Labour’s strategy may be about to be tested to breaking point

20th February, 2012 11:07 am

They are so fragile and young, we can’t even call them green shoots. The recent indications of some pick-up in the economy might better be described as a germinating seed struggling in a soil weak on nutrition and beset by pests.  But there is a glimmer of hope.  It could all be dashed by Eurozone collapse or an escalation in the Middle East but if we escape those horrors then it seems confidence may gradually begin to return, maybe with some buoyancy, as the year progresses.

This is, of course, bad news for an opposition party.  Without a major negative shift in economic circumstances, it is rare for voters to think again about how they voted last time. Most changes of government since 1945 have been preceded by an economic crisis of some sort.

But economic recovery, even a modest one, will prove particularly damaging for Labour.  This is because the Party has hung its appeal to voters on the claim that the Government’s austerity plans are preventing recovery. The only part of Labour’s message that seems to have cut through is the slogan ‘too far, too fast’.  But if the economy begins to grow again with any degree of vibrancy, the Government will say that far from cutting ‘too far, too fast’, their plans have been ‘just right’. In short, Labour will have been proved wrong.  So the conclusion that voters came to in 2010 that Labour could not be trusted with the economy will have been reinforced rather than challenged.

There is plenty of opportunity to dance around this conclusion.  Some will say that Labour is not arguing that the economy will never recover just that growth will be less robust than it might otherwise had been. They may also argue that Labour’s message is fundamentally about the best way to get the deficit down not the wider economy. But none of this matters.  Electoral politics is painted in bold colours and crude shapes.  Few will look at the detail and nuance.  The message will go out that ‘borrow-and-spend Labour’ opposed cuts because it would prevent growth and they got it utterly wrong.

All of this will have been utterly predictable.  The cuts, while painful and deep, only represent one particular economic headwind.  Low investment, low productivity, low earnings and high inflation are the others.  Positive changes in these could well get the economy chugging along again.  To suggest that austerity is the only or the main blockage to growth is wrong.

However, even if growth remains elusive, it is unlikely to benefit the Party.  The majority of voters clearly made up their mind in May 2010 that Labour could not be trusted with the public finances or the wider economy. Nothing has been said by the Party, in a sustained fashion, since then to persuade voters that Labour has changed. The welcome but limited impact that was made in January on Labour’s approach to the deficit has dissipated as the ‘too far, too fast’ message immediately returned as the leading mantra. So even if the economy remains sluggish, voters have not been given any serious reason to listen to Labour’s explanations or solutions.

Improving economy or flat-lining economy – Labour isn’t yet in the game either way.

Adam Lent is co-author of In The Black Labour and was formerly Head of Economics at the TUC. He can be followed on Twitter @adamjlent

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