‘It’s the economy wot won it’

Mick Moran - Member of SPERI's International Advisory Board & Professor Emeritus at Manchester Business School

In truth, voters did not need to be ‘manipulated’ into scepticism about Labour.  Each landmark election over the last forty years has been fought – and lost – on the record of economic competence.  The Conservative breakthrough of 1979 was possible because the three-day week and all it symbolised destroyed confidence in Labour as an economic manager and, more broadly, in social democracy as a form of economic government.  It took eighteen years, and the Conservative cataclysm of ‘Black Wednesday’ in 1992, for Labour once again to win the competence argument.  And, in turn, it took the Conservatives until 2010 – and the catastrophe of the banking crisis and, above all, the fact that it occurred on Labour’s watch – to recover their reputation after the 1992 disaster.

In the light of this long experience we can see that last Thursday’s election was not so much a novel event as a kind of re-run of May 2010.  On both occasions Labour failed to convince voters of its economic competence, though naturally the failure this time was made peculiarly painful because of the Scottish disaster.  It was always going to be difficult for Labour in 2015 to make a case for its competence: we are less than eight years on from the great financial crisis, and we know that earlier reputation-damaging episodes, like ‘Black Wednesday’, took nigh on two decades to fade.

Still, parties do not have to just sit round and wait for memories to fade and voters to die.  They can make strategic choices in the wake of disaster, for better or worse.  Labour’s strategic choices after 2010 were manifestly for the worse.  It opted for a new leadership generation that had made its careers in the Blair years and under Brown’s patronage – and this generation was thus irredeemably tainted by association with the many grave economic problems that in the end overwhelmed New Labour.  The problem had nothing to do with Mr Miliband’s inability to eat a bacon sandwich elegantly, nor with the failure to choose his brother as party leader; indeed, the latter, as the former ‘Head Boy of the Blair Academy’, is arguably even more tainted by his association with New Labour’s failures.  Labour was doomed from the moment ‘the two Eds’ assumed responsibility for economic policy, not because of what they said, or how they said it, but because of who they were: children of New Labour.  This is how it was ‘the economy wot won it’ for the Conservatives – and lost it for Labour.

There is an obvious lesson here as Labour picks up the pieces over the next few months.  A necessary, though not a sufficient, condition for recovering its reputation for competence is a decisive break with the Blair-Brown generation.  Mr Miliband and Mr Balls must be thanked for their services and told to spend time with their (no doubt lucrative) post-political careers.  Any leadership contender associated with the past – Andy Burnham, Yvette Cooper – must be decisively rejected.  Skipping a generation obviously entails big risks: Labour cannot be certain that an untried leader, indeed an untried leadership cohort, will cope with the brutalities of democratic political competition.  But the alternatives for Labour are even less palatable – either repeating the failed strategies of the ‘Eds’ era or just sitting round in the hope that, in due time, the Conservatives suffer another ‘Black Wednesday’.