As we approach the budget, full of apprehension, with both business and consumer confidence plummeting, the former having taken a further hit with this week’s second reading of the Employment Rights Bill -adding five billion pounds to business costs, I’ve been considering how Labour’s first few months have gone so spectacularly wrong.
I put it down to lack of focus on what ought to have been their main effort.
As officer Cadets, our training at Sandhurst drummed into us the that first principles (of war) were the selection and maintenance of the aim: you have to choose your overriding priority and then stick to it.
The Massai put it rather more elegantly: Huwezi kuwafukuza swala wawili which, paraphrasing from the Swahili, means ‘you just can’t chase two gazelles’.
Labour’s stated overriding objective was economic growth, summed up by the Chancellor, Rachel Reeves, as ‘invest, invest, invest’. Yet the main effort of the first weeks after the election was clearly something quite different: The new administration was determined to frame a narrative in the public mind that it had been bequeathed a disastrous legacy by the wicked Tories who had pursued a ‘scorched earth policy’ leaving behind a wasteland, everything broken and a massive financial black hole; And that, as a consequence, things would have to get worse before they could get better, and the Government was going to have to do some very painful stuff by withdrawing Winter Fuel Allowance from some nine million pensioners, with much worse to follow in the Budget on October 30th.
This political strategy has a long lineage: You get into Government and announce that you never realised things were really this bad. The Coalition Government did exactly that in 2010 when it inherited from Labour a financial deficit of fully 10% of the national income, which dwarfs the mere 4% (and already in steep decline) that the new Labour Government inherited this July.
Nevertheless, Labour’s pursuit of this same strategy was clearly at odds with their stated priority of securing growth through investment, which requires confidence and optimism, not the misery spouting from government commentary. Little wonder that business confidence, which had been soaring, plummeted.
The Government’s stated priority would have been much better served by rehearsing the positives that it had inherited Viz. the fastest growth and the second lowest debt in the G7, inflation firmly under control and interest rates falling, record low unemployment. All of which is now at risk as a consequence of the bucket of cold water that the Government has poured over them.
Add into this mix ‘wardrobe-gate’ and the mayhem in 10 Downing Street with the defenestration of the PM’s Chief of Staff, Sue Gray, and it makes nonsense the corporate stooges who wrote to The Times last week praising political stability.