and strategists will be paying close attention to Lord Ashcroft’s polling of Scottish seats (which should be out in the next few days), but for a taster on that – and the impact of UKIP, watch this interview of Ashcroft from Sky News’s Joey Jones:

    Read more →
  • News Roy Hattersley defends Miliband over NHS election focus

    Roy Hattersley defends Miliband over NHS election focus

    Former Labour deputy leader Roy Hattersley has leapt to Ed Miliband’s defence, after the current leader received criticism from former ministers this week for relying on the NHS too much as an election issue. Alan Milburn and John Hutton made public their scepticism about Labour’s plans for the NHS, with former Health Secretary Milburn saying “major reform” was needed in the health service. Following Neil Kinnock’s call for an end to “sniping from behind”, Hattersley has also come forward to attack […]

    Read more →
  • News Wales Former Welsh Secretary Paul Murphy announces retirement

    Former Welsh Secretary Paul Murphy announces retirement

    Paul Murphy, MP for Torfaen, has announced he will stand down from Parliament in May. Murphy has represented the constituency for 28 years, since first being elected in the 1987 election. He served as Secretary of State for Wales twice, under both Blair and Brown: his first stint between 1999 and 2002 was followed by another 18 months in the role between 2008 and 2009. He also served as Secretary of State for Northern Ireland between 2002 and 2005, and […]

    Read more →
  • Featured We must ensure that disabled people get to cast their votes

    We must ensure that disabled people get to cast their votes

    By Stephen Twigg MP and Kate Green MP There are around 11 million disabled voters in the UK. In a few weeks, they will have the opportunity to go to the ballot box and have their say on the future direction of our country. Between now and May 7th, it is imperative that we do all was can to ensure their voice is heard. Our democracy is becoming increasingly inaccessible. Over the last year, as the Government have rushed the […]

    Read more →