Seumas Milne writes:
If you’re in a fix, create a diversion. That will be the
watchword of David Cameron’s Tories next week. George Osborne may have presided
over the weakest recovery on record.
He may have spectacularly missed his
fiscal targets. The deficit may be growing again. Real wages may have fallen
for the longest period since the 1870s.
But Ed Miliband will certainly be the
man in the frame at their Birmingham jamboree.
The Labour leader even forgot
to mention the deficit in his conference speech, the Conservatives
will hoot – tax cuts at the ready – so Labour can’t be trusted with the
nation’s finances.
And fresh from bringing Britain to the brink of breakup,
Cameron will play the English nationalist card as his winning ace. Miliband
isn’t quite one of us, the dog whistle will have it.
The media has been playing
warm-up act all week. Labour has “lurched to the left”, the Tory press
complained, yet again. Miliband is pursuing a “core vote” strategy. He must
return to the “centre ground”.
The Telegraph even reckoned that £2m
houses – which Miliband plans to tax to pay for more doctors, nurses
and home care workers – can be “relatively modest”.
In the real-world Labour conference,
Labour’s leader lurched nowhere. He was a picture of studied caution.
Sure,
there were plenty of commitments welcome to most people across Britain, from a
boost to the minimum wage and restoring the 50% top tax rate to scrapping the
bedroom tax and clamping down on zero-hours contracts.
And Miliband’s attack on
the grip of the “privileged
few” would certainly never have been uttered by Tony Blair in his
New Labour pomp.
But there was little evidence of
the determination to break with the past seen in his earlier Labour
conferences, when Miliband denounced
predatory capitalism and
promised an energy
price freeze and
compulsory purchase of unused developers’ land banks.
Instead, Ed Balls’s
pledges of undying austerity and 1990s-style New Labour policy fixes set the
tone. Eight months before the general election, the “shrink the offer”
merchants are back in the ascendant.
The timing of that shift, though,
could hardly be more jarring.
Last week nearly
half the Scottish people voted for independence in an insurgent campaign fuelled by
rejection of austerity, privatisation, illegal wars and the grip of the
Westminster elites.
Working class and Labour voters went for yes in droves. Those same sentiments are of course present among
traditional Labour voters across Britain. The question is: who will represent
them?
In England, unless championed by Labour, they can just as easily be
harnessed by Ukip – or used to justify a Tory constitutional sleight of hand
that could derail a Labour government and leave Liverpool and Newcastle at the
mercy of a Farageist southern suburbia.
If any New Labour nostalgic still had the idea that its
core vote had nowhere else to go, Scotland has surely demolished it for good.
The platform Miliband set out in Manchester this week could only be regarded as
a core vote strategy from a particularly sheltered metropolitan vantage point
that refuses to face up to how most of the population actually live and think.
How is taxing hedge funds, mansions and tobacco giants to
protect the NHS, used by the vast majority, a core vote policy exactly?
Or
reducing taxes on small businesses and strengthening the rights of the
self-employed?
But after losing 4 million working-class votes between
1997 and 2010, it would be a suicidal Labour leadership that didn’t learn the
lessons.
Without its core vote, at the heart of an alliance of working-class
and middle-class voters, Labour can’t win.
But the lesson drawn by Douglas
Alexander, Labour’s election strategist, from the political establishment’s
near-death experience north of the border is not so much to woo working-class
voters but to appease
the kind of corporate giants that frightened
Scots into the no camp
with threats of closures and job losses.
Along with Ed Balls and Chuka Umunna, Alexander has
formed a kind of corporate praetorian guard around Miliband to pacify the City
and CBI and rein in the Labour leader’s instincts for building a new economic
model in a post-crash world.
The shadow chancellor, who can’t be doing with new
models, went a stage further this week.
Not only did he promise five more years
of austerity, he pledged to cut child benefit in real terms for another year
and dropped any commitment to extra capital investment.
Activists reported that the child
benefit announcement, designed to demonstrate fiscal rectitude, went down especially
badly on the doorstep in the Heywood and Middleton byelection campaign – where Ukip
is looking like a potentially serious challenger to Labour next month.
But not only do Balls’s austerity gestures fail to
appease Labour’s opponents while alienating its natural supporters still
further.
They also ignore the disastrous record of austerity in Britain and
across Europe, even on its own terms.
Osborne’s four-year squeeze delivered
three years of recession and stagnation, a forecast deficit of £75bn instead of
a balanced budget and the longest fall in living standards since the 19th
century.
Unsustainable growth has only been achieved by pumping up
housing credit, while stagnating private investment and austerity have
generated a productivity crisis and an epidemic of low-paid, insecure jobs.
Only the public sector can now fill that gap, taxing the corporate cash
mountain and using publicly owned banks to deliver the investment the private
sector won’t make.
But that would mean Miliband
taking his still fragile plans for new forms of intervention and public banking
further, instead of reverting to business as usual.
Without radical economic
reform, as François
Hollande’s French socialist government has shown, austerity can only
pave the way to political failure.
For all the chorus of sceptics and Miliband’s dire
personal polling, Labour could clearly still be propelled into government next
year on the back of falling living standards and revulsion at Cameron’s Tories.
Which only makes it more urgent that the Labour leader brings his corporate
guard to heel – and offers his party’s lost supporters change on the scale they
desperately need.
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