The Tories are changing their tune on the economy. Labour must do the same

Those of us who are following Labour’s leadership race could be forgiven for thinking that we have collectively travelled back in time. Like the ghost of Ed Miliband’s past, Lisa Nandy’s comments on the fiscal viability of the 2019 manifesto and the need for a Labour leader to make “tough choices” during the Newsnight leadership hustings served as a reminder that in 2015 Labour tried to beat the Tories by offering austerity-light messaging, and failed. This line of argument illustrates a fundamental misunderstanding of current Conservative thinking and has the potential to harm Labour’s strategy going forward.

Labour must pay close attention to the forthcoming budget – supposed to be delivered on March 11th, though there may be a delay – as it will give us the clearest insight yet into what kind of government we will be dealing with over the next four years. The Downing Street shake-up last week, which saw Rishi Sunak replace Sajid Javid, hints at Boris Johnson being committed to an economic policy that will diverge from the simple “austerity” narrative advocated by David Cameron and George Osborne.

The Conservatives are faced with the challenge of holding together a new electoral coalition that stretches from wealthy constituencies to deprived parts of the country. To consolidate their vote, the plan is to make money available for infrastructure spending, the NHS and social care. Another piece of the puzzle will be government spending on research and development to encourage private investment. This, so the logic goes, will stimulate growth, create jobs and level up parts of the country hat have suffered from chronic underdevelopment.

In contrast to the Cameron government, Johnson’s messaging will not say that we are “all in this together” during hard times that require tough choices. This government will tell us that a land of opportunity lies ahead. It is optimistic, and it urges people to feel proud and excited about the future. For Labour, this creates a variety of challenges.

Firstly, whilst our messaging and policies should tap into the anger and frustration many people in this country feel, the challenge lies within channelling this anger into a call to action and a feeling of empowerment, rather than helplessness and despair. How we talk about the systemic problems of our economic and political system can feel paralysing. Where to even start with the fightback? We must make sure that we do not simply overwhelm the public, and instead give them a tangible idea of things that they can do, and that we will do, to enact change.

Secondly, by pushing out a message along the lines of “socialism is when the state does things, like investing in the police or NHS”, we have somewhat neutralised ourselves in the political debate. Some public spending, such as for the NHS or the police, are deemed common sense and necessary. But this does not extend to welfare or local arts and culture projects.

On welfare specifically, the underlying political narrative has not changed. The Tory manifesto still talked about “getting people back into work” as the best route out of poverty. It is certainly true that job creation will help those who have lost their job due to closure of industries. And yet punitive work capability assessments targeting those with illness and disability and a narrative of “benefit scrounging” if one cannot work is also rooted in this thinking. This plays into the narrative that portrays a Labour Party supportive of a strong welfare state as paternalistic, one that wants to “keep people poor”, while a Conservative government “understands” the proud working class that doesn’t want “handouts”.

This creates the perception of two types of spending – one good (NHS, police), and one bad (welfare). As long as the Conservative government comes through on investing in the first, the public will forgive them for neglecting the second, as it is believed that economic growth will solve problems that led to the need for welfare spending in the first place. Attacking the Tories for softening fiscal rules to make investment in “good” public services will not help Labour. By being “tough” on spending, we reinforce their messaging and will still be considered irresponsible for our spending plans. Our fundamental problem is that we have failed to make the argument for a universalism of all public services.

Should the R&D strategy be successful and attract new businesses that create jobs and increase prosperity across the Midlands and the North of England, it will be tough for Labour to shift the argument on the role of the private sector in leading innovation, which is a classic argument in favour of neoliberal policies of marketisation. An argument for public ownership and workers’ control of these industries that will mean we can invest the money it generates to the benefit of all, rather than private profit, rests on having made the case for universalism first.

To operate companies in the public interest, rather than to serve the profit motive, will mean that the money it makes can be invested back in our public services rather than line bosses’ pockets. It means we can create a higher standard of living for all, by paying for affordable publicly owned housing for all, nationalised rail and bus services, education, arts and culture for the benefit of the people. If the public believes that an individual’s ability to make money trumps paying for things they might themselves not need or use, we will struggle to beat the Tories.

Labour must make the case for an economy that operates on anti-capitalist principles, rather than for private profit, to pay for universal public services that will serve to empower people. That is the only way to deconstruct the government’s narrative. Without fundamentally changing how we see the economy, we will forever play catch-up with the Tories in a political framework set by them and the class they represent.