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.

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)

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

Lessons for Labour from Syriza’s success

As opposition to austerity gathers momentum across Europe, there is evidence the same mood is taking hold in the UK.

Political parties in Greece, Spain and Ireland – three of the countries suffering from the worst austerity measures – have risen to prominence on the back of unambiguous opposition to austerity – at the expense of traditional social democrats.

There are clearly lessons for Labour to learn from Syriza’s success.

Polling suggests that opinion in the UK is turning against austerity and that Labour would benefit from demonstrating it is part of that movement.

A poll by YouGov for The Times conducted on 26th and 27th January found 57% of swing Labour voters would ‘prefer a Labour party that commits to spending more money on the NHS and other public services and does not make the deficit a priority’, while only 15% would prefer a Labour party that is committed to tackling the country’s deficit through spending cuts and tax increases.

On the same day, the 26th January, a group of 15 Labour MPs published a statement urging the party to offer an alternative to austerity, which read,

‘There is an alternative way out of endless austerity. We need public investment to kickstart the economy out of faltering growth and to generate real job creation and rising incomes.’

And later in the week, a LabourList readers poll found 83% backed the MPs anti-austerity statement – with only 13% disagreeing, demonstrating an anti-austerity mood amongst party activists in tune with the party’s swing voters.

As was noted on the site, ‘This reflects a general trend among the public for renationalisation of the railways and, more recently, support for anti-austerity policies. The substantial support for such policies, arguably, reflects a desire from grassroots Labour activists to move towards the party’s traditional base – further to the left of the party currently stands.’

The explosion of opposition to austerity follows Syriza’s stunning victory in the Greek election on Sunday 25th January.

Syriza took 36% to win the election while PASOK, the traditional social democrats slumped to 5% from a high of 44% in 2009, having overseen the implementation of unpopular austerity measures.

The following Saturday 31st March saw around 100,000 people demonstrate in Madrid in support of the anti-austerity Podemos party, who now lead Spanish opinion polls having only been formed in January 2014.

And on the same day, thousands demonstrated in towns across Ireland against the proposed introduction of water charges. Sinn Fein, who have consistently opposed austerity, are now challenging to win the next election, with the Irish Labour Party’s support halved from their high of 18% at the last election.


That is why Labour Assembly Against Austerity has organised the meeting:

What lessons can Labour learn from Syriza’s success?

  • 6.30pm
  • Wednesday 25th February
  • Unite House, 128 Theobald’s Road

Speakers:

  • Sarah Cook (Unite)
  • Jeremy Corbyn MP
  • Manuel Cortes (TSSA)
  • Peter Hain MP
  • Owen Jones (Guardian)

Chair:

  • Kate Purcell (UCATT)

Get involved:

 

Labour MPs urge alternative to austerity

A number of Labour MPs have released a statement calling for an alternative to austerity and spending cuts – as reported on LabourList.

 

1. An alternative to the continuation of austerity and spending cuts till 2019-20

All three main parties, tragically, seem to agree that deep spending cuts must continue to be made until the structural budget deficit is wiped out in 2019-20, even though wages have already fallen 8% in real terms, business investment is still below pre-crash levels, unemployment is still 2million, the trade deficit in manufactured goods at over £100bn is now the largest in modern history, and household debt is now over £2trillion and still rising.

The Tories want to continue with these cuts because it gives them political cover to achieve their real objective which is to shrink the State and squeeze the public sector back to where it was in the 1930s.

It isn’t even as though the deficit is being reduced by these savage cuts. Because the reduction in the government’s tax revenues as a result of shrinking incomes exceed the spending cuts, the deficit (which is still nearly £100bn) is likely to rise, not fall, in 2014-15 and in future years.

There is an alternative way out of endless austerity. We need public investment to kickstart the economy out of faltering growth and to generate real job creation and rising incomes.

It can readily be funded. With interest rates at 0.5%, a £30bn investment package can be financed for just £150m a year, enough to create more than a million real jobs within 2-3 years. And even without any increase in public borrowing at all, the same sum could equally be funded either through the two banks which are already in public ownership, or through printing money (quantitative easing) to be used directly for industrial investment rather than for bond-buying by the banks as hitherto, or through taxing the ultra-rich by a special levy.

2. Returning rail franchises when expired to public ownership rather than subjecting them to competition

The essence of rail reform must be to reverse fragmentation, to reintegrate the system under public ownership, and to run it in the public interest. At present Britain has the highest fares in Europe. The additional costs of privatisation to public funds are estimated at more than £11bn, or around £1.2bn a year, so that the costs to the taxpayer are now three times as much as under British Rail.

Since 2010 rail fares have increased 25%, yet at the same time more than £200m a year has been paid out in dividends to shareholders or overseas state-owned rail companies which now hold two-thirds of the current rail franchises. Over 80% of the public want the railways re-nationalised, which must include a significant proportion of Tories.

The most obvious and simplest way to achieve this is by letting the rail franchises expire and then taking them back into public ownership at no cost whatever to the taxpayer. To subject them to a public bidding competition with private bidders is not only wholly unnecessary but sends out the wrong signals, as though we’re not confident of our own ideology. The Tories certainly didn’t offer a competitive option when they forced through privatisation!

Anyway, the franchise process, so far from being economic, encourages the gaming of wildly optimistic passenger number projections and this, combined with huge legal contract complexity which is bureaucratic and wasteful both in time and money (except for the lawyers and accountants), has led in the past to franchise failures and operating chaos, most notably on the East and West Coast lines. From past experience public ownership has consistently worked better, and we should not gratuitously throw obstacles in our own path in getting there.

3. The need for the restoration of collective bargaining and employment rights as a check against excessive corporate power

When the Thatcher government came to office in 1979, 82% of workers in the UK had their main terms and conditions determined by a union-negotiated collective agreement. The latest figures now show that the coverage is down to just 23%. One very significant result is that the share of national income going to salaries and wages has fallen dramatically from 65% in 1980 to 53% in 2012 – a loss to employees of some £180bn!

This has happened partly from the collapse in trade union membership from 55% of the workforce in 1979 to 23% in 2012. But it has also happened partly as a result of the anti-trade union laws introduced in the 1980-90s and partly because the state has withdrawn support for collective bargaining as part of the free market ideology of de-regulation of all markets, including the labour market. It is somewhat ironic however that de-regulation of the labour market requires the tightest regulation of one of the key players in that market, the trade union movement.

An incoming Labour government should choose to enhance the role of trade unions because trade union rights are human rights, a trade union presence creates more just and equal workplaces, and trade union collective bargaining is more redistributive than statutory wage setting and will assist on the road from austerity. We should therefore actively promote sectoral collective bargaining and strengthen the rights of trade unions to recognition, and of their members to representation.

Diane Abbott
Dave Anderson
Katy Clark
Jeremy Corbyn
John Cryer
Fabian Hamilton
Kelvin Hopkins
Ian Lavery
John McDonnell
Michael Meacher
Ian Mearns
Grahame Morris
Linda Riordan
Steve Rotherham
Jim Sheridan
Chris Williamson