Attending a local Labour party meeting on Friday evening it was interesting to gauge the reaction to Ed Miliband’s decision to name Alan Johnson as his shadow chancellor. At first I was surprised and a little disappointed, a sentiment shared by many at the meeting. I think all present had naively assumed Cooper and Balls were the only two realistic candidates, and only Cooper seemed genuinely likely of the two to actually get it. Furthermore, given the particular leanings of my local constituency party, I think that they very much liked the idea of a female shadow chancellor. When she topped the poll of the PLP vote on Thursday night I had become even more convinced of the likelihood of her appointment to the role. But, as some of the shrewder members began to point out as the meeting progressed, the appointment of a moderate and very un-Ballsonian alternative makes a great deal of sense.
In terms of the party’s internal ‘psychodrama’, it spreads power more evenly across the spectrum of the shadow cabinet.
Moreover, the move also makes a great deal of sense as Ed Miliband attempts to pick his way through the shark-infested political waters that stand between him and victory at the next election.
You hardly have to be a political analyst par excellence to have spotted something of a pattern since May 6th. Any complaints from opposition benches about the speed or scale of the coalition government’s cuts are routinely met with coalition claims that the budget deficit was created by the reckless spending of the last Labour government. Then eye-watering figures detailing the extent of the deficit are routinely trotted out that are both scary and seemingly compelling justification for the cuts.
Of course the truth of the matter – the truth that the Tory press has somewhat unsurprisingly failed to publicise – is that the deficit was created by a government taking the bold, decisive action necessary to save the banks and prevent the nation dropping off the financial precipice.
We can only assume from their track record so far in government that the coalition, faced with the international financial crisis, would have allowed Britain to go bankrupt, the cash machines to run out of money, and every major high street bank to collapse, at which point they would presumably have called a celebratory press conference in order to announce to a grateful nation that the UKs budget deficit remained blissfully low. The equivalent of me allowing myself to end up on the street for non-payment of rent but taking consolation from the fact that at least I had no overdraft.
Regardless of who or what created the deficit in the first place however, there are numerous compelling economic arguments for a Ballsonian economic approach; oppose all cuts and instead advocate economic recovery and growth, not only in order to protect our public services and create jobs, but as a means of cutting the deficit through the ‘automatic stabiliser’ effect of increased tax revenues and falling welfare payments.
However, this is politics not economics. And political considerations loom large for the new leader and his new shadow chancellor. It took 18 years for the party to recover the last time its reputation for financial reliability took a serious blow. Being labelled ‘Deficit Deniers’, in the pay of grouchy trade unions (and with a leader handed the top job by them), during a period of industrial and social unrest, whilst the coalition, backed enthusiastically by the right-wing press and making what are seen as tough but responsible decisions in the “national interest”, could see Labour not only lose the next election, but the one after that too.
Ed Miliband needs to accept that there is a widespread consensus that the budget deficit is a serious and immediate problem and a threat to the nation’s long term prosperity. He must position Labour full-square in the centre of British politics, espousing economic prudence and responsibility, opposing the reckless, breakneck speed of the cuts, but not – as he has already indicated – unthinkingly opposing every cut that is proposed.
By the 2015 election (for I fear this coalition will last the full 5 years) the government, according to their own timetable, will have wiped out the budget deficit. They will also have changed the face of Britain forever. In 2015, the leader entering Number 10 the morning after the election will be the one whose party presented the most compelling vision for ‘post-cuts Britain’. That’s why Ed Miliband was absolutely right to cast himself and Labour as the optimists of British politics and why he was right also to hint at a grand vision for the future of the country (without, understandably and rightly as a new leader, giving much of an indication of what this vision might entail).
However, to have even a chance of victory, Labour must go into that election with their reputation for economic competence restored. That is why denying the Balls camp the chance of pitching their anti-cuts tent smack in the middle of his new front bench was a shrewd and necessary decision and yet may prove to be one of his most important if, in May 2015, he walks through that famous front door and becomes the next Labour Prime Minister.
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