Economy//

Labour is reclaiming the mantle of radicalism

Written by: Jeremy Cliffe on 25 March, 2012
Filed under Economy

‘Radical Britain’ they called it. Three months into the 2010-15 parliament, The Economist displayed on its cover the image of David Cameron in profile; a punk-rock, Union Jack-coloured Mohawk sprouting from his neatly-combed brow. The background: Sex Pistols yellow. The leader article argued that rapid reforms to the British state and its finances rendered the young government the ‘most daring’ in the West. The PM, it seems, enjoyed the characterisation. A copy of the cover can be found, framed, in pride of place in the living room of the Camerons’ Downing Street flat.

This week’s edition of the magazine is unlikely to grace the Prime Ministerial wallpaper. George Osborne, the doorman, greets the visitor with a ‘This way, sir’. At the far end of a red carpet, Cameron plays the role of desk clerk. Vince Cable struggles dolefully with suitcases. The message: the 2012 Budget welcomes the world’s wealthy to a supplicant Britain.

The contrast is worth comment. As the coalition approaches its second birthday, the rhetoric has given way to a chaotic, often regressive reorganisation of the public sector and a £158 billion ballooning of the deficit. And for all its radical posturing, for all the lessons of the global financial crisis, the government has enacted a ‘business as usual’ economic policy based on a retrograde vision of globalisation. This week’s Budget sealed the deal. The Chancellor prioritised a top rate tax cut whose potential cost to the Exchequer, as the IFS has noted, is deeply uncertain given the ‘forestalling’ of tax payments. He introduced a stealth ‘granny tax’: a £3.3 billion raid on pensioners. The comparison with Gordon Brown’s misguided abolition of the 10p tax rate is obvious. Expect a u-turn.

This is significant. My bet is that the 2012 Budget will go down as the point at which Labour took on the radical mantle. Steve Hilton, Cameron’s blue sky thinker, has ditched the PM for the blue skies of California. Following the flurry of activity at the start of the parliament, there is now a growing sense of drift; the government’s ‘bold’ health reforms, for example, are in disarray. With this Budget, George Osborne has returned unabashedly to outdated Lawsonian economics. The ‘Magnificent Seven high-performing Cabinet ministers’ identified by Conservative Home last year are not looking so magnificent.

It showed in Wednesday’s debate. Ed Miliband won over even hostile commentators with his response. ‘Today marks the end of “we’re all in it together”‘, he thundered, adding provocatively: ‘Let’s have some transparency: hands up in the cabinet if you’re going to benefit from the income tax cut.’ The opposition benches roared. Even the Daily Express had to concede that Miliband had delivered a strong performance that hit the mark. Confident and resonant, Miliband acted as a voice of the nation; pulling apart the Chancellor’s speech with gusto.

His success contrasted with Labour’s past errors in tackling the government. What Wednesday showed is that coalition leaders – most notably Cameron and Osborne – are best portrayed not as Flashman-esque bullies but dogmatic bumblers. Osborne’s leaky, gaffe-prone Budget has been attributed to his decision to disappear off on a junket to the US the week beforehand. His past misjudgments, from flip-flopping on Labour’s spending plans to his advocacy of Andy Coulson, have been notable and numerous. Meanwhile Cameron’s inability to ‘do detail’ is well documented. Which of Britain’s senior businesspeople slips home at lunchtime to ‘put his feet up on the sofa’? One senior civil servant has warned of a ‘frightening lack of grip‘ at the top of government. Cameron is no Flashman; like his former boss John Major, he is ‘weak, weak, weak’.

Thus the stated ‘radicalism’ of the coalition has given way (most notably in this week’s Budget) to a series of botched and ideological reforms informed by that same old weary agenda: shrink the state, ‘starve the beast’. As Vince Cable’s leaked letter to the PM argues, the government lacks a ‘compelling vision’ beyond deficit reduction; it lacks a ‘clear and confident message about how we will earn our living in the future’.

Labour, in contrast, is pulling together a genuinely radical programme for the country. At its heart lies a profound understanding of the way the global economy is changing. Over the past weeks various Shadow Cabinet figures have articulated this new vision for Britain and its place in the world. Ed Miliband’s ‘Made in Britain’ speech and Budget response, Chuka Umunna’s CBI and Liverpool speeches, Rachel Reeves’s IPPR speech, Stephen Twigg’s plans to emulate Scandinavia’s childcare model; all these, and others, are informed by a theory of globalisation more sophisticated than that Osborne-Cameron ‘This way, sir’ approach that prescribes a ‘UK-as-tax-haven’ race to the bottom.

After all, supply chains are getting longer. So are lead times. Industrial clusters and smart, sustainable competitive advantages are becoming essential. Long-termist, productive, responsible varieties of capitalism are proving their worth (just ask the Germans). Labour’s credo is that it takes active government to harness these trends for the national good.

A core of Shadow Cabinet ministers are leading the charge. Ed Miliband, Ed Balls, Chuka Umunna and Rachel Reeves are formulating an authentically radical approach to economic globalisation, with Yvette Cooper, Douglas Alexander and Liam Byrne following through in home, foreign and welfare policies. Labour’s own ‘Magnificent Seven’ are Britain’s real radicals; articulating a genuinely new direction for the country, one predicated on a high-skill workforce and intelligently coordinated investment, innovation and regulation policies.

Miliband did this Magnificent Seven proud on Wednesday. But Labour’s 2015 strategy needs to reach further beyond the fairness agenda to encompass issues of leadership and vision. The general public recognises that Osborne’s measures are unjust: even Conservative voters are opposed to the abolition of the 50p rate. Now Labour needs to popularise its alternative. It is developing a radical, credible new vision: it should be assertive in saying so.

Jeremy Cliffe is a Labour commentator and contributing editor to Shifting Grounds. He tweets from @jeremycliffe.