Cameron may be “out of touch” – but the Labour leadership are running out of time

6th August, 2013 12:39 pm

Over the past few days Labour have pivoted decisively towards the government’s failure on Living Standards. Yesterday party polling was released that showed the extent to which people feel squeezed under this government. This was followed up by a briefing conducted by Chris Leslie yesterday (backed up by copious amounts of data) showing just how badly the Tories are failing on living standards.

The dossier is an excellent piece of work. It comprehensively documents the failures of the Cameron government:

  • real wages falling in every region
  • the UK at the bottom of the G7 table with it comes to income growth since 2010
  • inflation has consistently been above 2%
  • and perhaps most shockingly of all, real wages have fallen 36 out of 37 months under Cameron

All of this adds up to a “living standards gap” of £6,660 for working people between 2015. That’s devastating for Cameron, but far more devastating to the lives of millions of people up and down the country who are being forced to go without, as the PM tells journalists that his government have “helped where we can with the cost of living”. I’d hate to see him not helping.

Undoubtedly Cameron and his government are failing on living standards, and the Prime Minister is hopefully and woefully out of touch when it comes to the reality of the living standards squeeze, and the impact that has on ordinary working people.

But whilst Cameron is out of touch, the Labour leadership are running out of time.

The last page of the party’s living standards dossier, after the rigorous and damning research that has come before, is one hell of a damp squib. It outlines what “One Nation Labour” would be doing to boost people’s living standards. That’s the plan anyway – most of the policies listed by the party are either vague or pretty small beer. They’ve all been announced already – not that the voters have noticed.

Energy policy – vague.

Rail fares – vague.

Standing up for families in the private rented sector – vague.

None of this sounds like a policy that is going to make a sizeable difference to that £6,660 hole Cameron has dug for each and every one of us. Labour’s critique of the government’s failures are getting more nuanced – but party policy is still nowhere near expansive or radical enough to meet the task ahead.

Yesterday at the briefing, Chris Leslie alluded to “goodies” that the party would be announcing soon – presumably at party conference of before. They can’t come quick enough, because party activists are still being sent naked onto the doorstep. Our lack of vision – and, perhaps, strategy – is the root cause of the disquiet in the PLP and the malaise in the wider party.

Two years before an election, I still can’t give a good enough answer to the most important question in politics – what is it that should make me vote for your party this time? Because replacing OFGEM and changing the cap on rail fare increases just isn’t going to do.

If we’re still in this position after conference, we’ll be in real trouble. Because it will look like we have nothing to say.

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  • Colin McCulloch

    Now is the time for policy positions – the costing we can put in the manifesto. We need to pick our ground and fight for it. Leaving it another year will be leaving it too late.

  • David Battley

    Bang. On.

    I would have personally argued that setting out a vision last year would have been even better, though I understand the point about keeping one’s powder dry too far in advance of an election, but continued silence will attracting growing suspicion that the powder room is not just dry, but actually rather bare.

  • John Smith

    We had been overpaying ourselves probably from the mid 1970’s, this is the expected correction. Productivity has plummeted as we awarded ourselves pay increases, with often falling output. The public sector was the worst ..

  • RogerMcC

    Well said again.

    The trap we are setting up for ourselves is precisely that the more accurately and eloquently we describe the social catastrophe that is unfolding all around us the more utterly inadequate our solutions will seem in comparison.

    It is perhaps fortunate then that the media is not going to allow the public to hear anything like how bad things really are…..

  • DonGately

    They’re not just vague ideas – they’re actulally bad and counterproductive ideas at times. For example I’m not even sure the cap on rail fares is feasible or even if it is will have a useful impact.

    Train operating companies don’t really make significant profits in the first place. Cap the upper fares and the costs won’t come out of the pockets of shareholders but will just be spread to other fares and that will reduce the numbers using rail off peak. We need high fares to encourage travel at off peak times to be honest.

    I work for a charity – when traveling to london I will go down the day before off peak, work on the train, book a cheap room in a hotel, have a meeting with another charity to catch up and travel back off peak and save money on the peak fare. spreading costs may make this option as expensive or worse which will then just impact on our costs.

    You’ll end up with people trying to use peak, because there’s less incentive not to. We’ll have emptier trains off-peak and unless there’s extra subsidy the whole system will be more expensive to run. We need to push people away from the overcrowded peak and high fares give businesses an incentive to vary work hours, relocate or use IT. Capping costs is just insane when there’s limited capacity and it assumes that fares are that level because of profiteering – they’re not, the profits don’t justify that view. The fares at that level to smooth out demand and push people to off peak. It’s moronic to blindly mess with that.

    It’s an attempt to get a headline whilst not actually achieving much – anyway, the vast majority of commuters, especially working class commuters, use buses.

    • HJ777

      You’re absolutely correct, of course.

      I wonder whether either people like Ed Miliband simply don’t understand this or whether they do, but are just taking a popularist position?

  • Amber_Star

    We’re campaigning on issues like the living wage, rail fares, utilities, bedroom tax, payday lending, gambling machines, unpaid work by the unemployed for profitable companies & zero hours contracts.
    People ask us: “What is Labour going to do?” We reply: “Um, er, try to get people to set up energy co-ops for themselves so they can buy all their members’ electricity from whichever existing supplier is probably cheapest at that time or something like that.”
    The living wage is a similar story: Labour are going to encourage employers to pay it.

    And, pardon my cynicism, but I think energy co-ops will be encouraged with encouragement & employers will be encouraged with profitable contracts & tax breaks & other tangible benefits.

    However, lest we forget, Labour on its bad days is still better than the alternatives!

    • JoeDM

      The other problem for Labour is that many of the Coalition government’s policies are just extensions of the previous Labour government’s policies. Only carried through with rather more effectiveness.

  • McCurry

    What happened to our policy to have the largest house building program since WW2 and our policy to put a million young people back to work?

  • CaptainDallas

    If Labour manage to drag defeat from the jaws of victory, they will only have themselves to blame.

    Cameron couldn’t win outright again the universally despised Gordon Brown, and given the atrocious job the Tories have done in government, it’s incredible that he has even a chance in 2015.

  • sartoris

    It is self-defeating for Labour to draw attention to the fall in living standards because voters will only blame them for it in the same way they have blamed them for the fall in GDP, which the Tories have started to reverse.

  • corinium

    “that £6,660 hole Cameron has dug for each and every one of us”

    Pray, do tell, what was the magic wand that Gordon Brown would have waved in 2010 if he had won the last election, to prevent anyone in the UK from losing out in the aftermath of the biggest worldwide financial crash since the 1930s? Or are you suggesting that all our woes started in May 2010, and if only everyone had voted Labour then that the last 3 years would have been all unicorns and rainbows?

  • swatnan

    I do detect a touch of impatience and touchiness in Mark, and he has every right to be. The clock is ticking, the bell is tolling, the sand is running out. EdM is like Micawber just waiting the something to turn up, but a ‘wait and see’ strategy is no strategy. Labour has to be more proactive and make the running. It has to be radical, not offer more of the same. On the face of it the Coalition are in disarray, Their economic policy is in bits their welfare policy in tatters and employment stas are massaged with Zero Hour Contracts. People are living on the edge, looking for security and salvation. And nothing is being offered. Not even hope.

  • thewash

    Where is Ed Miliband?

    Where is Labour?

    Where is opposition to the horrendous government policies?

  • $6215628

    Why is everyone getting in a Tzx over the Colin’s review seems quite sensible to me,

  • NBeale

    We were on an unsustainable debt-fuelled binge under Labour. Living standards had to fall – we simply weren’t competitive. Inequality fell as well FWIW. Now living standards are rising and the economy is growing strongly. Meanwhile Labour has no policies at all, and any residual claim to economic competence has been demolished by the economy growing strongly just as the 2 Eds were going on about a Triple Dip recession.
    Unless Labour can up their game enormously they are sunk. No policies, no leadership, no credibility.

  • Ashley

    Week in, week out the thing that I am hearing in the local area is that the cost of living is getting out of hand. This is where Labour need to strike. We need to show that we are the party of change, not the party that carries on with more of the same.
    The way that Labour win the election is asking people if they feel better or worse off as a result of the conservative and lib dem policies.
    From this we should focus on 3 key areas.
    1) Living Wage Policy – A commitment to a regional living wage so that standards of living increase and with it a reenforcement of the economy.
    2) Green Jobs Boost – There should be sustained investment in the green energy sector. Whether it is attracting companies such as Siemens to places like Hull, Grimsby and the North East or a government led initiative on carbon reduction targets. This will reinvigorate areas of the country that have seen downturn as a result of the loss of manufacturing jobs and help rebalance the economy away from London and the financial services sector.
    3) House Building Programme – This is the biggie and one which I think the frontbench will pin their hopes on. Another area where local residents have concerns is affordable housing. The South-East is overheated and house prices are creeping steadily upward. However there isnt a match in the number of first time buyers taking up mortgages. This scheme would be usefil on two fronts; it would create jobs which would prop up the economy in the short to medium term and it would also allow young people to get on the property ladder and be able to have invested in tangible assets.
    I have no doubt that come September we will all have light shed upon Labour’s intentions come 2015. I would bet that Ed M will announce a commitment to at least one of the above. From September onward the party will be refreshed and the grassroots campaigners, where the Labour Party is at it’s best, will be able to articulate fully the vision for the future.
    To use a horse racing analogy, the riders are going behind, about to be loaded in. September is the starting point.

  • Aaron D Highside

    The economy, immigration, religious extremism, welfare profligacy…so many things to avoid, so little time.

  • Mouch

    Just some thoughts…
    Might it be that after a long, personal credit (debt) driven boom to the tune of £1 trillion (not to forget sovereign debt of course), our living standards are just being ‘corrected’ to a level that might have existed if we hadn’t borrowed the money?
    And might it be that party’s vagueness is a measure of the difficulty it faces in trying to find solutions to problems that don’t involve more tax, borrowing and spending?

    • JoeDM

      Exactly. The economy adjusting to long term structural changes over which governments have very little power.

  • HJ777

    We had a much bigger credit boom under Labour than any other country, hence we were paying ourselves far too much, and hence the crash and fall in incomes has also been bigger.

    It will take as long to unwind as it took to build up.

    Most people understand this, but the left seem to think that all the government has to do is to pull the right levers. Well that worked well for a Labour government, didn’t it?

    I am a critic of the present government’s economic policies – but the one thing that can definitely be said for them is that they are much better than Labour’s alternative (which was just to do more of what helped get us in this mess in the first place).

  • Rosie2

    Can we expect a conference announcement on bedroom tax ?

    “This hated bedroom tax is trapping thousands of families, forcing vulnerable people to food banks and loan sharks, and there is now a serious danger is could end up costing Britain more than it saves as tenants are forced to go homeless or move into the expensive private-rented sector.
    David Cameron’s bedroom tax is the worst possible combination of cruelty and incompetence. He should drop it and drop it now.”

    http://www.dailyrecord.co.uk/news/politics/liam-byrne-calls-bedroom-tax-2130853

    (Posted 06-08-13)

  • markfergusonuk

    The economy was growing strongly again in May 2010

    • Mouch

      Debt fuelled I’m afraid Mark – a Brown/Balls Keynesian intervention. Sooner or later the junkie has to come off the drugs and get clean. We took the medicine. The French didn’t and they’re now approaching the point where they will have to do cold turkey.

    • Tom Mein

      On the back of £250 billion money printing exercise, or are we supposed to have forgotton about that?

    • sartoris

      Yes, artificially fuelled by excess debt.

    • corinium

      It grew strongly (1%) in Q1 2010, Q2 returned to about 0.4% and fell in Q3. So unless you think that there is some powerful ju-ju in a blue rosette in Downing Street, that can turn around a £1.4tn economy within months purely by taking charge, that fall in GDP was baked into the pie, whoever was in charge.

      What was the different fiscal and monetary policy that Labour would have enacted that would have returned us to steady growth? Please tell us. It seems odd that according to you Labour had such a policy in 2010, but are unable to remember it to tell us now.

      The truth is that Labour would have been in exactly the same position as the Coalition (‘I’m afraid there is no money”) – forced to consolidate the public accounts. Splurging more borrowed money was not an option for either party, whether they wanted to or not. Austerity in some form or other was guaranteed – it always is after a debt fuelled boom. A little global perspective would show that there are other countries where austerity has been considerably harsher on the population than anything even contemplated here.

    • HJ777

      Surely you’re aware that a short term uplift in GDP can always be created by a rapid rise in government borrowing and spending? It’s a simple trick – in the short term, government ‘output’ cannot easily be measured (because it mostly isn’t sold at a price), so for GDP purposes, it is assumed that output rises by the same amount as input (i.e. spending). So spend more very quickly and GDP goes up – simple.

      This is exactly what Labour did prior to the election.

      The problem is that it isn’t sustainable. GDP actually went up by less than all the extra borrowing and spending required to produce it. And when the spending increases stopped (spending wasn’t actually cut, of course) GDP growth halted too.

      Frankly, I’m surprised that you need such a basic economics lesson.

  • thewash

    Today’s telegraph reports that Labour ‘is concerned with level of polls’. Well, what is Labour doing about it?

  • trotters1957

    Help to buy, zero interest rates, Wonga, the Tories are doing the same.

    • HJ777

      In some respects, yes, but at least they aren’t fuelling it through ever-increasing public spending (even though the ‘cuts’ are pretty modest in reality).

  • trotters1957

    Help to buy, zero interest rates, Wonga, the Tories are doing the same

  • trotters1957

    Help to buy, zero interest rates, wonga, the Tories are doing the same.

  • trotters1957

    Help to buy, zero interest rates, wonga, the Tories are doing the same

  • trotters1957

    Help to buy, zero interest rates, Wonga, the Tories are doing the same, another property bubble on the way and no doubt another bank bailout.

  • derekemery

    I suspect the public will be looking for a party that can bring a return of real economic growth. That doesn’t sound like any party I know.

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  • Nicky Grant

    This is the issue when people with little knowledge or grasp of basic economics have opinions on the economy. First off the pattern of inflation 2010-present is very similar to that of 2007-2010, under the capable Labour leadership. Obviously inflationary pressures are largely attributed to global price changes. Also inflation is steadily going down and is now around 2.8% which is around the average under Labour 1997-2010. The number on inflation says nothing anyway, its nominal, inflation of 1000% isn’t necessarily damaging, Its a blunt instrument to measure the “health” of an economy. In relation to the real wage declines – first off the £6660 figure is an internal Labour forecast. Very misleading use of “statistics”. Next of all you’re viewing the economy in segments. “high inflation=bad”, “lower real wages=bad”, which are both meaningless statements on their own. You neglect to mention the increase in employment – made even more remarkable by the fact a surge in private sector employment has more than replaced the bloated, unnecessary and totally unsustainable state funded jobs created by Labour with their endless think tanks and bureaucracy that have now been massively reduced. Real wage decreases in many cases can help to stimulate the labour market, as evidenced in the UK. It is better more people are in work and earning a bit less- than to have many out of work living on benefits and contributing to a massive national debt. As employment rises, new business start ups increase, the national debt goes down/confidence rises [all of which are happening] then GDP will likely increase (signs of a turnaround already with GDP on the rise) and coupled with the pattern of steadily declining inflation then in the future real wages will recover and will not be artificially maintained by insane borrowing to cover up fundamental economic policy flaws- which Blair/Brown got away with for far too long. If you think Labour could do better whilst being realistic with spending/borrowing you’re deluded. What the govt. has achieved Is pretty amazing given the global climate (unemployment in EU is 12.8% on average, 7.8% here) and lack of spending ability by the flawed policies of the previous government.

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