Cruddas poll shows opposition to austerity

Jon Cruddas has today argued, as part of his independent inquiry into Labour’s election loss, that ‘the Tories didn’t win despite austerity, they won because of it. Voters did not reject Labour because they saw it as austerity lite. Voters rejected Labour because they perceived the Party as anti-austerity lite.’

The actual title of the LabourList article, and the political thrust of the accompanying Patrick Wintour piece in The Guardian, is ‘Labour lost because voters believed it was anti-austerity’.

As with others trying to assert this political line, Cruddas is engaging in an impressive feat of political spinning to reach this conclusion based on the questions and the findings so far published.

The question that ‘we must live within our means so cutting the deficit is the top priority’ is the kind of leading question that leads people to mistrust polling. But even taken at face value, broad agreement with such a statement does not lead to the conclusion Labour lost because people believed it was anti-austerity. Lord Ashcroft polling on the day of the general election produced results that people wanted an end to cuts, and did not believe any further should be made.

It is the article – rather than the independent inquiry – that reveals the Labour front bench still believe the deficit is the key issue, despite running a losing election campaign focused on it. They are as yet unable to break the mould set by the Right and provide a new focus for debate. Other questions include, ‘I am most likely to vote for the political party that redistributes wealth from rich to poor’, ‘I am most likely to vote for the political party that puts my financial interests first’ and ‘the economic system in this country unfairly favours powerful interests’.

Cruddas does not indicate that the panel was asked anything as simple as, ‘Do you believe Labour lost because it was anti-austerity?’ or if Labour were trusted to improve peoples’ living standards at the same time as they were saying they would make deep spending cuts.

From the data published, he has chosen a particular analysis, although one I think is difficult to substantiate. Alternatively, and based on his findings, I believe Labour should show how the government’s economic agenda, which can be summed up as austerity, ‘unfairly favours powerful interests’ and ‘redistributes wealth from poor to rich’, which the panel suggests is unpopular – and convince them how it would approach the economy differently to the Tories.

I would argue that these results demonstrate the need for a clearer anti-austerity and more progressive redistributive agenda from Labour.

Labour need to show it is putting individuals financial interests first – that it will improve peoples living standards – and that it will do so with by investing in a growing, sustainable economy that delivers good jobs, higher pay, better public services and transport as an alternative to the Tories insecure, low pay and sub-Living Wage, and cuts.

What Cruddas has effectively demonstrated, and where I would agree with him is that Labour’s message on austerity and fiscal responsibility was not very clear. Labour made good individual pledges in this year’s election, largely those that emphasised intervention into failing markets, but they were lost in a media message that focused on the deficit and – lest we forget it, or fall for the line Labour ran an anti-austerity opposition over the past five years – frontbench repetition of the need for cuts.

However, with his interpretation of the panel findings and their early but partial publication, Cruddas leaves himself open to criticism he has already reached a conclusion for his ongoing inquiry.

Jeremy Corbyn’s alternative to austerity

JeremyJeremy Corbyn’s entry into the Labour leadership race opens the debate about the party’s future, by offering serious opposition to the Tories austerity agenda and a positive vision for public services.

Since Labour’s general election defeat, the Labour right has dominated analysis in the media, incomprehensibly arguing the party’s campaign was ‘too left’.

The first weeks of the Labour leadership debate have since followed the same pattern, with candidates arguing Labour spent too much in office and failing to oppose the Tories planned cut in the benefit cap.

Jeremy Corbyn’s announcement of his candidacy will see the Tories ideological austerity agenda challenged for what it is – a political rather than economic mission which demonises public spending and requires the poorest in society to pay for the banking crisis, while the wealthiest continue to benefit. Austerity has forced down wages in real terms in both the public and private sector for seven years – affecting the majority of the population.

Jeremy has also reached out to those campaigning against austerity in Europe – particularly in Greece – where the anti-cuts movement took power earlier this year.

His campaign offers an alternative to austerity and those struggling with its effects.

For councillors facing tough decisions on services due to grant reductions from central government to trade unionists who face further real terms cuts to public sector pay to those benefit claimants struggling with rising rents and low wages or migrants demonised by a divisive media and resurgent right, there is a clear alternative on offer and being articulated.

Jeremy stands for public intervention and investment to deliver quality public services – whether that is building new council housing, ending the wasteful private sector role in schools and hospitals, running rail franchises in public hands, delivering free university education, funding a carbon-free energy future and ending the costly Trident replacement programme.

After the election defeat, it would be perverse to ignore the overwhelming popularity of many of these policies in public opinion polling.

Labour MPs have a privileged role in shortlisting candidates, but this is just the start of the debate, not the end, and so is not the time to narrow party’s members discussion through their nominations.

Jeremy’s candidacy will encourage other candidates to consider and discuss austerity and shape the party’s new narrative throughout this parliament.

For Labour members – including 40,000 who have joined since the election – Labour MPs must back Jeremy Corbyn for an inclusive debate. For the wider public, Jeremy must be allowed to stand, if we are serious about delivering a brighter future for those suffering under austerity.

 

 

 

No acceptance of austerity in Tory win

By Mike Hedges, Vice-Chair, Labour Assembly Against Austerity

The General Election result was not an endorsement of austerity but was a stunning Tory tactical success. The Tories adopted a policy of defending key marginal seats against Labour and UKIP and attacking in Liberal Democrat seats. The strategy worked and lead to a Tory majority government for the first time since 1992. This was done on a swing of 0.8% to the Tories, with Cameron returned as Prime Minister with 36.9% of the vote, the lowest share in history. The coalition government meanwhile suffered an overall loss of 14.4%, but remarkably the Tories ensured that all of this loss was suffered by the Liberal Democrats. This represents the biggest ever loss by a governing party.

But despite this rejection of austerity amid the biggest ever decline in living standards, the Labour Party still lost seats and lost the election. Labour was unable to make any inroads into their top target seats from the Tories and even managed to loss seats to the Tories. The Tory tactic of focusing all of their resources on defending their most vulnerable seats worked because Labour did not inspire the working class vote with a real alternative. Labour’s natural supporters were unimpressed with the austerity-lite alternative offered by the Labour Party. The economic policies just didn’t make sense and left the Labour unable to attack the Tories economic record.

In May 2012 Labour had a commanding poll lead over the Tories, even allowing for shy Tories. Then Labour shifted to an austerity-lite agenda adopting Tory spending plans for the 2015/17. From this point on the Labour lead was eroded. Although Labour announced changes to the NHS, Bedroom Tax and Housing, this was all done within an austerity-lite agenda and all talk of growth through investment was dropped.

Austerity is massively unpopular. The Tories were forced during the campaign to make promises relating to new areas of spending, particularly around the NHS and public services, whilst refusing to say where the £12 billion welfare cuts was coming from. They got away with refusing to specify any real areas of cuts, including spending cuts to local government. This was a failure of Labour and contributed massively to their failure to win an outright majority.

Labour made a massive mistake trying to take on UKIP on immigration. The controls on immigration mugs were a disaster and shamefully immigration was a central theme of Labour’s election campaign. It was noticeable how the Tories avoided talking about immigration and never mentioned quotas, unlike the Labour Party and UKIP. The Tories recognised that any talk of immigration only boosts UKIP.

The Blairite right wing can hardly contain itself at the glee it feels at Ed Miliband losing the election and resigning as leader. They paint a picture that Ed was a puppet of the Trade Unions and adopted policies that were far too left wing for the British people. They say that Labour needs to move back to the centre ground and win back middle England. Yet this is from the same people who presided over losing five million Labour voters from 1997 -2010 whilst Ed Miliband increased Labour’s vote by 600,000. A move back to the New Labour project and a more pro-business, austerity agenda is not the answer.

In Scotland the Labour Party was wiped out by the SNP whose anti-austerity, anti-Trident message resonated with voters. In the Independence vote, every ward in Glasgow voted for independence, not because they suddenly became ardent Nationalists, but because they wanted an end to austerity and cuts in living standards. The SNP and independence seemed to offer a way out for working people. Instead of taking note of the independence vote, the Labour Party carried on portraying itself as fiscally responsible and pro-austerity.

Scotland was lost last year when Labour went into the independence referendum in alliance with the Tories. In alliance with a party that only had 1 MP in Scotland, needless to say the consequences of that alliance endured, it’s now Labour, as well as the Tories and Liberal Democrats that have only 1 Scottish MP.

The solution of electing Jim Murphy as leader ensured Labour’s defeat. The continuing pro-austerity, pro-Trident message meant Labour was outflanked from the left by the SNP. A move to the right will ensure that Labour never regains those lost Scottish seats. The 50% share of the vote for the SNP in Scotland was higher than the 45% for independence. The Scottish people voted against austerity and trusted the SNP to do that.

The Tories have been elected with a historically low majority. They face enormous challenges over Europe, an escalation of their austerity agenda and a racist offensive. They were largely unchallenged over their economic plans and the scale of the cuts could potentially ignite a resistance greater than in the last parliament. They raised expectations over spending that they are incapable of carrying out. Over Europe, an in-out referendum will not be enough for UKIP and the Tory right who will demand an exit, and the Tories have no answers over immigration over than to further fuel racism.

There is a massive opportunity for the Labour Party to exploit these Tory weaknesses by becoming an anti-austerity, pro-growth party. The Tories are still deeply unpopular and detested by a majority of the population. We need to remember that austerity was rejected by the electorate, despite what the Blairites argue. Ed Miliband accepted austerity as the way forward which is why he lost the election, moving to the right will not win the 2020 election for Labour.

Looking forward the Tories won this election by executing their tactical plans not by the electorate endorsing their austerity plans of moving even more wealth to the rich. The Tories go into the next five years with spending promises they cannot fulfil with massive cuts to welfare spending. They are reduced to their heartlands and face internal conflict over Europe and immigration. Whether the Tories are successful will largely be determined by the level of struggle and if there can be a coming together of the progressive forces against austerity.

New MPs urge end to austerity

Ten newly-elected first-time MPs have written to The Guardian at the outset of the leadership election to state that Labour needs to ‘challenge cuts’ and set out an ‘alternative to austerity’ if it is to win back the five million votes lost since 1997.

LETTER:

Having arrived in Westminster as newly-elected Labour MPs after speaking to tens of thousands of voters during our election campaigns, we know how important it is for the future of our Party to move forward with an agenda that best serves the everyday needs of people, families and communities and that is prepared to challenge the notion of austerity and invest in public services.

Labour must now reach out to the five million voters lost since 1997, and those who moved away from Labour in Scotland and elsewhere on 7 May, renewing their hope that politics does matter and Labour is on their side.

As we seek a new leader of the Labour Party, we are needing one who looks forward and will challenge an agenda of cuts, take on the powerful vested interests of big business and will set out an alternative to austerity – not one who will draw back to the ‘New Labour’ creed of the past.

Now is the time Labour needs a leader who’s in tune with the collective aspiration of ordinary people and communities across Britain, meeting the need for secure employment paying decent wages, homes that people can call their own, strong public services back in public hands again and the guarantee of a real apprenticeship or university course with a job at the end of it. From restoring Sure Start to providing dignity and a good standard of living in retirement, these are the aspirations key to real Labour values today and will re-engage people across our country in the years to come.

We look forward to engaging in the debate surrounding the Labour leadership in the weeks ahead to secure our Party as being best able to meet the challenges faced by ordinary people at this time.

SIGNED:

Richard Burgon (Leeds East)

Louise Haigh (Sheffield Heeley)

Harry Harpham (Sheffield Brightside and Hillsborough)

Imran Hussain (Bradford East)

Clive Lewis (Norwich South)

Rebecca Long Bailey (Salford and Eccles)

Rachael Maskell (York Central)

Kate Osamor (Edmonton)

Cat Smith (Lancaster and Fleetwood)

Jo Stevens (Cardiff Central)

Austerity: The Election Briefing

AusterityAusterity: The Election Briefing

With the launch of party manifestos and the TV Leaders debate, the Tories, Liberal Democrats and UKIP have promoted a number of myths about austerity which should be dispelled.

In this short simple election briefing, we take on three of the key myths which may appear on the doorstep.

 

Myth 1

“Labour’s excessive public
spending wrecked the
British economy.”

Reality

Labour didn’t spend enough. For most of Labour’s time in office (1997-2010) the share of the economy taken up by both government spending and taxes was lower than under Thatcher.

The recession was kicked off by a private sector financial crisis – beginning with banks in the US and spreading to Britain via its banks, which were then bailed out with huge public funds.

The collapse in private sector investment was the main cause of the recession and remains the main cause of current stagnation. Increases in government spending and investment are still necessary to kick start a real economic recovery.

Government spending only went up after the financial crisis, firstly on the bail outs and subsequently as tax revenues fell and unemployment and poverty rose, welfare payments increased, during the recession.

The economy was growing in the last year of the Labour government (2009). But it fell back after the Tory Lib Dem coalition started to implement cuts.

The Tories claimed austerity would eliminate the deficit. It has not and it will be about £90bn this year. Government debt has soared under austerity.

The last year of the New Labour government in 2009 recorded a level of ‘Net Debt excluding banks’ of £884bn. The same measure of debt was £600bn higher by the end if 2014.

 

Myth 2

“There is no money left.
Austerity is necessary to
ensure prosperity in the future.”

Reality

There is money to invest. Investment could be increased by £50bn per year for 10 years to create high-paid jobs and restore public services.

Big business is sitting on a cash mountain of over £750bn. Bills – for food, fares, energy and rents are all rising. This means big companies increasingly have more of ordinary people’s money.

The Tory/Lib Dem austerity has created another unsustainable bubble, making a minority much better off: primarily landlords, bankers, the energy companies, the rail franchisees and so on.

With private investors refusing to invest (effectively on strike), public investment in key areas like housing, transport and hi-speed broadband is the only way to boost productivity and tax revenues.

Large infrastructure projects would provide an economic boost of nearly £3bn for every £1bn invested.

 

Myth 3

“Immigrants are a drain on
the economy and are
undercutting wages.”

Reality

Both claims are false. Levels of Immigration tend to be lower in poorer countries/cities and higher in richer ones. As New Zealand’s Prime Minister John Keys has said, “immigration is sign of economic success”.

Nearly all of the dozen countries where living standards are higher than Britain (they have a higher per capita GDP) they also have higher levels of immigration.

Immigrants make much lower use of benefits and public services because they overwhelmingly come to work. They are younger and better qualified than the average person. They are more likely to be working and paying tax.

There is no evidence that migrants increase or lower average wages. Real wages have fallen by 8% since 2008 mainly due to pay freezes.

Ending public the sector pay freeze (which after inflation has cut wages), introducing a living wage and greater trade union rights are the best way to protect all workers.v

Labour should end Osborne’s austerity

George Osborne’s latest Budget includes the threat to implement greater austerity measures in the next Parliament, than has been done in any single year to date. It is important to correctly identify this ferocious plan.

The average annual change on public sector current expenditure over the course of this Coalition government has been 2.4% (Table 4.18, OBR Economic and Fiscal Outlook) per year. The announced cuts for 2015-16, starting ahead of May’s election, were somewhat lighter at 1.4% but in the next two financial years following that, 2016-17 and 2017-18 Osborne has pencilled in cuts of 5.8% and 5.4% respectively.

These are ferocious cuts and Osborne for electoral reasons refuses to identify where they will be delivered. He may also struggle to identify them economically and politically – the low-hanging fruit of ‘easy cuts’ such as the switch from RPI to CPI have already been made.

Osborne’s planned cuts represent a significant threat to the living standards of the overwhelming majority in Britain and should be opposed at every turn.

But there is also a confusion that has been introduced following the commentary from the Institute for Fiscal Studies who said, ‘Our latest estimates suggest that Labour would be able to meet its fiscal targets with no cuts at all after 2015-16.’

This arises because the assessment of the budget deficit is slightly better going forward and because Labour has made less onerous pledges on the deficit, and has not copied the Tories’ disastrous intention to cut public investment even further.

But this still means that the current intention is to match Tory plans in 2015/16, which are further cuts of  1.4% in current public spending in the 2015-16 financial year, beginning this week.

The IFS assessment is itself based on a key fallacy promoted by all supporters of austerity. In effect, they argue that cuts work. But they do not. Osborne said he would have eliminated the ‘structural deficit’ by now and be close to eliminating the actual deficit. But the OBR says the deficit will be £90bn in this financial year.

The Tories inherited a deficit of £153bn because of the crisis. But the fall in the deficit has almost nothing to do with austerity policies. Of the total £63bn decline in the deficit the overwhelming bulk has come from falling debt interest payments and the cuts to public sector investment. The former is a product of global economic weakness and QE, while no-one, not even government ministers argue that cutting investment will provide an economic benefit (and are not strictly part of austerity, which is meant to focus on government current spending).  Only £10bn of the fall in the deficit arises from austerity measures, just £2bn a year.

A Labour government implementing milder, less extreme austerity measures would quickly find the same result as the extremist Tories; that the cuts are not leading to a lower deficit because they produce renewed economic weakness. It is simply that the effect would be milder. If the priority is the deficit and the instrument is cuts, Labour will find itself returning again and again to cuts.

The confusion on this matter seems to be nearing an extreme with lawyerly arguments that Labour is not going to implement cuts at all, or that where it is, it is only because they are inescapable under the pressure of the fiscal timetable. This is nonsense.

Osborne will not implement any measures ahead of May 7th for fear of the voters learning about them. Labour could take a leaf out of the Tory book, and have an ‘emergency budget’ in June to revive the economy through increased investment and a drive to lift living standards.

To take just one example, the British government can now borrow for 10 years at interest rates of less than 1.5%. At the same time the OECD estimates that the public return to investment in tertiary education is 35%. The government could literally borrow to expand higher education, grow the economy and reduce the deficit at the same time.

The same logical applies to a host of economic sectors. Austerity is not just bad politics, limiting Labour’s advantage over the Tories it is also very bad economics. Breaking with it would not only ensure a Labour majority government but also produce a genuine recovery that lifts living standards for the overwhelming majority.

 

By Michael Burke