Could Labour Govern?

What if Labour did win power in 2015?

My new pamphlet, Future Shock, argues that a future Labour Government will face such intense political opposition it would struggle to govern. Without a strong strategy we could face a heavy defeat in the subsequent general election. Labour needs to put in place measures now to head off the likely political opposition to the policies it wishes to pursue in office. If the Labour leadership fails to do this it will face the depths of unpopularity currently experienced by the French Socialist President, Francois Hollande.

Future Shock predicts that a Miliband Government would face strong opposition in the following areas:

• Reforms to big business decision making
• Banking reform
• Public Spending, particularly with regard to local government and the health service
• British membership of the European Union

Labour faces a monumental choice over macroeconomic strategy – does it maintain the Coalition’s spending envelope or will a Labour Chancellor slow down the pace of spending cuts? Adopting either course will generate political risks. Future Shock argues that retaining the Conservative spending limits will potentially generate huge unrest within the labour movement because Ed Balls has indicated he wishes to move money around within the budget. A reallocation of resources could mean even deeper cuts in areas like local government finance after four years in which big Northern cities like Newcastle and Liverpool have had to absorb spending reductions. By 2015 the health service could be buckling under the pressure wrought by four years of cuts to social care funding. There is a strong and established relationship between the readmission of elderly patients to hospitals and the provision of home care. Readmission rates for over 75s have been rising and this trend may intensify by 2015. Labour’s reputation as the party trusted to manage the health service might not survive this pressure on hospital resources.

If a Labour-led Treasury slows down the pace of the cuts, it will have to be sure that the winners from this approach, such as the construction sector, are as vocal as the sectors of the economy that can be expected to oppose a change of strategy. A further depreciation of sterling might take place in reaction to a change in macroeconomic strategy. The Tories would seek to capitalise on this development, just as they did in the 1976 IMF crisis.

Future Shock argues that the Confederation of British Industry can be expected to lead a high profile campaign against reforms to corporate governance. Big business will argue that Labour reforms will threaten economic confidence and impede recovery. The French Socialist administration faced political stunts generated by its corporate elite when it introduced the 75% tax rate, such as Gerard Depardieu’s departure to Russia. Labour could face similar coordinated political attacks by big business.

Labour may well not enjoy a parliamentary majority and could face House of Commons ambushes from the Scottish Nationalist Party on issues designed to generate maximum political embarrassment. Equally, the House of Lords could instigate systematic delays to a Labour legislative programme. Barack Obama faced two years under sustained attack from the Left and Right in this first term. Ed Miliband could face a similar fate given his policy on holding down public sector pay.

My pamphlet makes a series of recommendations for how Labour can overcome the type of opposition that I have sketched out in these scenarios. Labour needs to foster a strong social movement that can rally in support of its reforms to the private sector and the banks. Ed Miliband also needs to win a clear electoral mandate for increasing taxation of wealth in order to alleviate the burden on low and middle income households. As Labour consolidates its lead in the opinion polls, an increasingly pressing question for the Shadow Cabinet should be not only ‘can Labour win but can we govern?’

Matthew Sowemimo is a Labour activist and has led national and international political campaigns for charities like Christian Aid