Thursday 11 June 2020

Do the Tories Fear Keir?

And the answer to that is ... some do. Every time there is a Labour leadership contest, some Tories come forward and let it be known they're super scared of this or that candidate. In 2010 David Miliband was said to give them squeaky bums. In 2015, it was Liz Kendall who sent the chills running down their collective spines. These were "endorsements" only the most politically naive would take seriously. At the time our David was on board with the "necessity" of austerity and wasn't about to offer the Tories a hard time in the Commons, and in 2015 Liz was even less likely so, given her almost total abandonment of Labourism. However, what was curious about the tediously long contest just gone was the dearth of Tories fighting to endorse any Labour candidate. Perhaps they were too busy dining out on their famous victory to notice or care.

Yet some Tories noticed, and some are worried. One of them is Gavin Barwell, known around these parts as the ex-bag carrier of the unlamented Theresa May. Tories are making a big mistake underestimating Labour's coiffured leader, he suggests, which is good news if we want to see the back of Johnson and friends in four years' time. So what are his workings?

First up, the opposition are less likely to be divided in the future. This is true in the sense he means it, that Labour and the Liberal Democrats will have a better relationship with one another. The practicalities of an unstated non-aggression pact will force themselves on acting LibDem leader Ed Davey, if he wins their eventual leadership election, but be more likely embraced with enthusiasm if someone from the left of the party is successful. Additionally, Labour itself is not about to be in the same position as it was before December's election, with confused factional messaging and the open rebellion of the parliamentary party. I doubt we'll get to the point of Blairist Borg discipline, but having a party all pulling in the same direction helps campaigning efficacy and perception of competence. After all, if you can't govern your own party you're not going to get enough votes to govern the country.

Second, Barwell appreciates the Brexit factor in the Tory vote much better than sundry centrists. This was obvious when May turned in a creditable performance in terms of votes cast in 2017, even though she lost the Tory majority. Brexit was the glue holding their declining coalition together, and helped boost it further when Johnson had a crack at it. What this election showed was how people were prepared to overlook the baggage successfully heaped on to Corbyn's shoulders as long as the party was seen to respect their referendum vote. When it became clear in 2019 it didn't, far from the promised 20-point leads Labour could expect had it gone full remain, the party instead had to console itself with the trauma of heavy defeat. Going into the election with one wedge issue, of leadership, was manageable. Going in with two was suicide. Yet without Brexit, where indeed will the Tories be? Even now after a partial collapse in trust, the solidity of Tory support still rests on the bloody minded fidelity to Brexit. Remove that, remove the Tory majority?

On his third and fourth points, Labour's path back to power does not necessarily rest on winning back its former heartland seats and could pick up more Tory seats in the South East, which would be strengthened by Keir's move toward the centre of politics. Leaving that aside for the moment, the jury is out on whether the coronavirus crisis will accelerate population movement trends. If there is any truth in the death of the office discourse, the distribution of jobs becomes less concentrated in London and the supermajorities for Labour we see stacked up in seat after seat can flow out as remote working rebalances the geographic spread of career opportunities and the London property pinch drives hundreds of thousands back to their home constituencies.

Fifth and sixth, in the eyes of the Keir-curious his response to the removal of Edward Colston's statue and to the government's handling of coronavirus is where most of the public are: wrong to simply tear down the statue minus the show of due process, but it shouldn't have been there anyway; support the government when they're doing the right thing, criticise them fairly where they mess up. Seventh, there's the desire for change, which will be hard for the Tories to affect after 14 years. Though not impossible - Johnson is proof the Tories can renew themselves in office when an (old) new face with new priorities comes to the fore. There's also the taste of the electorate to consider - after a showman, might they want sensible and boring?

Lastly, the path to a Labour majority is incredibly difficult without winning back masses of Scottish seats, but what isn't is the creation of an anti-Tory majority in parliament. A progressive coalition of some sort might work where it was a non-starter under Jeremy Corbyn, despite the comforting myths some on the left enjoy telling themselves. And Barwell is right - there has always been an anti-Tory majority in the electorate, but one divided along party lines. If it can be cohered to run in a similar direction then the chances of the Tories securing another term in 2024 diminishes.

In all then, quite a perceptive account of where Labour can threaten the Tories. Yet Barwell's focus on all things Westminster blinds him to Keir's biggest weakness. What he sees as a strength - his centrism - could act as the Achilles Heel. Retreading the old 1997 triangulation strategy might scoop up a layer of swing voters and post-Brexit refugees from the Tories, but at the price of alienating the new core constituency. This doesn't mean knocking a few votes off those London majorities, it would suppress the vote of our core support elsewhere, which would be absolutely fatal in the tight contests Barwell thinks could fall to Labour in the south. And with these voters moving/being driven out of London and the bog cities, the positive-for-Labour consequences of their dispersal is bound to be stymied. For a number of reasons, the new base does not habitually vote like the Tory core does and are more mercenary with their loyalties. If Keir cleaves too much to the Tory position on key issues, say backs landlords over renters, is seen to affirm the privileges of business and the old versus the young, or otherwise supports the present political settlement significant sections of this base can disengage completely, or boost fragmentation of the anti-Tory opposition by going Green or supporting the reinvented LibDems. They have somewhere to go, and will not be afraid of going - even if it increases the chances of the Tories getting back in.

If following the end of Brexit dominance we revert back to something like the pre-2015 situation, i.e. "normal" politics plus SNP dominance in Scotland, wiser Tories know Keir has a number of advantages that would play well when matters are less fraught and polarised. What they're blind to, however, is how conditional the Labour core is. They won't be forever, though. May and Johnson were sensitive enough to sniff the Brexit discontent in our voter coalition and worked, with differing degrees of success, at exploiting it. Looking at what remains, we should fully expect them to try and set Keir Starmer against the interests his party is supposed to articulate and prosecute. Avoiding their pitfalls means sticking up for what is right and refusing to accept the Tory framing of key issues. On this, he is largely untested but the initial signs, on internal issues, on "slapping down" MPs who talk out of turn, on renting, on confronting racism, on a growing number of little things, the initial signs ... aren't good. As such, if he persists down this line or, worse, listens to the siren voices demanding a reckoning with the left we will have the answer to the fear question: the Tories won't have to worry about a single thing.

Image Credit


James said...

It seems to me that the disappointment last year masked big shifts in the political dynamics in the south, which in the medium term work in Labour's favour. In 2017 there were huge jumps in Labour support in some real Tory bastions, and in 2019 these weren't reversed.

Take Worthing, which only 10 years ago was one of the most Tory towns in the country. In Worthing West, the more middle-class constituency, we used to come a poor 3rd with vote shares in the low/mid teens. In 2015 we were behind UKIP. In 2017 we leapfrogged to 2nd place with an increase in vote share of almost 20 points, to 33%. In 2019, despite the overall disaster, we only fell back slightly (to 29%), so we seem to be firmly entrenched as 2nd place with c.30% of the vote (still a way behind Tories). East Worthing & Shoreham is more socially mixed and Labour have historically done slightly better, but it's always been a Tory seat. There, we had a 20-point jump in 2017, coming within 9.5 points to make it a target seat. Last year we fell back, but again, only slightly - we're now comfortably in the high 30s (39% in 2017, 37% in 2019), and if the Brexit coalition fragments we could take it. Meanwhile, in local politics, we've gone from not having had a seat on the council for *40 years* to winning 9 seats from the Tories between 2017 and 2019.

The same pattern is happening across the SE - e.g. Southend West, where again we jumped from teens to 34% in 2017, and then fell back only a little in 2019. It's easy to dismiss this with "you didn't win though," but these are huge swings to Labour in places we've never done well. This must be partly about demographic change (younger, more diverse), in the opposite dynamic to the so-called Red Wall seats. But it's also about political change within demographic groups - the young working-class people in Worthing in the 1990s were mostly Tories, now they're not. With all the rhetoric about the Red Wall, I think there's a real risk the Labour leadership are trying to fight on a 1990s electoral map that just doesn't exist anymore.

Ken said...

I might remain a paper member for the moment, however, what I can see is a Pasok moment when a smug centrism is completely unable to comprehend the scale of what is necessary to rebalance the economy. A train wreck will ensue with, as you suggest, the under 40s in that new class go elsewhere or nowhere. FPTP makes a Syriza unlikely. No doubt, JC/Momentum will still be being blamed for this.

Jim Denham said...

Once again, Phil, you fail to give a coherent case for your softness on the Brexiteers. If you believe Labour lost in 20019 because it didn't come out for Brexit, then simply say so. It would have been a shameful capitulation to nationalism and racism,and alienated many members but perhaps you'd regard that as a price worth paying. I've previously asked you (and I don't think had a reply)why, if that is your position, you didn't advocate Labour supporting May's attempts to achieve a Brexit deal in 2016/17? Or did you (privately)?

What we probably can agree on is that Labour's 20019 position (in defiance of its overwhelmingly anti-Brexit membership) was about the worst of all possible worlds:half-hearted obstruction and a call for a further referedum but no clear pro-Remain case of explanation of why Brexit is such a reactionary, racist and anti-working class cause.

Jimbo said...

Starmers approval rating is the highest for an opposition leader since Blair in 1994. At last some light at the end of the tunnel.

Blissex said...

«Starmers approval rating is the highest for an opposition leader since Blair in 1994.»

Well, the centrist and right wing press have been praising one of their own.
But as to voting intentions the gap has been like 48-33% (much, much higher than with Corbyn's mildly socialdemocratic programme) until the Cummings affair, that has switched around 5% of voters.
"Voting Intention: Con 53%, Lab 32% (16-17 Apr)"
"Voting Intention: Con 50%, Lab 30% (5-6 May)"
"Voting Intention: Con 48%, Lab 33% (18-19 May)"
"Voting Intention: Con 44%, Lab 38% (25-26 May)"

That Starmer leadership has been like magic for the Conservatives.
Even after a series of deeply unpopular idiocies and bungles by this dreadful Conservative government they maintain a huge lead over New Labour, when with a reasonably good leader Labour would have a big lead over them.

Blissex said...

«If you believe Labour lost in 20019 because it didn't come out for Brexit, then simply say so. It would have been a shameful capitulation»

But in 2017 Labour was like in 2016 and 2019 against Brexit, as Corbyn and McDonnel said they would have voted "Remain" again, and that Labour is a "Remain" party.

What Labour did after 2016 was to concede that the result was democratic and it would not oppose its implementation. Labour lost the "Remain" argument and accepted it, arguing that while it could not oppose that result, exit had to be the softest possible variant.

What about the "irreducibles", those who tried for years to reverse the result of the referendum instead of accepting they had lost a democratic vote? Well, far from winning an overwhelming mandate, even if Tony Blair and others claimed that a majority of voters had switched to "Remain", they got rolled over, and almost all of them disappeared as soon as using "Remain" purely as an anti-Corbyn issue did the trick.
One of them, largely responsible for creating a policy that caused the loss of seats that had been Labour for generations, however got elected leader by the membership, under I guess a "worse is better" logic, fooling themselves with believing the hints that his politics would continue to be mildly socialdemocratic like those of Corbyn. A delusion that did not survive his appointment of his shadow cabinet.

Boffy said...

"But in 2017 Labour was like in 2016 and 2019 against Brexit, as Corbyn and McDonnel said they would have voted "Remain" again, and that Labour is a "Remain" party."

The part and its voters were, but unfortunately Corbyn and those around him weren't! That was one reason why that, as with his duplicitous position on other issues of principle eroded support from 2017 onwards.

"Labour lost the "Remain" argument and accepted it, arguing that while it could not oppose that result, exit had to be the softest possible variant."

In 2017, that was true, and the Five tests really meant no Brexit. That is why Labour did well in 2017. After that Corbyn and his Stalinist entourage did everything to undermine it.

"What about the "irreducibles", those who tried for years to reverse the result of the referendum instead of accepting they had lost a democratic vote?"

You mean in the same way that whenever Labour has lost a vote in a General Election, it refuses to accept the result by abandoning what it believes in, and instead tries to reverse the vote, by getting another election, and trying to win it?

"Well, far from winning an overwhelming mandate, even if Tony Blair and others claimed that a majority of voters had switched to "Remain", they got rolled over, and almost all of them disappeared as soon as using "Remain" purely as an anti-Corbyn issue did the trick."

But, it was Corbyn's pro-Brexit position that led to that, and Remain was not an anti-Corbyn trick, but a point of socialist principle. If it was a "trick" then how stupid was Corbyn for not seeing that, and placing himself firmly at the head of his party, and votes who overwhlmeingly support Remain, by adopting that position clearly and firmly himself. Reamin was not an "anti-Corbyn" trick, it was Corbyn who deliberately put himself in a hole, by continually refusing to provide principled leadership to the mass opposition to the Tories, and their reactionary Brexit agenda, because he placed his own reactionary nationalist agenda first.

Ken said...

Let’s all panic!!
Let’s all pile in to argue we must raise taxes to solve the problem of the 20% drop in GDP last month.
Let’s do austerity because we’re a grown up party, and we’re modern Keynsians.
Let’s mutter about the crisis of National Debt, say we’re very sorry but, can’t do all the mildly Social Democratic things we’d like to.
Or, we could read Tax Research 2, blogged by Prof. Jim Murphy of Tax Justice and more; and act on it.

The national debt is going to squeeze the life out of our economy. We have to stop it growing, even if it literally kills us to do so.

Replies to we must deal with the National Debt.

There is no such thing as a ‘national debt’. There are notes and coins, National Savings and Investments accounts and the bonds that pension funds, life assurance companies, banks and overseas governments like to save in. And there is also the £635 billion the government includes in what it calls the national debt but which it actually owes itself. Where’s the debt in all this?

Reply 2

We don’t call bank deposit accounts ‘bank debt’. Nor do we say banks must do everything that they can to repay those deposit accounts as soon as they possibly can. So why when the government provides savings facilities, which we call the national debt, do we say it’s such a bad thing so they must repay it as quickly as possible?

Reply 3

We have almost never reduced the savings accounts balances that are described as the national debt since it began in 1694. When we have it’s been by tiny amounts. So why are we so obsessed with repaying it now?

Reply 4

What some call the national debt is actually private wealth. This must be the only type of private wealth that some in society are desperate to destroy right now.

Reply 5

The national debt is wrongly named. Some is the Nation’s Cash. Some is National Savings and Investments. And the rest is National Bonds - the capital of the country that people are really keen to buy. But none of it is debt as we normally think of it. So what, precisely, do we want to get rid of?

Reply 6

Just try getting rid of what you call the national debt. We’ll have no cash. We’ll have no safe savings accounts. The bank, pension and life assurance sectors will find it almost impossible to function, and foreign governments will have nowhere to save the sterling balances they’re really keen to hold. So sure, you can try to get rid of it. But what are you going to do about the economic chaos you’ll create as a result?

Reply 7

All our cash is included in the so called national debt. If you don’t want your cash I’d be pleased to have it.

Reply 8

Because we have what's called a national debt on which interest is paid the government can, through the Bank of England, control interest rates in our economy by setting the rate it is willing to pay. That's been used to keep interest rates low so that we can afford our own interest costs. Would you rather the government lost control of interest rates and your mortgage and credit card costs sky-rocketed?

Reply 9

The national debt lets the government control interest rates. And that is one of the tools used to control inflation. Without the national debt it would be much harder to control inflation. Is that what you want?

The evidence is argued further on his blog. Subscribe.

Boffy said...

A bigger load of cobblers and belief in the magic money tree I have never seen.

The huge amounts of debt and borrowing will cause interest rates to rise. Because the rate of interest, as Marx demonstrated is the market price for the use value of money-capital. If the demand for that money-capital rises whether to be used as money-capital to fund expansion, given that the lockdown has destroyed profits, and indeed sales, or to be used simply as money/currency to fund consumption, or pay bills then the rate of interest will rise. That is particularly true given that the supply of additional money-capital comes from realised profits an from savings both of which have been decimated by the lockdown. A sharply increased demand with a sharply reduced supply means a sharply increased price, i.e. rate of interest.

The idea that this could be solved by the MMT is nonsense as again Marx demonstrated long ago. Simply printing more money tokens devalues those tokens. Its why doing so over the last thirty years and using them to buy bonds, shares and property caused a hyper inflation of those assets. Doing so to fund consumption, i.e. to buy commodities instead will cause a similar hyperinflation of commodity prices. As workers have to pay higher prices they will need higher wages, as firms have to pay higher wages and higher input prices, they will need to borrow more money-capital to fund it, and as the government faces higher prices and wages for its spending, so it too will need to borrow even more, so that as Marx describes, all you have done is change he unit of measure on either side of the equation for the demand and supply of capital, leaving the interest rate unchanged. Except of course, that as already stated the actual demand will have risen massively and supply contracted massively.

A sharp rise in interest rates is inevitable as the lockdown ends and production resumes, and it will cause a financial crisis that will make 2008 look like a blip.

Ken said...

Ken asked the MMT advocate for a reply, thus

“ He might as well believe in the gold standard

And he has clearly read nothing of MMT - which shows that money does not come from profits

So to be polite he's writing 19c drivel in response to a 21c situation

Boffy said...

Quite right money does not come from profits, and I never said it did. Clearly Richard does not know what money is, and confuses it both with money tokens, and with money-capital, and so cannot possibly understand what either inflation or interest rates are either.

This debate was had 200 years ago, and I'd suggest he reads both Capital Vol III, and Theories of Surplus Value Part I, Addenda to see what those things are, and why the Magic Money Tree is a delusion.

To be clear, what I said was not that "Money" comes from profits, but that additional money-capital comes from profits (taking profits to be as Marx describes in Capital III, prior to the deduction of interest, rent and taxes). So, it also means that those receiving these revenues can increase or decrease the amount actually going to productive consumption, i.e. actually being used as money-capital, rather than unproductive consumption, i.e. purely as money/currency, or can simply throw it into the money markets as additional supply of money-capital.

If you don't understand the difference between money and money-capital then its no wonder you don't understand what interest rates are, and so fall into the same error as Locke, or as promoted by Overstone et al, and demolished by Marx in Volume III.

But, if you also don't understand what money is, and confuse it with money tokens as proponents of the Magic Money Tree clearly do not, then its no wonder you don't understand the basis of inflation, or why printing more money tokens or creating additional credit simply devalues those tokens, as Marx describes in A Contribution To The Critique of Political Economy.

“Massie laid down more categorically than did Hume, that interest is merely a part of profit. Hume is mainly concerned to show that the value of money makes no difference to the rate of interest, since, given the proportion between interest and money-capital—6 per cent for example, that is, £6, rises or falls in value at the same time as the value of the £100 (and. therefore, of one pound sterling) rises or falls, but the proportion 6 is not affected by this.” (Marx, TOSV, Part I,Addenda, p 373)

So, to put it politely, Richard is simply repeating the 18th century errors of Locke in relation to money and interest, that were themselves rehashed as good coin by Overstone and other bankers in the 19th century as though it was new. It was tosh then, and remains tosh now.

Boffy said...

Just for clarity I do not, and nor is there any need to believe in The Gold Standard, which represents simply a form of commodity fetishism. But, it is necessary to understand what Money is, as well as to undestand the difference with Money-Capital.

Money represents a claim on a quantity of value/social-labour-time, and Marx demonstrated that value is objectively determinable, placing the study of it on the same kind of materialistic basis as all other science, as opposed to the subjective basis that orthodox economics utilises. On this basis, it is not at all necessary to believe in the necessity of a specific physical manifestation of this value in a quantity of gold, silver or any other money commodity, to understand that their is a materialistic objective basis to value, and to its equivalent form.

As Marx demonstrates in the Contribution that can just as easily be achieved by a money token, be it a gold coin, paper note, or electronic digit, provided those tokens are put into circulation in the appropriate quantities. Too many, and the tokens themselves are simply devalued causing money prices to rise.

As Marx says, "Gold circulates because it has value, paper has value because it circulates."

As Marx describes, quoting Massie if firm A demands £100 of money-capital to buy elements of productive-capital, with a current price of £100, if money is printed so that money prices rise to £200, this additional supply of "money" does not change the rate of interest, because by depreciating the currency the prices of those commodities rise to £200 so that the company must now demand £200, not £100. So, the rate of interest is unchanged.

But, Marx also quotes another important point from Massie. A firm that demands £100 of money-capital will not pay 5% interest for it, if the rate of profit is only 4%. A government, or a firm that needs money not to use as money-capital but as currency to pay bills, however, must pay whatever rate of interest is required. So, when such conditions apply and governments, businesses and households need money simply to pay bills, i.e. money as currency not as money-capital for productive purposes, the rate of interest rises to its highest levels.

Boffy said...

Indication of the potential for the imminent rise in inflation can be found In these Papers By The IFS.