Comment: Balls is distancing Labour from the public sector, not the unions

Sunday, 15 January 2012 11:29 AM

Balls and Miliband have binned a strategic position on public spending that didn't add up, but what do they do now?

By Stephen Barber Follow @StephenBarberUK

Ed Balls is accused of cynicism for an about turn on public spending but the shadow chancellor might just have saved Labour from being branded the party of the public sector.

After the end of a week in which Labour leader Ed Miliband attempted another re-launch, his shadow chancellor shamelessly trashed the weak policy position that had sustained it for eighteen months. In office, Labour will not reverse the coalition's spending cuts – and that includes public sector pay which remains all but frozen. The trades unions were understandably fuming, especially given Miliband's perceived sympathies.

But it is not primarily from the unions that Labour has now distanced itself.

After all, orchestrating a family feud has always been a straightforward exercise. Ever since he beat his brother David to the Labour leadership by attracting union support, Ed Miliband has been very sensitive about being viewed as their puppet. Last year, he even pulled out of the Durham Miners' Gala having previously pledged to be the first Labour leader to speak at the rally since Neil Kinnock himself. But much more importantly, Labour has abandoned its near out-and-out support for public servants whose recent strikes were tacitly support by the party leadership and who were joined by leader Ed on the so-called 'March for the Alternative'.

When it comes to public spending cuts Labour has had some success in allying itself with those who are implacably opposed when its own alternative has been nothing of the kind. In the broad sweep of economics the plans of the Gordon Brown administration and the Lib-Con coalition are broadly consistent. Balls himself was central to shaping those plans, which included a Fiscal Responsibility Act in 2009 enshrining in law that the deficit be halved in four years (and by extension irradiated in eight, which takes us to 2017). Chancellor George Osborne's plan is to pay off the deficit (not the debt) in full by the end of this parliament in 2015. So 'too far and too fast' is a matter of just two years. And with the automatic stabilisers balancing sluggish growth, they are likely to end up in about the same place. This is hardly a matter of great ideological difference but it has offered some rhetorical space.

This all goes to the heart of the party's core strategy which now appears to have been abandoned. The new Labour guard has relished the freedom of opposition. It has distanced itself from the Blair / Brown administration in which they almost all served and embraced wholeheartedly an easy populism. The dawning problem is that this has not impressed the public, with recent polling suggesting a drop in Miliband's personal support, trailing that of his party.

The dilemma facing the party ahead of this re-positioning was not actually whether it should allow itself to be seen marching alongside public sector trade unions, but rather whether it should ally itself with the interests of nurses, teachers and other public servants, many of whom are vociferous in their disagreements with an austerity-focussed coalition government. Balls has now signalled an abandoning of the direct interests of this key voter group. He has avoided nailing Labour's colours to the public sector's mast and sidestepped the risk of committing itself to a potentially outdated position at the election which prevents it from articulating a genuine and positive alternative.

Labour is no longer committed to spending tax revenue on making public servants better off. This will cause grumbles among the six million or so Britons employed in the public sector (a disproportionate number of whom are already Labour voters) but will at least neutralise dissent from the vast majority of taxpayers whose jobs and pensions look much less secure.

But this is far from the end of the matter. Having distanced itself from a potentially unpopular relationship with the ever more confrontational trades unions and binned a strategic position on public spending that didn't add up, Labour now has nothing distinctive to say. By aggravating the public sector, it has shown it can take two steps back. Miliband and Balls now need to display the leadership which will enable Labour to take one step forward. Being leader of the opposition is an unenviable job. 

Dr Stephen Barber is senior lecturer in public policy at London South Bank University. His new book Tragedy of Riches has just been published.

The opinions in politics.co.uk's Comment and Analysis section are those of the author and are no reflection of the views of the website or its owners.

Tags:
• labour
,
• spending cuts