Argument 6 – Labour’s economic policy is vile and stupid.

I said in the previous piece that I wouldn’t comment on Labour’s new economic policy, but there are a few things I have to say in addition to the previously linked argument for a new workers’ party by Mark Wright.

My argument is that Labour’s new policy is both completely vile and incredibly stupid.

Labour’s new policy, as announced by Ed Balls on Saturday and confirmed by Ed Miliband on Sunday, is that not only will they enter the 2015 election promising more cuts, they will not reverse a single cut made by the Tory-Lib Dem coalition in the meantime.  The reason that they are going to do this is that they recognise that the cuts the Government are carrying out will damage the economy so much that, rather than the budget deficit being reduced, it will actually increase.  Therefore, if Labour return to power in 2015 there will still be a budget deficit to deal with, so no cuts can be reversed and more cuts will have to be made.

I hope I don’t have to spend too much time explaining why this is a vile policy.  The Government’s austerity agenda is an attempt to load the cost of the financial crisis onto the people least responsible.  There have been, and will be more, massive cuts to health, education, transport, and other vital services.  Perhaps most disgracefully of all, those on the breadline, and also perhaps suffering from disabilities and health problems, are being ruthlessly attacked, with their already meagre incomes slashed or under threat completely.  This is while the rich and superrich continue to fatten their wallets and more else besides.  To support this, and not oppose a single bit of it, while planning to make even further attacks if they regain office, is vile.  No other word for it.

But stupid?  Not if you read some of the rubbish written by Blairite cheerleaders in Parliament and in the press.  They think saddling the Labour Party with policies that copy the Tories and Lib Dems makes brilliant sense, that it somehow gives Labour ‘economic credibility’ while also provoking a spat with the trade unions.  There are three problems for the Blairites and the Labour leadership here.  They are that the new policy is economically stupid, politically stupid, and it doesn’t actually make any sense.

I’ll start with the last of these.  Some of the supporters of the Eds who have reservations about the new policy (such as the Independent columnist Steve Richards), think the policy is correct, but patronisingly claim that it is too clever and subtle to be understand by the electorate.  Well I’ve thought about the argument they are making, and it really doesn’t make any sense.  Balls makes the correct claim that the cuts are damaging the economy.  This will lead to the budget deficit increasing, correct again.  Where he goes completely off the rails is in claiming that the sensible thing to do is to accept this and carry on with this same failed policy!  These politicians are more like medieval doctors.  One doctor tries to cure the patient by draining blood.  Another doctor takes over, can see that the bloodletting has only made the patient worse, but then declares that given that the patient is so ill, they need to drain more blood.  This is insanity, and people won’t fall for it.

So that seems economically stupid, and just to clarify, it is.  Cuts take money out of the pockets of people for whom it makes a difference.  They do this by increasing unemployment, freezing or cutting pay (particularly when inflation is high, which it is at the moment), reducing pensions and benefits, increasing service user costs (such as rail and bus fares) and increasing taxes (such as VAT).  This means less money to spend on goods and services, leading to problems in various aspects of the economy, such as the retail sector, which then leads to more pay cuts and job losses.

It is worth pointing out that the very unfairness of the cuts – directed way more harshly towards the less well-off – that makes them so economically toxic.  If Government attacks were aimed at the well off, it would not have such a negative effect – take £100 out of our hands, we will spend less and suffer.  Take £100 out of the hands of a wealthy person and their spending will probably not be affected, as they won’t even notice it’s gone.

So it doesn’t make sense, and it’s economically stupid.  What about politically?  Will it restore Labour’s ‘economic credibility’? Will it make them more popular by distancing the party from the trade unions?  The answer to the first question is ‘yes and no’.  In a very narrow sense, in the sense of aspects of the right wing media who think that economic credibility means hitting the poor and rewarding the rich (rather than actually having credible economic policies which as we’ve seen, they don’t), yes.

But the problem Labour have is no matter how unpleasant, reactionary and stupid their policies, they will never appease large parts of the right wing press.  Gordon Brown spent much of his time in office dreaming up ridiculous, illiberal schemes to please the likes of the Sun and the Daily Mail but they continued to attack him.  If the media, run either by the State (the BBC, and yes it is run by the State) or the super wealthy (everything else), decide that the Coalition government are going to do what they want (which they very much are), then Labour will never get any decent press anyway.

What of the second point, the distance from the trade unions?  The problem here is the assumption that trade unions are unpopular.  Despite years of declining membership since the Thatcher era, and constant attacks from the Government, employers and press, a substantial proportion of workers in Britain are still in trade unions.  And polling figures show that a substantial majority of the population supported the strike action on the 30th November.  It is fair to say that most people realise the crucial role of trade unions in defending our rights and standard of living even if they are not in one.  So angering the trade unions is not a royal road to popularity for the Labour Party.

In fact, given that most of their voters will either be a member of a union or well-disposed to unions, it seems a strange fight to pick.  Even stranger given that movements in various unions to disaffiliate from the Labour Party and stop funding them will be given added impetus by this new shift in policy.

A further political stupidity is that the old message was actually quite astute.  Ed Balls managed to plant the slogan ‘too far, too fast’ into most people’s heads, and while I didn’t agree with Labour’s old position, I could see that it was working, despite the tailor’s dummy they had elected as a leader.  This well known position has now been thrown out in a heartbeat.  Not only that, but any sort of distance between Labour and the Coalition has now been obliterated.  On economic policy they are the same.  The only difference is now seemingly on crime and immigration, where Labour is more right wing!  The questions of why should anyone vote Labour, and what the point of Labour is, will be asked ever more urgently by many people.

This policy will mean that the weak, pathetic, half-hearted opposition that Labour has so far displayed in Parliament, will now be replaced with no opposition at all.  There will be no change in council chambers up and down the country though, as Labour councillors had been merrily voting for huge cuts anyway.  In fact, when one Labour councillor in Barking and Dagenham recently dared to vote against cuts, the party expelled him!

I really cannot for the life of me understand why people continue to prop up this moribund, moronic and malevolent organisation any longer.  We don’t want one Tory party, having three of them is just taking the biscuit.  It is time for trade unions, workers, the unemployed, pensioners and students to form a new party which is dedicated to serving the interests of the many, and not just the rich, privileged few.

The Trade Unionist and Socialist Coalition is one step towards this, and I hope that those disillusioned with Labour start to join the building of this.

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