Sunday, 31 May 2015

It Can't Happen Here


Andrew Fisher asks: just how much further to the right can Labour's leadership candidates go? 

In March 2007 Gordon Brown delivered his final Budget as Chancellor. By July he would be Prime Minister, and by September the collapse of Northern Rock would be the prelude to the UK's great crash. This tumultuous period is worth revisiting because it is significantly misrepresented in the current political discourse

Responding to the Budget, then opposition leader David Cameron didn't mention the budget deficit once. Not at all. Nada. In fact, six months later, in early September (just days before Northern Rock collapsed), George Osborne declared that the Tories would match Labour's spending for the next three years (as the accompany BBC News website screengrab shows).

This was totally understandable: the deficit was lower at this point than Labour had inherited in 1997 - and this modest deficit came shortly after four years of running a surplus that had seen the New Labour government shrink the national debt from the 42% of GDP they inherited down to little over 30% (for more detail see 'Labour's mess over public spending').

Fast forward eight years and every single contender for the Labour leadership (Andy Burnham, Yvette Cooper, Mary Creagh, and Liz Kendall) all believe that the budget deficit was too high and that Labour was overspending in 2007. This puts them somewhere to the right of then Prime Minister Tony Blair, Gordon Brown, David Cameron and George Osborne.

The one person who spoke in the 2007 Budget debate to accuse Labour of "tax-and-waste", "largesse" and "waste in the public sector" was John Redwood - a devotee of Milton Friedman. So it is incorrect to label these candidates as four shades of Blairite. In fact they should more accurately be described as Redwoodites. That is in whose economic corner they find themselves in their rewritten history.

Chris Leslie, appointed shadow Chancellor by interim leader Harriet Harman, echoes this right turn to Redwoodism. He goes further telling the Observer that without the small deficit "it stands to reason you could have braced yourself more for that crisis". Several Labour leadership candidates have said similar things - but I'm struggling to understand how even totally eradicating a £35 billion deficit would have braced us much for the £1.2 trillion bank bailout.

Of course what might have helped was clamping down on the rampant tax avoidance and evasion, maintaining Major-era levels of corporation tax or saving a few £billions by not embarking on military atrocities in Iraq or Afghanistan.

Tough on welfare, tough on mythical scroungers

Caroline Flint looks on admiringly
The far right shift of Labour's ruling elite transcends both economics and the leadership contenders. In the Deputy Leader race Caroline Flint took to Murdoch's rag to articulate her carefully thought-out view that "Labour needs to start attacking benefit scroungers" who need a "kick up the backside".

Meanwhile interim leader Harriet Harman and Andy Burnham expressed support for the Tories' plan to reduce the benefit cap further even though evidence shows it will put 40,000 children into poverty. Increasing child poverty isn't at all Blairite, it's Thatcherite.

This is of course the party that opposes the bedroom tax because it kicks poor people out of their homes, but supports the benefit cap which does the same.

Tough on migrants, tough on the mythical causes of migrants

Leadership contender Yvette Cooper now believes that Labour's 2015 manifesto commitment to deny all benefits to migrants for the first two years - launched by Rachel Reeves (now backing Andy Burnham) in the Daily Mail - was too liberal, and should actually be doubled to four years.

In 2010 the BNP manifesto supported no benefits, housing provision or pensions to foreigners "who have not paid into the system". Cooper is therefore well to the right of Nick Griffin on migrants' rights to benefits, believing that even if they have paid into the system for years then they should still have no entitlement.

Liz Kendall meanwhile committed Labour to "be doing the best for kids, particularly in white working class communities". Hackney North's Labour MP Diane Abbott described these comments as "Not even dog whistle politics. Blatant".

Those labelling the Labour leadership contest as a return to Blairism or New Labour are vastly underestimating the shift. This is a shift from austerity-lite to far right. It could happen here.
"The only thing necessary for the triumph of evil is for good people to do nothing."

2 comments:

Vincent Crosby said...

This is well worth a read but I would suggest that it needs better circulation

Ravi said...

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