sam boyd | politics

For the Tories and Labour, it’s keep calm and carry on.

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6 December 2011

Strangely for what has been hailed as such a monumental shift in the UK’s political, social and economic fortunes, we trundle out of last week with all three major parties essentially continuing as they were. Keep calm and carry on is the order of the day.

Ed Balls has written an op-ed in today’s Times, taking on the government’s potent and consistent attack that “you can’t borrow your way out of a debt crisis”. His answer? Stick fervently to his guns. Whilst the government is borrowing £158bn more than planned to fund soaring unemployment and losses in productivity, Balls says he would borrow more to fund growth and jobs before reducing the deficit more gradually.

The Shadow Chancellor also challenges those who say his Keynesian approach of short-term stimulus followed by a “balanced medium-term deficit plan” may be “good economics”, but is “bad politics because it is ‘out of tune’ with the public mood.” Rather than changing tack and embracing fiscal conservatism, Balls instead chooses to heed the advice of his “old friend Ken Clarke”:

“in the end, good economics is good politics too.”

As George Eton at the New Statesman puts it, this is an attitude of “we’re losing the battle, but we’ll win the war”. It’s a risky strategy, that depends upon worsening economic conditions (which, as the IFS has spelt out, are certain to arise) translating into voter support flowing towards the opposition.

Balls will note, however, that the exact opposite has hitherto occurred. As the economy has worsened, more people are choosing to stick rather than twist. A poll directly after the dire forecasts of the autumn statement showed that Osborne’s lead over Balls as the public’s chancellor of choice widened to 6 per cent, up from 2 per cent in July.

Crucially, more people still blame Labour’s profligacy for these tough times than they do the coalition’s economic mismanagement. Sunny Hundal at the Liberal Conspiracy blog has also noted that history suggests Britons, in any case, tend to choose Conservatives to steer us through times of economic strife.

Whether or not Balls’ economic analysis, and his proscribed cures, are right, something in his strategy needs to change for it to translate into the reversal of these steadfast patterns in public opinion. So long as Labour is seen as just wanting to “spend more”, when everyone knows there is “no money left” – even though borrowing is rising hugely under this government anyway – Miliband and Balls are unlikely to prosper politically whatever the economic weather.

Of course, it is true that the full force of our forthcoming plunge in living standards is yet to really hit. But will that be enough to turn people back to Labour? Balls is clearly hoping so.

As far as the Tories are concerned, as I noted yesterday, the autumn statement represented some tinkering around the edges but largely the continuation of the same agenda as before – the paradoxical ideal of “expansionary fiscal contraction”. At Treasury questions in the House of Commons this afternoon, the same old debates raged on: Osborne cited various “experts” who agree we must steer the course of austerity he has set out. Balls claimed austerity is choking off the recovery and pushing up borrowing: “all this pain for no gain”.

Both parties therefore place their faith in sticking to largely the same strategies as a year ago, leaving all the political questions wide open to the economic elements. If anything, history and recent polling suggests that voters will tend towards sticking with Tory nurse for fear of something worse – unless Labour has a sudden strategic breakthrough or else living standards take such a drastic tumble that Miliband and Balls win by default. Nothing is certain in these tumultuous times.

The only thing we really know for sure is that for ordinary working people, and the millions unemployed in the UK, a decade of unprecedented stagnation in incomes and falls in living standards awaits.


Written by Sam Boyd

December 6, 2011 at 5:36 pm

Posted in Politics

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