The Thick of It

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Tuesday, October 26, 2010

Opposition is still not enough

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Just opposing the Tories' cuts won't be enough to propel Ed Miliband into Downing Street. Not being the Tories is helping slightly and not being Gordon Brown is too. Current opinion polls show Labour and Tories neck and neck with the Lib Dems dropping to pre-1997 levels. The government's approval rating is already negative demonstrating that perhaps 2010 was a good election to lose.

YouGov put both Labour and Tories on 40% each and Populous gives Labour a slight lead. If Labour's top team, and it has to be a team effort, can get the right messages across the Tories' popularity is likely to slide as their cuts come into force, and Labour's should increase.

The key for Labour is to get the right messages. It isn't enough to simply shout about the unfairness of cuts. Labour has to make it clear why the deficit exists and also what it would do about it. Doing things differently is important because many have pointed out that the spending review takes UK public spending "back" to the same levels as in 2006. We were fine in 2006 weren't we? It all depends. At the end of this four year cycle Britain's public spending might be at the 41% of GDP it was in 2006 but we won't be living in the same country any more. The spending review takes very different slices out of the cake than those that were added between 2006 and 2010.

Treasury advisor Colin Talbot points out that 41% of GDP is still 2% below the post-war average. We're looking at a Tory government that is becoming obsessed with the level of GDP spent by government. Margaret Thatcher tried and failed to cut it to below 40% and Cameron is aiming at the same target by planning to cut further after 2015.

Talbot argues: "Shrinking the size of the state is a perfectly legitimate policy aim – but it is not one anyone voted for at the last election because none of the three main parties put it forward". 


The politics has to be right, the messages have to be consistent and well targeted. Opposition alone isn't sufficient.

Thursday, October 21, 2010

What it all means

The political and economic impact of yesterday's spending review are huge. Politically Labour is rightly trying to tread a careful path between accepting that some cuts were needed and proposing a realistic alternative. The economics can be laid out in tables and charts though the real impact won't be felt for another two years.

Politically Labour's response was encouraging. Alan Johnson contrasted with Osborne's tone and set out a viable alternative. This is based on believing Keynesian economics instead of the fiscal orthodoxy presented by the Tories. Protecting employment is the best means to protect and encourage growth. The Tory plan to lose half a million public sector workers is likely to lead to more lay offs in the private sector as many firms (like my own) rely on government contracts. Redundancies will increase the welfare bill, not cut it. I hope that Osborne's optimism that the private sector will automatically fill the gap created by the cuts will prove me wrong.

Economically the poorest will have to dig deepest as a result of Gideon Osborne's spending review yesterday. The government's own figures (page 98) show that the bottom 10% will lose a higher percentage of their income after yesterday's changes come into force. The spending review, shown in green, takes the most from those at the poorest end of the scale.

Graph
The spending review puts growth in doubt. When business and individuals are not confident about the future they spend less. Less spending and investment threatens growth. This sort of response to fiscal crisis has in the past deepened recessions, not made it easier.

I'm reminded of the 1997 Tory slogan: "yes it hurt, yes it worked." Then as now the Tories are ideologically opposed to the state investment Labour made. They want a smaller state as much now as they did in the 1930s, 1980s or 1990s. The Tories spouted the mantra of change at the election. They were right to, because they will change the social fabric of the country, but they haven't changed at all. This will certainly hurt. I'm not sure it will work.

Wednesday, October 20, 2010

Opposition is not enough

I wrote on Monday that it will be insufficient for Labour simply to oppose everything the Tories do. The 1980s showed that not being the Tories just wasn't enough to put Labour into power when Labour wasn't attractive to voters in itself.

A Politics Home survey of "informed political opinion" (yes, I did take part) released today bolsters this view. Asked what Ed Miliband and Alan Johnson should do in response to today's spending review, 60% stated that Labour should focus on providing alternatives, including cuts, to show how they would do things differently. Only 35% thought Labour should focus on the pain the cuts will cause. "Simply bashing the government for cutting spending will not work for Labour."


Notably Labour "insiders" were split almost 50-50 on which course of action to take. Those identifying with other parties much more forthright. This just highlights that a core-vote strategy won't work. Labour needs to persuade those who voted Tory and Lib Dem who feel let down and will be let down by this spending review and in the next four years. Their views are clear. I await Ed and Alan's response eagerly.

Tuesday, October 19, 2010

How companies and politicians are using social media

When I'm not writing this I'm working at Metrica, where I write for the Measurement Matters blog. I write a weekly column Tim's week in social media where I highlight the most eye-catching developments in social media in the last week. 


My work involves helping companies understand the impact social media is having on them and helping them to work out what to do about it. Yesterday the BBC's Rory Cellan-Jones presented a short piece about this - in general, not about me - watch the short film below.







The lessons for politics should be obvious. Politicians and political parties have a brand image to protect and need to engage in the same way that the most forward thinking companies are with social media. In the past it was enough to talk at your target audience or voters but not necessary to engage with them. The benefits are the same: the more people are engaged with you and receive a positive response the more popular you are likely to be. You should not need to write a letter to your local representative or meet them at a surgery if you need help. Social media should make it easier.


Much has been made of Obama's use of social media to recruit and activate a huge volunteer base. Less has been said of politicians that use social media to engage their voters with their work ongoing. 


Mashable's account of how US politicians are benefiting from social media shows that by opening themselves up to feedback has added a human touch to communication and allows more of their constituents to communicate with them. It allows more people to see more from their representative and to communicate directly with them. Social media is creating a wider community around both brands and politicians that embrace it.  


Blogminster appraises the web presence if the UK's 645 MPs. This shows that there is a lot going on in the UK among politicians already. The best are taking part in conversations with the wider community while many more blog as another means of telling people what they think. 


Like any channel of communication social media is only worth engaging with if you have something useful to say and defined objectives. For the sake of it or because others are doing it doesn't count. Most politicians are missing out on an opportunity to speak directly with more of their constituents than they will ever reach by knocking on doors. 


Others like Vince Cable just look silly. "He" ran a Twitter account for the election, which he hasn't taken down. In a raft of posts he criticises his future Tory masters, including the gem about his current boss: "Osborne is totally out of his depth.


What goes online stays online. Cable shows that you need to understand what you are doing otherwise you'd be better off leaving social media alone. Poor old Vince. It wasn't meant to be like this. 

Monday, October 18, 2010

Is it enough to not be the Tories?

This week's spending review is likely to unleash a nasty raft of cuts to government spending. The real effects of this will be felt over the next two to three years as services are gradually withdrawn. The mirror with Geoffrey Howe's deeply unpopular budget of 1981. Despite tax increases and public spending cuts being incredibly unpopular Labour failed to benefit because it wasn't focused on offering a feasible and credible alternative. What makes George Osbourne's spending cuts any different from those of Howe almost 20 years prior? Will an unpopular Tory government automatically propel Labour back into power in five years?

There are many arguments against the Tory plans:

  • Osbourne's plans will hurt and I don't expect the cuts to be "fair". The botched cuts to child benefit recently announced show that many of the plans will be ill thought out. 
  • The cuts are too hard and too fast not just from the Labour Party. This is my view. Taking so much money out of the economy will stall growth. It is also short-sighted to suggest that £1 spent by the government is £1 gone from the coffers. Much of that £1 will come back in VAT, corporation and income taxes. That won't happen now. Instead the economy will shrink, meaning recovery will become recession.
  • The state's finances are not worse than expected. It is disingenuous of ministers like Vince Cable to claim that the current government finances are worse than expected. The state of the public finances are public and widely known. He is simply playing the fall guy for cuts and policies, such as tuition fees, that the Tories wanted to put in place anyway.
  • The political problem for Labour is that the cuts will be blamed on the poor state of the nation's finances, which is Labour's fault, according to the Tories. That narrative will ignore the huge investment made to recapitalise the banks and in public spending to keep the economy going. Labour needs to respond that this was unavoidable. 
Significant though these are, none of these counter claims are sufficient for Labour to benefit from the Tories' unpopularity alone. Current polls show Labour edging into a small lead. To build on and sustain this, Labour needs to present a viable and credible alternative.  With a new leader that may take time, but having a leader at all is progress from the previous five months of an "empty chair." The quicker Ed Miliband can start setting out his alternative plan the better.


What does a credible alternative plan look like? It needs to show that both the deficit and growth are important. Cutting the deficit so fast could be a zero sum game, cancelling out growth that will itself increase tax receipts and reduce the deficit.

Labour's plan has to, and will, accept that the deficit needs to be tackled. It also needs to show that the better off would pay more than those in the middle and at the bottom. It needs to be fair and sensible.

If Labour's response is good enough perhaps David Cameron will start looking for a "popularity" war like the Falklands...oh, we can't afford one.

Friday, October 01, 2010

A loss to politics

Like many I am disappointed that David Miliband has relegated himself to the backbenches. I mentioned before his decision was announced that many politicians before him have been defeated in leadership contest then gone on to serve under their conqueror.

In the 1980s Denis Healy lost the Labour leadership election to Michael Foot but became his deputy. Kenneth Clarke lost the Tory contest three times, yet didn't shy away from the front line. In today's Telegraph Peter Oborne argues that there is more vanity in politics today than back in the day. He is partially right. I think the party and cause matters more than anything else.

Perhaps the family dimension makes this case different. I hoped that a commitment to the Labour cause would have won through. The media might get tired of the soap opera allowing MiliD a path back in the future under his brother - also for former leading light James Purnell.