‘It’s the economy, stupid: time to regain credibility?’, Progress, 19 May 2015

Restoring Labour’s reputation for economic competence – or perhaps I should say resuscitating or even raising it from the dead – has to be the number one task for whoever becomes its new leader.  It may sound, and it may well be, a lot less sexy than, say, holding endless seminars on how to win back the so-called working class.  But, with all due respect to Blue Labour devotees who argue (not unreasonably, I should add) that identity politics matters too, it is the sine qua non of doing precisely that – indeed, of winning back voters of all classes and none.

There has been a lot of talk over the last week or so of the parallels between 1992 and 2010 – not all of them depressing for those on the centre-left.  After all, John Major’s Tory government, re-elected after unexpectedly crushing Neil Kinnock’s Labour ended up tearing itself apart over Europe and then going down just five years later to one of its biggest ever defeats.

But this forgets one big thing.  Europe may, indeed, have messed mightily with Major’s majority, but what really did for him was Black Wednesday. Britain’s exit from the Exchange Rate Mechanism blew the Conservatives’ hard-earned reputation for competence almost overnight – a political catastrophe that not even Ken Clarke’s near-textbook stewardship of the economy between 1993 and 1997 could do anything about.

Obviously, Black Wednesday was also something of a black swan – an event with massive impact that almost no-one saw coming.  By definition, then, it is not impossible that an economic shock that none of us can imagine right now could come along and do exactly the same to Cameron’s government as Black Wednesday did to Major’s.  But, for the moment it looks unlikely.

That means that Labour’s recovery of its reputation for economic competence is going to be a matter of blood, toil, tears and sweat – a war of attrition than one of movement.

Whether Labour can win that war depends partly, of course, on whether it can capitalise on the government’s failings.  It is easy to forget that Blair and Brown did not reduce the Major’s Tory rabble to rubble just by offering the country what Jon Cruddas would call a more convincing ‘national story’, but by pounding them day-in-and-day-out with relentlessly negative attacks.  By the same token, it was not simply the ‘white heat of technology’ that won it for Wilson.  It was his merciless pillorying of a prime minister who had once been unwise enough to make a self-deprecating joke about needing matchsticks to help him get his head around tricky economic problems.

Attack will only get Labour so far, however.  Ultimately, restoring its reputation will depend on its own offer.  Quite what that is, and how it differs from Ed Miliband’s, will need working out.  But, whatever it is, it needs to be worked out quickly.  Fearing hostages to fortune, and wanting to keep as much of the labour movement as possible on board for as long as possible, the two Eds only came up with something vaguely coherent a year or so out from May 2015.  It turned out to be way too little – and, just as importantly, way too late.

Nor was the two Eds’ offer, or indeed their critique of what the Conservatives were doing, ever couched in words that made easy, common sense to most voters.  Where, for instance, was the Labour equivalent of George Osborne’s masterly ‘maxed out the nation’s credit card’?  And what could it be between now and 2020?

Finally, whoever becomes leader needs to decide what he or she is going to do and say about the accusation which that phrase so cruelly embodies.

It is not easy: it is clearly economically illiterate, and also politically risky, to admit that the last Labour government ’overspent’ and somehow got us into the mess that in reality was caused by a global financial crisis and the need to avert what might otherwise have been a full-blown depression.

Sadly, however, that is what far too many voters now believe.  And the chances of getting them to believe anything else at this stage seem remote in the extreme.  Trying to do so is tantamount to telling them that they are wrong and you are right – never a great way to win elections.

Maybe, then, to quote Blair’s public opinion guru, Philip Gould, it is time to ‘concede and move on’.  There cannot be many of us who, in order to repair a relationship we really care about, have never said sorry even though we weren’t really sure that we were ever really in the wrong.

For those who can’t bear the thought of reducing high politics to the way we conduct our private lives, we should end by returning to the prime minister who first coined the phrase ‘blood, toil, tears and sweat’.

Winston Churchill, addressing the Commons after taking on the top job after the debacle in Norway in May 1940, went on to say something that, seventy-five years later, should resonate with every member of the Labour Party. ‘You ask’, he intoned, ‘what is our aim? I can answer in one word: Victory. Victory at all costs. Victory in spite of all terror.  Victory, however long and hard the road may be. For without victory there is no survival.’

[Originally published at http://www.progressonline.org.uk/2015/05/19/its-the-economy-stupid-time-to-regain-credibility/]

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