First Thoughts on Friday the Thirteenth

I woke up this morning to the results of our worst General Election defeat in decades. We knew the polls were bad but still you always campaign in hope and we believed that even if we did not win we could deprive the Tories of a majority. Hope turns to disappointment but not despair.

While the media focus on the number of seats we hold, a level similar to the dark days of 1983, I draw some comfort from the vote share. In 1983 Labour took 27.6% of the vote; yesterday we had 32.2%. That is a higher share than Gordon Brown won in 2010 (29.0%) or Ed Milliband in 2015 (30.4%). Remember that Tony Blair won a majority in 2005 with 35.2%.

However, it is too soon for that kind of analysis. The numbers will be spreadsheeted to death in the coming weeks.

There is another kind of reflection and analysis which we will need. I believe we should not look at this election in isolation but examine the three national votes held in the last few years; the referendum, the 2017 election and this one.

Too much of what will pass for analysis will be commentators expounding views they held well before the results were known. They will pin the blame on Mr Corbyn or on the Brexit policy or on the radicalism of the manifesto or whatever aspect of the party they already didn't like. I believe we need a more honest, measured examination. We must be willing to change our minds, to listen to insights that may be uncomfortable, to recognise where reality differs from our views and to accept the facts we uncover.

Referendum
We have not yet fully come to terms with the meaning of the referendum results. We have not listened enough to those who voted Leave to understand why they made that choice. Instead Remainer commentators have offered their own explanation of the vote. Leavers were ill-informed, didn't understand the issues or were misled by dishonest propaganda. They were "little Englanders" bewitched by imperial nostalgia. their grievances were domestic problems nothing to do with Europe. Or they were "left behind" by globalisation, as if globalisation was a train we had all consented to board.

That leads to the first set of questions. I think we need to understand better the political alienation of the working class that made "take back control" such an appealing slogan. I feel that without taking time to connect with them in their own terms we will remain vulnerable in our heartlands.

2017
One of the surprises of the 2017 election was the popularity of Jeremy Corbyn. His sincerity and authenticity, which those who knew him already admired, was able to communicate itself to a wider constituency. The press threw the same slurs then  as this year but they did not stick. So we have questions about why that changed and what lessons can we draw for any future leader.

Labour's radical 2017 manifesto was popular. Policies which could be portrayed as hard left, like nationalisation of utilities, had public support. Those attacks seem to have hit home this time. Some will argue for abandoning more radical ideas. But if we pose the question of why radicalism was popular one year and less so two years later we may come up with more useful answers.

Polarisation
A final set of questions concerns how we campaign in a time of increased polarisation. In a polarised polity people are choosing which facts to believe selecting the evidence that suits their conclusions. We will need to examine how to go beyond the tribes. But first we must be able to escape from our own bubble and listen to other voices.

There will be plenty of other questions, like legislating to control social media campaigning and improving our campaign tools. But that is enough for now.

Austerity Remains

As someone who campaigned for the UK to remain in the EU and who believes that no exit deal will be as good as the deal we have as members of the EU, I subscribe to a number of Labour pro-remain groups.

From time to time one of these groups makes a false claim or cherry picks the evidence to support a particular course of action. I try to put these comrades right especially if they are likely to mislead people on important economic issues. I particularly object to claims that leaving would compel a Labour government to continue austerity.

The latest campaign to fall for this lazy argument is Remain Labour. On the basis of a curiously inept economic briefing this group has been lobbying the front bench. When I saw the letter it had sent to John McDonnell, I contacted the group to explain why a smaller tax take does not automatically translate into austerity.

The claim in the Briefing that lower government receipts could force the next Labour government to impose austerity is not only false but serves to legitimise the phony idea that austerity is somehow inevitable if government income is compromised.  

A moment's thought should be enough to see that the last Labour government did the reverse. Faced with an actual fall in tax receipts, not just a smaller increase than might otherwise have been expected, Gordon Brown's government cut taxes and brought forward spending particularly on investment. Why then would a Corbyn government default to austerity when slower than expected GDP growth limited growth in government revenue?

I have yet to receive a reply.

The group's claim is that leaving the EU on the terms Jeremy Corbyn had offered to the prime minister would cost the government finances £24bn. This is not a figure you will find in any reputable analysis. It is a number Remain Labour have arrived at apparently by splitting the difference between two estimates constructed using completely different methodologies. They base their case on a study carried out in a collaboration between the LSE and King's College which concludes that after ten years GDP would not have increased as much outside the EU as it would inside and consequently the fiscal position would be poorer.

This week the group's founder, Andrew Lewin, followed up with a letter to the secretary of state for education, Angela Rayner. This time he had persuaded a number of youth and student leaders to sign up to the argument that Labour could not deliver on its manifesto promises on education if Britain left the EU.

Labour needs £25bn to pay for its National Education Service and Early Years reforms set out in the 2017 manifesto. At the same time, the cost of Labour’s ‘alternative Brexit plan’ is £24 billion per year to the economy.

I wrote to Mr Lewin.

The interpretation of economic evidence can be difficult. In this case you have drawn an equivalence between additional expenditure funded from taxation with the estimated difference in long term fiscal outcomes under two scenarios. Clearly they are not comparable figures.

More seriously your claims misrepresent the conclusions of the study on which your analysis rests. The LSE/Kings study does not suggest a deficit nor a fall in government income. Its claim is that public finances would not increase by as much as they would compared to remaining in the EU.

To illustrate the significance of this error, assume that GDP would grow at 1.5% per annum in a remain scenario. Then a the end of the 10 year period to which the study refers the fiscal impact would be an increase of 6.4% of GDP, based on the same assumptions as in the study. It is from this figure that you would subtract the 0.4% - 1.8% fiscal impact of leaving the EU. That means the chancellor would still have an additional 4.6% - 6.0% GDP to allocate however he wishes. That is around 96bn to 126bn.

You also seem to have missed the significance of timing. The methodology of the LSE study does not allow it to say anything about the short term, but the shadow cabinet spending plans are precisely short term. A Labour government would implement its plans during its first years in government. The LSE study tells us nothing about the fiscal position at any point before its ten year horizon.

 If I get a reply I will give an update on this blog.