Economy//

Labour’s new ‘blue collar’ politics

Written by: Marcus Roberts on 15 February, 2013
Filed under Economy

From Robert Halfon to Mehdi Hasan, calls for the great 10p tax come-back have been bipartisan and longstanding. And the politics of this are even smarter then the economics.

Because, as David Clark notes, Ed’s speech moves Labour policy on from New Labour in ways more substantive then just 10p and mansions. Refuting not just Osborne’s nonsense “expansionary fiscal contraction”  but also the growth-solves-all school of thought, Miliband has embraced living standards not just GDP growth as the measure by which his ‘Responsible Capitalism’ agenda should be judged. And he has made a down payment on the policy agenda needed to deliver that change with a Blue Labour focus on vocational training, wages and manufacturing.

Politically, it offers a response, just in the pre-Budget nick of time, to the growing threat of ‘blue collar Toryism’ or ‘Little Guy Conservatism’ espoused by serious long term thinkers on the Right like Tim Montgomerie, Robert Halfon and Jesse Norman.  But their prospectus for a Tory Party that cares more for middle earners then the 1% has of course an obvious weakness; whatever good they proscribe, Labour can likely do it better. By amending and adapting smart Tory thinking on the squeezed middle, Miliband broadens his One Nation brand.

But the differentiation with the Tories still matters of course and this is where Labour policy is particularly ingenious. Payment for the 10p cut through the mansions tax substantiates voters pre-existing belief that Labour not the Tories is the party that best answers the vital pollsters question: ‘who cares about people like you’. And at last Labour activists have a policy that they can explain on the doorstep without needing to reach for some think tank’s definition of “predistribution”.

The embrace of Obama-style economic messaging is an important development in translating Labour’s theoretical thinking into voter-attractive policy. In the US, the idea that building a strong economy “from the middle out” was at the heart of Obama’s offer – backed up by reams of polling and focus group data that said this concept motivated both middle class voters and those working hard to get into the middle class. Key Miliband strategist Stewart Wood’s thoughts on “the middle” should be viewed in this context: the translation of sound policy into good politics.

Applying this approach in Britain, The Economist’s Jeremy Cliffe has produced a UK version of the Obama campaign’s key chart explaining the squeeze on living standards and the need to tackle the fundamental weaknesses of the current economic model. The graph, described by LabourList as “the most important chart in British politics”, conveys the sheer challenge of what Ed Miliband’s policy agenda must tackle. That agenda must be ambitious precisely because the scale of the problem is so great.Key-UK-economic-indicators

Looking beyond today’s speech there’s every reason to believe that this is just the start of a clear and radical policy agenda. From the Resolution Foundation’s detailed work on living standards to IPPR’s ‘Condition of Britain’ project to the Fabians’ Commission on Future Spending Choices, the Left has ideas aplenty to answer the ‘blue collar’ politics of our times. A bold and clear agenda on living standards can yet define much of the election debate and lay the groundwork for a truly reforming government.

A rich policy debate should now follow in Labour as the party considers other big ideas like cutting VAT permanently, pursuing full employment and challenging public spending that prioritises cure over prevention.

Ed Miliband went big yesterday, and it paid off. If he keeps faith with a politics of big ideas he can win power and lead a government of big change. The economics of the time for the squeezed middle demand nothing less.