Events | 2009.12.12
Plan a 'make and do' Britain and Labour could flourish | Jackie Ashley
Instead of arguing over the nature of cuts, No 10 should offer a positive vision of an economy less reliant on the bankers
The game is back on: Labour tails are twitching. After Gordon Brown \'s better Commons performance last week, and with Alistair Darling\'s pre-budget report this week, it\'s a good time to review the strategy. At first sight, it seems as if we are back to terribly old-fashioned politics. Today George Osborne said Labour was "lurching to the left"; the Treasury and No 10 were briefing that the Tories "are lurching to the right". Ho hum.
We probably have five months or so of politics before the general election, and a political climate most people have never experienced before. The recession may be ending, but the economy is horribly fragile. Those most blamed for causing it – the bankers – are sticking their snouts back in publicly funded troughs, to the outrage of many voters. But the political class is loathed for its freeloading behaviour. The mood is extremely volatile; the pre-budget report on Wednesday will be a truly important moment.
One thing can be quickly dismissed. Simple-minded class war won\'t run for long, or with enough people. Having a good laugh at Old Etonian toffs is not entirely pointless. It hugely amuses many Labour MPs and, more to the point, clearly enrages David Cameron .
The Tory papers now expressing outrage at "class war" by the prime minister are the ones regularly sneering at Labour politicians for being Scots or even Glaswegian trade unionists. It\'s true that children can\'t choose their parents, or where they are sent to school. It\'s equally true that they can\'t choose where in the country they\'re born. A little consistency would be in order. But no one I\'ve spoken to, including in No 10, thinks mere Eton-bashing is a fruitful way to spend the next few months.
We are seeing a real confrontation between two kinds of power. One is elected parliamentary power, represented by the Treasury team and No 10. The other is the power of finance capital. London is a citadel for both kinds of power, British-state and global-economic. So it\'s not surprising that the confrontation is happening here.
The trigger for the fight is the gross bonus culture. The bankers are trying to hold Darling to ransom. If he doesn\'t allow them barrowloads of cash, they\'ll bugger off. And the ones from the Royal Bank of Scotland will go to rival banks, leaving the taxpayers\' assets to melt away. Darling says he won\'t be held to ransom and the Treasury is privately talking up taxes to punish greedy bankers. But, as he acknowledged, it\'s a fine decision, because he cannot afford RBS\'s investment banking division to collapse. He needs to sell the bank. It says it needs to be fattened up for sale. It isn\'t as easy as public anger demands it should be.
On this, embarrassingly for both parties, Tories and Labour sound fairly close. Both say the big bonus culture has to go. Neither is terribly convincing on the detail. Yet if the financial crash means anything, it means that political regulation of international banking has to be more effective.
Yet the bigger hidden agreement between Labour and the Tories is over spending cuts. Every piece of briefing I\'ve had over the weekend insists this is not so. Labour people argue that the Conservatives would slash frontline services while stuffing money into the richest 2% of estates; that Osborne and Cameron would turn weak recovery into a double-dip recession; and that Labour investment in youth unemployment schemes and key infrastructure projects creates a huge gap between the parties.
The Tories would cut deeper and earlier. Looking around, I can see plenty of shops still going under, and anything that risks the recovery worries me. Yet the reality is that both parties would, in power, be making similar cuts. They can\'t abolish welfare, or unemployment benefit, or disband the army, or close hospitals and prisons. So they would be looking at similar hard choices, over Trident and quangos, cutting civil service numbers and selling off any asset that isn\'t nailed down. The Tories would do it zestfully and Labour dolefully, but they\'d both have to do it.
Thus, when we hear about lurches to the left or right, we should check the calendar. This is pre-election talk, which tells us about political instincts and tactics but says little about what kind of country we would be living in a few years hence. Are we therefore fated to replay stale politics? Is it going to be nothing but mud-slinging about Eton and toffs?
That would be disastrous for Labour, despite a slight narrowing in polls. Why? Because it would make the election about an instinctive choice as to whether people liked Brown more or less than Cameron, and whether they thought Labour had been in power long enough. And we know how that one would end.
Luckily, we\'re beginning to see another strategy emerging from the Treasury and No 10. It\'s one that tries to answer the question: how will we British earn our living? Instead of living on drippings from the City, it talks of the need for a new engineering and design age, based on green technologies. It\'s about big regional projects for wave turbines, new power stations, electric cars and railways. It\'s about investment, therefore, including in education.
Well, you may say, that\'s a bit rich after all those years of Labour living so easily in the City\'s shadow. But big events like the banking crash are meant to produce new thinking, even a change of heart. When ministers look at economies like the French, which has kept its hi-tech engineering base, there\'s a new sensation – jealousy.
Could economic rethinking be what carries Labour towards the election in better shape? That\'s a lot more plausible than Eton-bashing. The Conservatives are not well placed to respond. They are far closer to the City and its wilder shores. As visceral anti-Europeans they are less likely to learn lessons from the eurozone and to proclaim them if they do. And the memory of the Thatcher and Major de-industrialisation remains strong.
A campaign to rebalance the economy, returning us to a "make and do" Britain, ought to be central to the pre-budget report and what follows next year. Measures to help the low-carbon economy, such as encouraging electric cars or wind turbines, should be a top priority. This has far more traction than the nature and timing of cuts. Why? Because there is a glimmer of optimism about it. It\'s about something Labour has found itself almost unable to say over the past 18 months. It\'s about learning from mistakes to build a better future.
For more information, please visit
http://www.guardian.co.uk/commentisfree/[...]ives-economic-policy-elections
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