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Labour’s Deficit Hawk

Scottish Labour conferenceWill Gordon Brown’s increased presence in the referendum debate help stem the flow of working class voters away from the Union and towards independence?

I’m not convinced.

Yes, Labour’s vote rose in Scotland at the 2010 election as it slumped across the rest of the UK. But that probably had more to do with the Scottish electorate’s fear of a resurgent Tory party than it did any deep-seated attachment to Brown.

By that stage Brown had, after all, spectacularly crashed the UK economy, raided British pension pots, presided over the expenses scandal and abolished the 10p starting rate, making millions of low-income families worse off.

I’m not trying to diminish what Brown achieved in office, such as slashing child poverty rates and over-seeing the implementation of the minimum wage. But by the end of his premiership he was clearly a spent force, even in Scotland. In April 2010, Brown’s approval rating among Scot was just +4 – 3 points below Alex Salmond’s and (unbelievably) a full 8 points below Nick Clegg’s.

So the Yes campaign has little reason to be worried about the former prime minister. At any rate, prior to his big pensions speech last Tuesday, the Kirkcaldy MP had already made a series of relatively high-profile interventions in the campaign, none of which had any discernible effect on the polls.

The current Labour leader, however, is a rather different proposition.

Ed Miliband has nothing remotely original to say about Scotland, as his trip north yesterday confirmed. But there are elements of the broader Miliband project that could help shore-up unionist support, particularly in working class communities, ahead of the September referendum.

More than any other mainstream British politician, Miliband recognises that the 2008 crash changed the dynamics of UK politics. By breaking the link between living standards and GDP growth, the financial crisis robbed trickle-down economics, dominant since the 1980s, of its popular legitimacy.

Miliband has used this opportunity to attack previously untouchable private interest groups. Corporate tax-avoiders, monopolistic energy companies and right-wing media barons have all come under heavy fire from Labour over the last four years.

Miliband has also set out a programme designed to tackle what he calls the ‘cost of living crisis’. This includes plans to increase taxes on bankers, corporations, high-earners and mansion-owners, as well as freeze energy prices, improve childcare services and encourage employers to adopt the living wage.

These are precisely the sorts of things Labour should be doing. They suggest the party (part of it, anyway) is very tentatively rediscovering its radical spirit. More importantly from a Scottish perspective, they stand in sharp contrast to the SNP’s relative conservatism on a number of key economic issues.

The SNP’s pledge to cut corporation tax can’t be reconciled with its desire to reduce social inequality. Neither can its refusal to commit to the reintroduction of the 50p top rate of income tax, nor its efforts to attract zero-hours employers such as Amazon to Scottish shores.

These policies are flawed in their own right. But in a campaign fought increasingly on left-of-centre territory, they are also strategic liabilities. Undecided Labour voters aren’t going to vote Yes in large numbers if Alex Salmond can’t produce a fiscal plan that matches his vision of a socially democratic independent Scotland.

And yet, despite the progress the party has made under Miliband, Labour still carries a pretty substantial strategic liability of its own – one the Yes campaign should do more to exploit.

Ed Balls, the shadow chancellor, is a deficit hawk, and always has been. As an influential Treasury adviser during the early years of the New Labour government, Balls was one of the driving forces behind Brown’s decision to grant the Bank of England ’operational independence’, a move that signalled Labour’s shift away from post-war Keynesianism and towards a form of monetarism built around ‘sound money ‘ and ’rule-based spending constraints’.

It was at this point that New Labour effectively gave up on an active fiscal policy as a means of securing growth. Credibility with the financial markets – something Brown tried to secure by sticking to Tory spending limits for two years and pledging to reduce the national debt over five – replaced the party’s traditional support for full employment as the guiding principle of its economic strategy.

This remains the case today. Under Balls’ guidance, Labour has again promised to work within the Tories’ ‘fiscal envelope’ during its first 12 months in office (meaning it intends to implement, pound for pound, every one of George Osborne’s planned 2015/16 cuts) and eliminate (that’s eliminate, not reduce) the deficit if it wins the UK general election next year.

Try selling that on the doorsteps of Easterhouse and Craigmillar.

Miliband and Balls represent two different faces of the contemporary Labour Party: a kind of revived centre-left radicalism and a hard-nosed fiscal ‘realism’. The Yes campaign’s chances of winning over working-class swing voters – and therefore of winning – will skyrocket if it succeeds in emphasising the latter at the expense of the former.

Comments (37)

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  1. Very interesting, and good to see a balanced piece that recognises that all is not bad on one side and all good on the other.

    However, your conclusion seems to suggest we continue the same politics of deceit we are wanting rid of, or have I misunderstood you?

    Rather than try and paint the ‘other side’ as worse than they are (we surely want a Labour Party in an independent Scotland to be then best it can be?) we should surely be making clear to the SNP that, to win, it needs to state clearly that it is for increasing equality and not for cutting corporation tax, and that it needs to commit to (post-independence) increasing income tax on top earners and to ending zero-hours contracts?

  2. Iain says:

    It’s good to see a balanced article such as this, but I can’t see any radicalism in Ed Miliband. There doesn’t seem to be any passion or outrage in him, and he comes across more as a student politician adopting positions to see how they play out in theory. Balls may never front the UK party but his ideology will guide it, like Brown’s did during Blair’s years as front man. Added to recent utterances from the likes of Rachel Reeves and Yvette Cooper-Balls on a range of social issues, Miliband’s radicalism will be tethered in, if it even exists at all.

  3. bringiton says:

    It is getting a little tedious to have to keep reminding people that the referendum is about independence and not party politics.
    Things like taxation will form part of party poltical manifestos for the next Scottish elections.
    The only thing Scots are being asked in September is whether we should manage our own affairs or continue to allow others to do so on our behalf.

    1. joseph O Luain says:

      It is a fact regularly overlooked; Bringiton brings it all back to earth for us, though. The independence referendum has nothing to do with party politics. Iain writes as though the forthcoming referendum were an old-fashioned UK election. We must all work to dispel this misconception.

    2. Walte Masson says:

      Your spot on what a load of garbage tory party this labour party that, we have wasted our lives putting up with a bunch of politicans that is being whipped ta say what a pm wants, if they disagree they are sacked , theres no such a thing as freedom of speech with these eton bigots, that must have the last say in everything , blame anobody for there own mistakes , whats in there heads when signing our country over ta the germans signing treaty after treaty traitors , and ta rub salt inta the wounds hands over £165 billion pounds a year just ta look important and fly back and forth in private jets ,telling the rest of us ta use stupid low carbon electric bulbs turn our radiators down so they can increase there air miles , we must act now so this scottish government is made aware we cant give the euro 100 billion pounds a year OR 40MILLION A DAY
      so idiots can sit roon a table negoation of straight bananas , and we cant deport murderers, terrorists , rapists E,TC WE VOTE INDEPENDANCE WE WANT JUST THAT NOT BEING TOLD WHAT WE CAN DO AND WHAT WE CANT BY OTHER COUNTRIES SO SALMOND KEEP YER GERMAN TIES OUT O OUR FREEDOM IF IT IS A YES VOTE ????

  4. Will McEwan says:

    “The SNP’s pledge to cut corporation tax can’t be reconciled with its desire to reduce social inequality. Neither can its refusal to commit to the reintroduction of the 50p top rate of income tax, nor its efforts to attract zero-hours employers such as Amazon to Scottish shores.”

    That paragraph is simplistic total nonsense. Rest of the article a collection of unsubstantiated assertions

    1. Hi Will

      Can you explain what you mean rather than leave your statement as an “unsubstantiated assertion”?! (-:

      1. braco says:

        Justin Kenrick,
        it’s obvious what he means. How much spoon feeding do you usually require exactly?

    2. Hi Braco

      I guess your right, but I get very tired of people just throwing insults. And that includes tired of me doing that too, because I now see my response was doing just that, however much it was disguised with a (-:

      Whereas substantial responses (and there are many here) welcome pool to real debate.

      1. braco says:

        Fair doos Justin.

  5. Ron Wilson says:

    The campaign is not about Alex Salmond – a Yes vote will give Scottish Labour the opportunity to rediscover itself and produce left of centre policies attuned to Scottish priorities. Like ending zero hours contracts which MIliband’s Labour party is merely tinkering with.
    Your statement that the SNP’s policy of reducing corporation tax (just as the previous London Labour administration did) ‘can’t be reconciled with its desire to reduce social inequality’ is hogwash – the aim of a corp tax reduction is to stimulate investment, increase job opportunities and thereby grow the tax take which can then be reinvested in public services. All for the good and can assist in the drive to lessen inequalities that currently exist within the Union.

  6. bearinorkney says:

    Cut corporation tax, encourage more jobs, increase the tax take whilst removing folk from the jobless queue.

    There ………reconciled.

  7. yerkitbreeks says:

    Agreed, bringiton, hence my irritation at Robin MacAlpine for sniping at the SNP the other day. Let’s get our Independence and then we’ll have the opportunity to empower whichever party most closely follows the “Civic Nationalism” moniker so heavily trailed to us, the masses.

    As a fortunate pensioner I’m already resolved to paying more tax for the greater good.

  8. Colin Dunn says:

    “The SNP’s pledge to cut corporation tax can’t be reconciled with its desire to reduce social inequality.”

    I’ve seen this sort of statement made repeatedly over the last 18 months, and don’t agree that it’s correct. It’s too dogmatic.

    Social inequality and lower corporation tax are compatible if ALL corporation tax is collected. At the moment the UK has a system where corporation tax is being avoided on a huge scale. If an independent Scotland has a policy of eradication, or at least reducing, corporation tax avoidance, then these tow things can be reconciled.

    Not an SNP voter, by the way, and not necessarily in favour of lower corporation tax. Just making the point 😉

  9. andrew>reid says:

    Contrary to what is said in the article, and as a report by the Institute for Financial Studies has demonstrated, during the last five years of Blair/Brown/Darling across the UK, child poverty was substantially increasing again, pension poverty was left untouched, the richest were getting richer and the poorest were getting poorer – the inequality gap was getting wider – and this included the three-year period before the financial crash In 2008. Where were Labour values and social justice then? Labour is hyping up left leaning talk in pre-referendum Scotland (although remember the something for nothing Johann Lamont speech), but listen to what Labour is saying in UKIP land and wonder how deep any of it goes.

  10. stewartb says:

    bringiton, just beat me to it! You are absolutely right.

    Across a number of online Yes leaning sources yesterday and today, it is as if even we are now discussing the pros and cons of competing policies in advance of just another general election. So missing the point!

    Whatever one’s view of the benefits (or not) of, for example, a reduction in corporation tax, the key thing is that after independence it will be the electorate of Scotland that will choose from the corporation tax policy on offer from ALL the parties that compete for our vote. And we can choose between PACKAGES of policies designed specifically to address issues for Scotland …. and get what a majority in Scotland chooses (for good or ill).

    And we don’t only get what we choose on a one off basis but at general elections time and time and time again into the future.

    Of course we Yes supporters really do know this but some contributors seem too easily diverted into a ‘politics as usual’ type of debate. As the recent inputs from Labour for No reveal, there is already an attempt to turn the September vote (simply) into a choice between Labour and SNP policies. I hope we don’t take our eye off the ball and allow ourselves to be drawn into trading views on transient party policies.

    1. stewartb and briniton – Is that right?

      Do we just need to convince people that the issue is whether sovereignty rests at Holyrood or Westminster? In which case, fine and comments by me or others about what kind of society we want after independence are maybe just a diversion into ‘politics as usual’.

      But that the issue is just sovereignty is probably only true for a third of the population, another third will vote no, and it is the third in the middle who need to be convinced that voting for independence is about voting for a different kind of politics and a better society.

      The debate between people on the Yes side on what kind of society we are, and want to become, is in no way politics as usual. It is inspiring, and in my experience people like Robin McAlpine and Lesley Riddoch are persuading a lot of people to switch from No or undecided to Yes, precisely because they are willing to envision a better society and critique the SNP or any party when they see it as being regressive, rather than remain in the narrow confines of the constitutional question, however fundamental that question is.

      1. yerkitbreeks says:

        Do you really think all of us in the grassroots are simply going to roll over and return to cringy politics after Independence ? Sorry, but masses of us have, to our own surprise, become far too politicised for that.

        You should have been with us at a post – canvassing lunch last week here in the Borders to get the gist of how things are likely to be.

      2. yerkitbreeks – (hope this appears below your 10:40 comment) – agreed (-:

        but my question wasn’t about whether we retain our commitment post-independence (I’m sure we will) it was about envisaging a socially-just society as part of encouraging people to vote Yes, rather than just sticking with the sovereignty question. My guess is we are all doing both – and that we strike different balances depending on who we are talking with.

      3. braco says:

        Justin Kenrick,
        these more ‘radical’ and left wing ideas ARE being voiced and promulgated very effectively already by the people and organisations that you quote (and many more). The point is however that the SNP are an elected government.

        As yet those organisations and voices you (and I) are finding so persuasive, have not won any elections and in fact, have a history of hardnosed electoral failure and even implosion.The SNP’s job is to deliver democracy to our Country via the referendum, after which we can all then happily trot off and vote (maybe even agitate) for whichever politics we choose.

        This is the message the ‘third of the electorate’ you are so concerned about are being systematically denied by the MSM. It is unhelpful that we in the YES camp should assist this denial by pretending, along with them, that this referendum decides anything other than what it decides. That is ‘Should Scotland be an independent Country?’ YES or NO

      4. manandboy says:

        Justin, of course you’re right – if a little early.

        ‘Get through the green light
        and sort out where you’re going on the other side’

        This is a saying I use often to prevent myself losing focus on my top priority.

        “the third in the middle who need to be convinced that voting for independence is about voting for a different kind of politics and a better society.”

        But what if the third in the middle are among the mass of people who appear to be confusing a referendum with an election.

        If that’s the case, then they need your help to see the green light,
        because believe me, as one who has missed it so often
        through concentrating on “a different kind of politics and a better society”.
        It is just never worth it when so right turns in an instant to so wrong.

        (Ps to all readers:

        If you would like more information on how Scotland can be a very successful independent country –

        Please listen (if not already) to Ivan McKee, a Scottish businessman who lives in Glasgow.

        If you want clarity along with facts and figures and a typical West of Scotland sense of humour, then Ivan’s for you.

        The video is 21 mins long, but even if you’re convinced half way through,

        don’t miss the story about the Prime Minister of Norway at the very end.

      5. yerkitbreeks says:

        Justin – I’m sure we are doing both, so no real difference between us there.

      6. so braco and manandboy,

        you are saying that there are two different approaches needed – the SNP Govt taking it’s constitutional change approach to give the possibility for a society here that can decide for itself who and what we are, and the more radical taking its visioning approach to what that society might be. Right?

        So then the key is for neither of these approaches to undercut each other, for each to recognise the need for the other. If so then it is fine people on the Yes side being critical of SNP policy (but not of their task), and fine to call radical Yessers to account for not recognising the extraordinary historical task the SNP are undertaking under intense fire from the powers that be (but not to criticise these Yessers for thinking outside the mainstream box). Key for me is that enough of us are moving forward as we dialogue, rather than just rehearsing positions as if we are always right and others always wrong. That makes this a movement of solidarity and innovation not of tired rehashing.

      7. braco says:

        at the moment the YES movement is for a YES vote in the referendum, simple. This is to create for the first time in Scottish history a democratic forum from which the voice of the Scottish electorate can be heard, understood and acted upon by our chosen politicians.

        The creation of that democratic forum is where all other political possibilities flow from. That fact is as relevant to a possible right wing YES voter, as it is to a possible left wing YES voter and every other YES voter in between. All is possible (politically speaking) in a future independent democratic Scotland, as long as you can convince the electorate of your arguments.

        Some folk seem to be forgetting that basic fact. Robin McAlpine and Leslie Riddoch are very convincing to me and you, not so much though to a Tory voter who may see the benefits of an Independent Scotland in a very different light. Do you want their YES vote or are you willing to alienate them by jumping the gun? Simple as that.

        The left wing, who have been far from electorally successful in Scotland in recent years (to say the least) seem to be happy to use the opportunity of the referendum campaign to claim some kind of dominant voice in the deciding of just what our country should and will end up looking like. Which seems a bit opportunistic to my eyes, since most are very new converts to the ambition of an Independent Scotland and seem to finally have been convinced, not by any democratic argument per se, but more by the realisation that their ideas have little to no chance of success in the current UK while standing every chance of winning out in an Independent Scotland.

        Let me say I am very sympathetic myself to the lefts arguments for a future Scotland and their addition to the YES campaign has been and is enormous . It’s just that attitudes in articles like this, and I might say some of your earlier posts today seem to be leading the YES campaign into the traditional and well documented failings of the left, factionalism.

        Recent digs at the SNP not being radical enough etc. is a symptom of this inability of the left to understand that the Independence movement (and so the SNP) is an umbrella movement that covers all political views and none. Not some simple party political vehicle. It has been forced into that form in order to make any headway with the cause but people fundamentally misunderstand the movement by viewing the SNP in simple party political terms.

        Sorry Justin, I seem to have gone the very long way around the houses to once again say, the all inclusive YES vote for Scottish democracy first. Then we can all happily set off trying to achieve our more individual (party political maybe) vision for our Country. It can’t be party politics as usual though, as we have never had fully mandated democratic party politics in Scotland before have we, and I for one can’t wait!

      8. Braco

        I actually don’t know.

        The way you see it is very clear:
        “Some folk seem to be forgetting that basic fact. Robin McAlpine and Leslie Riddoch are very convincing to me and you, not so much though to a Tory voter who may see the benefits of an Independent Scotland in a very different light. Do you want their YES vote or are you willing to alienate them by jumping the gun? Simple as that.”

        Your approach is clearly very effective in speaking to those who put the constitution first, including such Tory voters, but are they the majority of those who need convincing, or are the majority of those who need convincing people who are not interested in where their government is (Holyrood or Westminster) but in what it does? If these are the majority that need convincing (and if they are by far and away left-leaning in their politics), then it is the Lesley’s and Robin’s who are more likely to win them over than an appeal to sovereignty. I’m not sure Lesley is part of some old left, and Robin certainly makes his pitch in the most electorally convincing terms! I’d say they are a real asset!

        I also think the whole left / right understanding of politics is designed to confuse us. It makes it sound as though they are equal choices in an equal democratic playing field whereas from where I stand the right (in the form of corporations) tries to control and reduce the democracy, and the left (in the form of recognising the rights of those who are less powerful) tries to democratise society. One tends to be (but not always) a ‘choice’ to erode democracy (UKIP/ No) and one a choice to extend and strengthen democracy (Greens/ Yes).

        Ok, I think where you are coming from is completely sound – I just think there is always more than one truth at play and the key thing is to recognise that and enable them to amplify each other rather than cancel each other out.

      9. braco says:

        you wrote, ‘If these are the majority that need convincing (and if they are by far and away left-leaning in their politics)’. Well quite.

        We are very close to agreement here (and probably always were). I merely used a Tory possible YES voter as one end of the spectrum of possible Scottish YES voters we need to draw support from to win on the 18th. (Scotland apparently had 412,855 Tory voters at the last Westminster elections after all!).

        What you view as a sovereignty argument can just as easily be seen for what it actually is, which is the only practical plan on the table that will enable the very type of democratically relevant government you believe that important ‘third’ of the Scots electorate are looking for.

        Focusing on party politics and pretending that the referendum will somehow replace democracy is the line our opponents are punting for a reason. It’s in order to fragment that ‘third’ back into it’s constituent party political parts and have them vote (as usual) along party lines instead of thinking first principles as is required in a YES/NO referendum.

        They would indeed love our help to turn around what has been and is (in the face of our current honest and frank approach) a failing strategy. Lets not assist them and simply focus on what the referendum is about.

        Should Scotland be an independent country? YES or NO

  11. theycan'tbeserious says:

    Independence first and politics next, otherwise its all academic and for naught!

  12. macgilleleabhar says:

    Independence first Jamie and no matter how hard you try polishing a turd is impossible. People have long memories especially about pensions and we have not forgotten how Gordon Brown wrecked the final salaries schemes right at the beginning of that slow motion car crash that was the last Labour government .

  13. manandboy says:

    Justin, “rather than remain in the narrow confines of the constitutional question,”

    A young eagle is only a few seconds from leaving the narrow confines of the rocky ledge 300ft up a rock face where he has spent his whole life so far.

    And what is he thinking of – he’s only thinking of the wind as he spreads those unused wings and then, in a moment of time and with a little hop, he discovers something which no human being can even imagine.

    For us however, that moment , I hope with all my heart, will be toward the end of Sept 18th 2014,
    when this nation will fly on wings of self determination.

  14. Alasdair Frew-Bell says:

    Brown has history running the gamut from socialist radical to city catamite to unionist poster boy. He did little to curb the excesses of capitalists delighting in the “good times” and engaging with glee in all that Mansion House nonsense. When things went belly up he did turn rather self-righteous though. This was the “British jobs for British people” man who thought we “Britons” ought to celebrate the Battle of Trafalgar and fly the union flag more often. There will be an independent Scotland with a radical Social Democratic party but Brown is unlikely to be part of it.

  15. thanks.

    Interestingly, last time I saw a poll on it (last August) Miliband had an approval rating in Scotland of -43% (compared to -21% in the UK as a whole – I’ve got the various links in here: http://www.opendemocracy.net/ourkingdom/adam-ramsay/westminster-2015-will-snp-shake-things-up). That puts Brown’s positive figures in the months before the election in stark contrast, particularly given the fact that, across the UK, Labour as a whole are more popular now than they were then.

    I think there’s a broader point here. Miliband is in a sense a very English/London politician – the first leader of the Labour party since Michael Foot who hadn’t spent at least considerable periods of his early life living in Scotland or Wales. That’s not a criticism of him, but his failure to understand Scotland or to be able to articulate anything about Britishness shouldn’t come as a suprise. In a sense, he marks a transfer of power within his party from Scottish Labour to London Labour (think Cruddas, Glasman, etc).

  16. Iain Hill says:

    Two questions for Miliband (assuming you believe he is sincere):

    Can he translate fine words into realisable policies, and actually implement them?

    Can he carry his entire party, not least his MPs, with him in achieving more radical solutions?

  17. wanvote says:

    I hope Alex takes you advice Jamie and ASAP. It’s just not enough to keep dismissing Labour as having no credibility. Liar. liar pants on fire tactics are not going to change the minds of labour voters. SG need to hammer home in detail the austerity measures that Balls is currently pledging !

  18. David Agnew says:

    The argument for labour is Better together when we fail together? It increasingly looks to be the case. I have never seen a more idiotic series of arguments. From Darlings projection of his utter failure as chancellor in 2008 onto a hypothetical independent Scotland, to Scottish labours deluded belief that it can nick £2 billion of Scottish tax payers money to pay for austerity mitigation in England, while increasing income tax in Scotland to make up the difference. They think Scotland will be quite happy with that arrangement. They want to do away with devolution then go run and hide in their council wards.

    You would think that 300 years of Union could have merited a more spirited defence, than this dreary austerity porridge they keep serving up. But they seem incapable of doing anymore than push the line of Scottish dependency. Oblivious to how badly this is playing in England.

    Nothing will ever be the same after this vote. Even in the event of a no vote. Nothing can ever be the same after trashing Scotland’s reputation within the union. Scots are never going to be able to feel British ever again. It’s never going to be a comfortable fit ever again. For those of us who vote yes, we will come to resent it as we never have before. We will resent it the way the previous generation came to resent the conservative party in Scotland. For those who voted no because they were scared of “uncertainty” – they will feel cheated. For those who believed in Union, but not enough to ever speak out at Scotland’s humiliation by “bettertogether”…I wonder how they will feel when they are mocked for voting no because they are whiners and subsidy junkies?

    The one thing we can be sure of, is that yes or no, the Union is finished. I pray to god that is yes, as a merciful and quick death for the Union, would be better than the prolonged and painful death it will suffer in the event of a no vote.

    1. braco says:

      Chrystal clear analysis David. Can’t disagree with a thing. Many of these points should be brought up in conversation with undecideds and/or scared NOs as a counter balance to all the positive points that are core to our argument for YES (but already so well rehearsed).

      Thanks for stating them so clearly, it will be very useful in the coming months.

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