Labour should definitely take Truss very seriously. Keir Starmer can't rely on Truss's gaff magnet to sink her premiership, especially when he's prone to stepping on rakes (the mishandled picket line farce being another example of his clod-hopping leadership), but in my view John's right for the wrong reasons. For one, a lot of senior Labour people put great store in authenticity. Having gone straight from university (usually Oxbridge) into some wonkish non-job and then gifted a parliamentary seat, it's easy to understand why many benefiting from this route to the top feel their rootlessness keenly. Embarrassingly, Keir Starmer often talks about his mum and dad (and occasionally his care worker sister) to burnish his plebeian creds. Our friend Wes Streeting is another example - be prepared to hear about growing up with mum in a council flat many times before his political career ends. But this fetishism of authenticity is complete nonsense. People don't particularly care about politicians' backgrounds. If wealth was a handicap, Sunak would not be a front rank Tory and Jacob Rees-Mogg would be idling at home instead of reposing on the green benches. Relatability is much more important.
Let's consider Truss again. I don't think she comes across as warm or sympathetic, let alone "fun" as per her Tory character references. But like all successful right wingers she has cultivated a "truth telling" persona. She will tell you what you need to hear, not what you want to hear. It's not for nothing that all of her TV debate appearances has her repeating "I know what a woman is" - the Truss version of "it's not racist to talk about immigration." It says here's someone unafraid of ruffling feathers and defying the you're-not-allowed-to-say-that brigade. None of this is true, of course. The one service Sunak's doomed leadership bid is performing is the relentless exposure of how Truss's campaign centres on telling Tory members what they want to hear. Even if her relatability is entirely contrived, in tone and countenance she is better than Starmer and most of the shadow front bench. She hasn't had the Labour media training that makes its politicians sound like they're reading off a script, and has them coming across as robotic, patronising, and nasally insincere.
Truss is aware that her patter isn't coiffured, though this is more of an asset than she supposes. But this is marginal to her appeal. Her semi-official slogan is delivery, delivery, delivery, and she bangs on about the problems she's overcome, the trade deals she's signed, and "standing up to Putin" - an easy job when the Ukrainian army is doing that for you. She's served up the goods as far as the party members are concerned. Sunak, on the other hand, has gone from dishing up the noms with Eat Out to Help Out to cooking an unpalatable main course of tax rises and "socialism". Therefore, it's deeds not words where the electorate will be paying attention. As John notes, reversing the National Insurance increase and cutting the Green Levy puts money into people's pockets. It is not much set against the pain to come, but sets up Truss's government for more intervention and makes it look active. Like all Tories, she is going to try and do as little as possible for as long as possible, but if the politics demands it her delivery mantra could encompass severe regulation, if not outright nationalisation of the energy companies. It would be caveated as a temporary measure and I doubt it would return bills to where they were this time last year, but a move like this is decisive, popular, and would force some put off by Boris Johnson to reassess their relationship to the Tories.
This is the danger for Labour and Starmer's leadership. With a shadow chancellor firmly in hock to Treasury orthodoxy, and therefore City interests, Rachel Reeves's pathetic marginal cut in VAT on fuel is weaker than anything Truss is presently offering. If Starmer is serious about winning an election, and long time readers know I have my doubts, a repeat performance of his non-opposition during the acute phase of the pandemic will not wash. John advises, "... Attack the new Prime Minister and her government, but don’t nit-pick. The critique must be based on a vision of hope and a positive project ...". If delivery is her watch word, then Labour must have a better plan to counter it. Yes, that means nationalising energy and imposing price controls - no shilly-shallying with wonkish dithering and tinkering. The moment demands Labour steps up to the plate, and if it does people will listen and the chances of winning in two years moves further up the probability scale.
If John, the Blairite's Blairite is pushing this, and Gordon Brown is likewise agitating for firm action, Starmer's going to have to grasp the nettle. If he doesn't, Truss's Tories are on course for stomping Labour for the fifth time in a row.
6 comments:
This is indeed very worrying for Labour. However, Truss will still have to tackle issues and it is worth noting that Electoral Calculus polling shows a lack of enthusiasm for either Truss of Sunak amongst the public (which will of course shift and change as time gores by). This is in contrast to Johnson with the exact polling before he became PM in 2019 - he was popular (with large sections of the public) and most importantly cut through to non Tories - before he became PM. In short Johnson was indeed (in 2019) the 'Heineken candidate'. Richard Seymour's analysis on PTO makes a similar point.
«Therefore, it's deeds not words where the electorate will be paying attention. As John notes, reversing the National Insurance increase and cutting the Green Levy puts money into people's pockets.»
The big question is whether the Conservatives want to hold on to their 80 seat majority, minimizing losses, or they want to take risks to potentially increase it.
If they want to take risks to potentially increase it then they need to appeal outside the magic circle of affluent propertied "Middle England", and then N.I. and Green Levy cuts may matter, however small they are.
But if they are happy to defend their majority, based on 14 million votes, they don't need to take risks with small things like that, because 14 million votes includes pretty much all the affluent properties "Middle England" votes they are going to get. All they need to get their vote again is to keep delivering big property and finance profits, much bigger than any feasible tax cuts.
«This is the danger for Labour and Starmer's leadership. With a shadow chancellor firmly in hock to Treasury orthodoxy, and therefore City interests, Rachel Reeves's pathetic marginal cut in VAT on fuel is weaker than anything Truss is presently offering.»
As our blogger here keeps reminding us, politics is about representing and delivering class interests, and the problem that New Labour has is how to represent the material interests of their core target constituency of affluent propertied "Middle England" voters to make them switch from the Conservatives, and there are only two ways:
* The Conservatives fail to deliver on the class interests of "Middle England" voters and New Labour wins by default, like in 1997, regardless of any empty rhetoric about other topics.
* New Labour offers a better deal than the Conservatives for the class interests of their core "Middle England" voters, something like a big tax cut on property owners, especially those paying a mortgage, to be funded with extra taxes on "unproductive" workers and on renters. But they cannot go public with any such proposal that much ahead of elections because then the Conservatives would copy that too.
The second problem exists because both New Labour and Conservatives have the same core constituency, so they can easily adopt each other's proposals. If two parties instead represent constituencies with different class interests they could not as easily adopt each other's proposals.
«If delivery is her watch word, then Labour must have a better plan to counter it. Yes, that means nationalising energy and imposing price controls»
Would this significantly boost the class interests of "Middle England" voters? Given how much profit they are making on their property and shares portfolios, way ahead of "inflation" (even the 12% RPI), I doubt they would care much: the higher energy bills and costs of living of "Middle England" voters are being paid more than fully by upgraders and renters in increased property prices and rents.
«the higher energy bills and costs of living of "Middle England" voters are being paid more than fully by upgraders and renters in increased property prices and rents.»
As to "inflation" and property there is another interesting detail: the BoE etc. are planning a period of high CPI but they think they will let it rip only during 2022 and 2023, with a return to low-ish inflation in 2024, as "Mainly Macro" reports:
https://mainlymacro.blogspot.com/2022/08/why-does-bank-of-england-appear-to-be.html
“22Q3 Q4
9.9 13.1
23Q1 Q2 Q3 Q4
12.8 11.9 10.5 6.4
24Q1 Q2 Q3 Q4
5.0 2.5 1.9 1.4
25Q1 Q2 Q3
1.1 0.9 0.8”
The BoE/Treasury policy has the clear goal to cut relative labour costs by around 25-35% (in RPI terms) by "internal devaluation" while protecting and boosting asset valuations, and if official "CPI" returns to 2.5% in time for elections in Q2-Q3 2024, in conjuction with a couple of years of ballooning housing profits, it will be a huge boost to Conservative prospects.
That housing profits will balloon is clear enough: everybody capable of putting together a deposit by selling any other investments they have, or remortgaging, or borrowing from parents or relatives, is desperate to buy property and in particularly BTL property, as they are sure that the only way to protect their living standards from inflation and even profit from inflation is to buy property and charge rapidly rising rents, and this is of course a self-fulfilling prophecy.
Note: perhaps most of the affluent propertied "Middle England" readers and commenters of this blog don't know as it does not affect them, but the standard rent terms are that every year rent increases by RPI plus 3%, or by at least 3%. Which other asset guarantees returns of 3% above inflation? Also, the higher RPI is, the faster the real value of the mortgage shrinks, and at the same time as the real value of the rent grows!
«perhaps most of the affluent propertied "Middle England" readers and commenters of this blog don't know as it does not affect them, but the standard rent terms are that every year rent increases by RPI plus 3%, or by at least 3%.»
BTW this also applies to mobile phone contracts, and yet I have not seen any mention, never mind criticism, of these hyper-inflationary contract terms *anywhere*.
Try to imagine instead the cacophony of denunciations if NHS cleaning staff or Amazon delivery drivers had a contract giving them pay rises of 3% above RPI every year; that would be labelled as "unaffordable" and "inflationary".
But but but: for the upper-middle class readers of this blog and much of the media higher housing rents and prices are increases in their incomes, so they are not "inflation", but higher wages are increases in their costs (higher taxes for the NHS, or higher delivery fees for Amazon packages), so they are "inflation".
It is so much more important then to focus not on policies driven by class interests, but on truly critical issues such as scandalous wallpaper prices and drinking of beers at "work" meetings.
Two things happened since this piece was posted:
1) Labour "sources" made clear the party *is* planning a major policy announcement on cost of living before the new Tory leader takes over. What this actually amounts to remains to be seen, but yes they do seem to have belatedly realised that a 5% VAT reduction won't cut it;
2) Truss said there won't be any "handouts" if she becomes PM and the proposed tax cuts will do the trick. After initial claims on her behalf that she was "misinterpreted" she seems to have doubled down on this tonight.
Maybe she isn't going to "stomp" even Starmer's Labour after all?
«she isn't going to "stomp" even Starmer's Labour after all?»
Note that she would inherit an 80 seat majority, so all she need to do is to keep a part of that, the larger the better. In practice there are three main ways where an opposition party can win, looking at marginals:
#1 The Conservatives lose a large chunk of their voters.
#2 A chunk of Conservative voters switch to the opposition.
#3 The opposition increase their voters from abstainers.
The Conservatives mainly represent the interests of upper-middle and upper class property rentiers (even if they cloak that with dissembling about conservative or liberal values), #1 and #2 can happen only if they fail to do so, and property prices or rents fail to rise.
New Labour's official strategy is #2, so they can justify pandering to tory voters with tory policies, but it is pretty transparent that they actually are counting on a mix of #1 and the reverse of #3, like in the 1997-2005 period.
Now let's look at bills increases in this context:
* For Labour (not New Labour) voters it is quite bad, because it comes at the same time as a bigger increase in housing costs, but this has no effect on the Conservative majority, because they already don't vote Conservative, so they can be ignored (unless they are abstainers and start voting New Labour, which is not what New Labour wants).
* For current Conservative voters it is also bad, but bills (and food) are much smaller percentage of their living expenses than for Labour voters, and anyhow the Conservatives are delivering big property price and rent increases that far outstrip the bills increases. Why should Conservative voting stop voting for them, or even switch to New Labour? Some may have a strop regardless and as usual switch to the LibDems, and this may gain New Labour a handful of marginals.
New Labour may extraordinarily want to help a bit (instead of pushing them into abstention) Labour voters so that they continue to vote New Labour for the time being, even if they are "trots", but to fund that would mean hitting directly or indirectly the Conservative and LibDem voters who are their main target constituency.
Besides if there is a physical scarcity of fuel and electricity because of government enforced boycotting of russian suppliers, New Labour cannot do more about it than the Conservatives can.
My guess is that the european governments are just holding their breath hoping that there is a "colour revolution" or a "democratic coup" against Putin before the start of winter and before existing european gas reserves run out, and then the boycott of russian suppliers will evaporate (if regime change is achieved it will be loudly presented as a reward for the new "aligned" regime, else it will be quiet and done because of necessity).
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