It is far too readily assumed that a Tory victory at the next election is a foregone conclusion. In fact, if the LibDems perform as well as they did at the 2005 election, then Cameron will need an 11-point lead over Labour in the popular vote just to get an overall Commons majority of 2. Maybe the LibDems will do less well, but even if Clegg’s vote halved, Cameron would still need to beat Labour by 7 points to get a bare majority. That’s because the Tories still today hold only 197 seats, less even than Michael Foot had after the massive defeat of 1983, a very long way short of the 324 seats they would need to have an overall majority. Moreover, as is widely recognised, there’s no great enthusiasm for either Cameron or the Tories: their 28% vote in the Euro elections was well short of the 36% they secured even at the peak of Tony Blair’s power a decade ago. The problem is entirely with Labour which is why, theoretically at least, the situation is not irreparable. But it will require a fundamental re-directioning of the party. No mere tweaking of policies (or lack of policies) will do.
It’s not too difficult to see why New Labour is so unpopular or why a majority of the electorate now believe that the Government no longer cares about their concerns. Recent IFS data shows that since the last election in 2005 most people’s incomes have stagnated, and the poorest fifth in the population have actually seen their living standards decline – whilst at the same time they watch the celebration of a culture of avarice of the very rich few growing by leaps and bounds from which they are totally excluded. Worse, they are now suffering pay cuts (or being asked to work for free, otherwise lose their jobs), being forced to accept short-time working, and taking the full brunt of closures and job losses. Insecurity is rife, even among those still holding on to their jobs for the moment, with fear that they could lose their homes too as negative equity spreads.
What would a fundamental re-directioning look like which might turn this round, or at least put Labour back into contention? It would require aggressive intervention in the market to save manufacturing jobs or to create new ones, as the French, German and US Governments have done. That could be financed by switching some of the £750bn funding currently put at the disposal of the banks into supporting and extending employment in industry and commerce.
The Government should also rapidly boost the real economy by forcing the banks, particularly but not only the banks in majority public ownership, to raise their lending sharply to businesses and homeowners as they pledged to do as a condition of bailing-out, but which they have reneged on – such lending is now completely flat.
Fear of loss of home should be countered both by enabling those who can no longer afford their mortgages to switch temporarily into tenancies and by launching a huge building programme to deliver 100,000 social housing units a year, to make a major dent in the 1.6 million households-long Council waiting lists and generate a very big increase in construction and related jobs.
As a clean break from past neoliberal commitments to deregulation and privatisation of public services, essential services would be protected from the coming cutbacks to reduce the deficit in the public finances, where instead the brunt would be borne by axeing the colossally expensive but functionally dubious Trident replacement, ID cards and failing Government IT database schemes. As an important signal of the same change of semtiment, the part-privatisation element in the Royal Mail Bill should be dropped and an alternative model adopted within the public sector for the modernisation of the service that is needed.
Lastly, public anger at the renewed greed of the very bankers who caused the crisis in the first place could be mobilised to powerful effect by squeezing the bonus culture, tackling the tax havens head-on, and taxing those with incomes over £150,000 a year at 50% and over £250,000 a year at 60%, and redirecting the proceeds in large measure towards pensioners and others on the lowest incomes.
A programme of this kind would I believe persuade the Labour-sympathetic electorate that at last the Government was listening to their concerns and determined to fight for their interests. Given the high hurdle that Cameron still has to reach to win, it could well be enough to turn the election round. Certainly there’s no other way to give Labour a real chance.