Labour’s leadership contenders have been tripping over themselves to say that Labour overspent in government
Labour’s leadership contenders have, depressingly, been tripping over themselves to tell a waiting media that Labour overspent in government. This seems as damaging for the future of the party as remaining silent about Labour’s public spending performance in the months after the 2010 general election defeat.
Tom Watson, on the BBC’s Sunday Politics programme, dismissed overspending concessions to the media in an interview with Andrew Neil. Not only an honest answer but one supported by the facts. So well done, Tom, for not falling into a bear trap that is potentially as damaging to Labour as the Tories’ constant reminders of the ‘Winter of Discontent’ from 1979 to 1997.
The reality, or course, is that Labour’s public spending between 1997 and 2007, when the international financial crisis hit, was not only affordable but vital to rebuild the public realm after eighteen years of Tory disinvestment.
As the chart shows, the UK’s net public debt to gross domestic product ratio, after one of the most cataclysmic financial crashes in history, remains historically low. And, I assume, no-one would argue that the UK wasn’t an economic success and a trade superpower for most of the 18th, 19th and 20th centuries.
Coming closer to the present, it is interesting to compare the debt record of the governments of Blair and Brown with those of Thatcher and Major. The very lowest debt to GDP ratio in the Tory years was recorded in 1991 at 25 per cent. But when the Tories left office in 1997, it had grown again to 42 per cent. Labour brought the ratio down to 36 per cent in 2007 before the onset of the credit crunch. But if Labour had achieved the very best of the Tory years, debt to gdp would still be 69 per cent today, equating to about £1.2tr in debt.
This underscores that ‘overspending’ by Labour in government was not a cause of today’s debt problem.
A second line of attack is that Labour should have ‘fixed the roof’ while the ‘sun was shining’. This won’t do either. What do commentators who raise this issue think Labour was doing from 1997 to 2007 when it raised NHS spending to the EU average, rebuilt local government services, invested heavily in education, partly rebuilt the public transport system, upgraded international development, created Sure Start centres across the country, kick-started the decent homes programme in social housing, invested in community regeneration schemes, introduced policies to tackle child and pensioner poverty, and created the Child Trust Fund?
It’s often forgotten that public services and infrastructure had fallen into disrepair by 1997 and that satisfaction with public services had plumbed the depths in the 1980s. The power of public investment to drive satisfaction is shown in the NHS where satisfaction doubled from 35 to 70 per cent between 1987 and 2007. It should also be remembered that Labour’s investment was supported by David Cameron and George Osborne as a means of getting into government; although forgotten soon afterwards.
Austerity is now dismantling much of what was achieved in the name of reducing the UK’s public debt, which is, after all, only average for the G20. That the UK was comparable to Greece in 2010 and ‘on the brink’ was a case of successful Tory spin and is not borne out by the facts. So keep correcting those interviewers Tom.
Kevin Gulliver is a contributing editor to Left Foot Forward and a director of Birmingham-based research charity the Human City Institute and chair of the Centre for Community Research. He writes in a personal capacity
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16 Responses to “Did Labour overspend?”
publicperson
Labour lost because it was deluded into thinking: –
1. Internal Party Democracy is not important any more.
A view arose that in the modern era the Labour Party could
be run by a narrow, cynical, amoral and manipulative clique fronted by good
looking spokespeople attractive enough to win power as an end in itself. Once
in power the goal would be to merely become re-electable.
The reality is that without a broad church that offers hope
to all factions of winning the argument and policy positions within the party
there is no point in being a member, participating or persuading others to vote
for you. You are wasting your breath.
2. Failure to persuade people to vote was not a lost opportunity.
The contrast between 66% turnout in the General Election and
the 85% for the Scottish Referendum is the difference between winning or losing
an election.
The failure to engage and inspire, and concentrate on making
historic supporters turnout was doomed.
3. The UK is Tory and there is nothing to be done.
This is ludicrous. The vast majority gain little from the
current system. But that does not mean they trust Labour either to change it or
not to make it worse.
Unfortunately experience is that Labour has made little
difference for most people.
In fact less than 25% voted Tory
4. The Labour Party can be trusted to do a good job when in office
See Office for National Statistics “An International Perspective
on the UK -Gross Domestic Product . Andrew Banks, Sami Hamroush, Ciaren Taylor
and Michael Hardie, Office of the Chief Economic Adviser April 2014
The reality seems to be that the big switch from production
to services kicked in about the time of the Blair Government coming into power
and the gap between the richest and poorest has grown.
See also:
http://www.equalitytrust.org.uk/about-inequality/scale-and-trends
Although the Labour Party praises itself for Surestart, childcare
provision is much less than commonly found in Europe and its introduction
doesn’t quite compensate for being captured by the City, selling old people’s
homes, switching from direct to indirect taxation or undermining the NHS.
5. Ignoring UKIP was a good policy
UKIP were right to highlight uncontrolled immigration and
membership of the EU as issues. By failing to address the deterioration in the
economic position of the white working class and the relative powerlessness of
the UK to act within the EU it was obvious that votes would be lost.
6. Nothing was learnt from the success of the SNP
The biggest lesson seems to be that a progressive majority
can be awakened and energised. But it was regarded by the Labour Party as an
embarrassment rather than a hint for how it may position itself and build
support in other parts of the UK.
7. Refusing to speculate on a hung Parliament would attract voters
By refusing to be drawn into discussions about what may
happen in the event of a hung Parliament there was a spurned opportunity to woo
Liberal Democrats, Greens, UKIP and SNP voters. Without any indication that
there was anything to be gained for those people nothing was gained.
8. Failure to declare your hand is clever
Refusing to risk alienating people who may disagree by
spelling out what a Labour Government would do is not clever, but cowardly and
lazy.
If the narrative is not persuasive for the party’s leaders
then you cannot expect it to be persuasive for others.
9. Promises convince.
The tablets of stone, as a cross between Tony Blair’s pledge
card and an attempt to humiliate the Liberal democrats backfired. The promises
were so paltry, vacuous or easy to avoid they only succeeded in demonstrating
the shallowness and gimmickry that had gripped the party.
10. Party funding does not remain an issue
It seems that the Labour party is open to being bought by
commercial and professional interests while taking Trade Union support for
granted.
The source of political funding is important. Funders expect influence.
By being embarrassed by Trade Union support and happy to let
PWC or MacKinsey write its policies the Labour Party was selling itself.
11. The Labour Party lost the argument on the economy.
Saying what’s in the past is past and attempting to focus on
the future was evasive. Not admitting that Gordon Brown was wrong on important
things (although right on others), that the UK became over-dependent on financial services or that the state needs to be more active in the UK economy is not controversial but became so because
Labour didn’t fight its corner.
12. Appealing to aspiring voters is the key to success.
Aspiration is what everyone has; hope and motivation is what
too many lack. Changing policies to suit the already well off is to implicitly
reduce hope and motivation for the many.
AlanGiles
sadly they are all falling over themselves to be seen as a safe pair of hands they begin to mouth the same platitudes. Creagh looks as if she has dozed off in the picture above – at any rate she doesn’t look leadership material.
marje arnold
i entirely agree with the above. cant understand why labour did not nail the lie and point out how much labour did for the country while in office after sorting out the deficit left by the tory`s. why oh why didnt they point out the amount that this government was borrowing – more than any labour government in history
Bob Vant
If you’d like to see very a very specific description of the mess we took over in 1997, and what we’d done to sort it out by 2010, look up ONE CONSTITUENCY, TWO GOVERNMENTS. It’s a Survey I did for the 2010 GenElec, and was based on looking for a new way to communicate with voters. I’d realised that there was little point in talking about “£x Billion on education…health….etc.” Our reputation for spin had put the mockers right on that. Also, voters were/are sceptical about standard political leaflets. The Survey aimed at engaging with voters on the bases of accepting they had good reasons to be sceptical, and giving them the wherewithal to make their own minds up. Sad to say – from my point of view, any road – we did next to nowt with the Survey in 2010 in the Colne Valley Constituency……I did my best to pass it on to someone Up There, but got nowhere…….have carried on doing that since 2010 whenever someone comes up with the “We didn’t defend our record in government!” but without success……
Mike Stallard
Kevin, I am 76 years old. Do you remember Sunny Jim? Do you remember beer and sandwiches at Number 10? Perhaps you remember Mr Scargill and the miners’ strike too? I was there when we huddled over a meagre coal fire in the dark in the 1970s.
I was there when Mr Blair got elected on a promise to keep the economy on the same even keel that Mr Clarke left it in after Black Wednesday – a most terrible judgement on the ERM.
I was there when Mr Blair promised to start spending money on Schools’n’hospitals two years after he entered office on a landslide.
I was there when the national debt soared to 500 billion pounds. And I was also there when Mr Brown introduced the Financial regulator and got rid of the Bank of England, thus opening the way for the corruption and the crash of 2008.
I was there, too, when all this was suddenly “repaired” by the new Tory led government and the debt then increased, over their tenure, to one and a half trillion pounds. Some cuts there!
Now they are not even facing the debt at all – just the deficit.
And the Labour response? Rioting in the streets against the totally imaginary cuts!