Since this is a 5 year fixed parliamentary term, we are experiencing the longest election campaign in modern British politics. It started heating up during the 2013 party conference season when Labour caused a stir with its energy promise and the Conservatives sparked controversy with its welfare policies. If one was to assess the campaign run by Labour so far, the outlook would be fairly positive. As I called for, Miliband shook up his shadow cabinet, (although not enough if you ask me) and embraced left wing populism to connect with voters. Labour have succeeded in pushing ‘cost of living’ to the heart of politics and dictating government policy on recent issues such as energy, payday loans and fixed odds betting machines. Labour has asserted a strong stance on welfare, which has struck a chord with the public, and their jobs guarantee shows a commitment to get people off the welfare bill and into employment. Polls have shown the electorate trust Miliband on the cost of living crisis more than Cameron, and that Labour are the favoured party of the voter at present. Nonetheless, opinion polls studying economic credibility show Labour lagging behind the Tories. The reason for this is the Tory narrative about the economic crisis of 2008.
If someone didn’t have much knowledge of politics and economics, and just tuned in to various Conservative Party speeches, they would immediately be convinced that the credit crunch crisis was caused by ‘reckless Labour spending’, ‘fiscal irresponsibility’, and of course ‘Gordon Brown selling our gold reserves’. The issue is, Labour have failed to effectively respond to these accusations. Everyday voters have been conned into believing Labour is at fault for the crisis, partly thanks to Cameron repeating week after week during PMQs that Labour is the party who ‘got us in the mess in the first place’, while the Tories are ‘cleaning up their mess’. They assert that their primary objective is to work down the deficit caused by Labour. Leaving aside the broken promises they have made on the economy and the deficit (‘balanced books by 2015’), why haven’t Labour, and particularly Miliband, responded by telling the voters the truth?
The 2008 credit crunch was caused by a global economic crisis, not a Labour economic crisis. The old mantra ‘America sneezes and the world gets a cold’ couldn’t be more apt. A US housing bubble burst and Wall Street crashed thanks to sub-prime mortgages gift-wrapped in derivatives being traded willy-nilly by irresponsible investment bankers. As we live in such an interconnected global economy, the repercussions of this of course reverberated around the world, Britain included. Nonetheless our electorate have been led down the garden path to believe that Labour caused our crisis. Ignoring the Eurozone crisis and the worldwide shocks that Wall Street triggered, the Tories and the right-wing press, particularly the highly respectable publication the Daily Mail, have brainwashed the people to believe that the economic downturn the UK suffered was down to reckless spending by the Labour government. This message has been repeated constantly by the government, and consequently it has become part of the household lexicon and caused voters to doubt Labour’s fiscal credibility.
The truth is a very different story, but one that Miliband has been reluctant to tell. Instead of fighting the perception of Labour’s economic irresponsibility by opposing the picture painted by the government and opening the eyes of the electorate to a novel concept in politics – the truth – he has chosen the route of claiming economic advisors have studied Labour’s plans and deem them fiscally credible, as well as promising not to raise day-to-day spending in government, and even pledging a budget surplus by the end of the next parliament. I see this as an error, and think Labour’s cause will be helped by reversing the Tory narrative about the economic situation we find ourselves in. So since Miliband won’t tell you the truth about Labour’s ‘reckless spending’, I will.
This myth about Labour’s fiscal irresponsibility is in utter confliction with true events. Little known is the fact that Labour ran a budget surplus throughout its first and into its second term in parliament. Throughout its second and third terms Labour did run a budget deficit, as public spending was required to improve health care and education, two areas neglected by previous Tory governments. It was promises of spending on the NHS and ‘education, education, education’ that got New Labour elected, so this deficit was clearly legitimised by the people. Labour succeeded in slashing surgery waiting lists, improving services and providing better hospital infrastructure. In education, New Labour made significant cash injections into state schools in an effort to increase social mobility. New buildings took place, better facilities, school specialisation was advanced and the gap between private and state schooling was reduced (nowhere near enough in my opinion, but progress was made). Even with this high level of public spending, the deficit Gordon Brown ran from the Treasury was relatively small, in fact, much smaller than the deficit presided over by John Major’s administration. The deficit was entirely manageable, and far from concerning. The economy was booming, and Labour provided us with the longest period of consecutive economic growth in British history. The deficit only inflated to alarming levels after 2008. More specifically, after the US led global economic crisis, Brown was forced to bail out the banks. Why? The human cost of the too-big-to-fail banking giants was far too high; we had to keep out economy alive. Shockingly, nationalising major banks put us into dangerous levels of debt.
Herein lays the hypocrisy of the Tories though. The reason Britain was affected so deeply by the global recession was because of the deregulation started by Thatcher. Financial deregulation started as dogmatic monetarism but soon became an area of political consensus, thus was embraced by Blair, advanced by Brown, and voted for by the Tories. If anything is to blame for Britain’s recession it’s not fiscal irresponsibility, but financial deregulation, a principle greatly projected and consented for by the Conservative Party. It is time to change the narrative. The electorate cannot go on adhering to the Tory rhetoric. The money Labour spent was paid for through taxation. This Conservative led government have in fact borrowed more in 3 years than Labour did in 13. Labour only worked up an unmanageable deficit when it had to bail out the banks due to financial deregulation, banker irresponsibility and a global crisis. These are the facts, and they must be asserted by Mr Miliband. If Labour can change the economic narrative, they can change the voter’s minds on their economic credibility, and secure electoral victory in 2015.