Labour policies are popular, but party must still win back confidence on economy

Labour policies are popular and Corbyn is no hindrance to that, but the party must still win back public confidence on the economy if it is to mount serious opposition, let alone return to government.

With the local elections coming up, the Labour Party has made use of the Easter break to make a series of policy announcements in an effort to take back control over its image. Under Jeremy Corbyn's leadership, a hostile relationship with the media has made it hard for the party to put across what it stands for to the public.

The way Corbyn has chosen to try and cut through to the public has been to roll out a few major promises. The party has pledged to deliver a £10 minimum wage, universal free school meals and raise standards for the £200 billion the government, central and local, spends on commissioning and procurement in the private sector (Eaton, 2017; Ashmore, 2017).

Yet, if Corbyn is going to breakthrough and recover public confidence in the Labour Party, damaged long before he became leader, he has one main task: he must win the argument on the economy. His problem is the party remain divided on whether that means regaining trust as the credible stewards of the neoliberal economy, or to change minds and develop something new.

The policies Labour proposed have been, on the whole, welcomed by the Centre-Left press (Eaton, 2017; Slawson, 2017; Lister, 2017) and a ComRes poll showed that Labour's Easter announcements were very popular - even when people knew they were Corbyn's policies (Cowburn, 2017). All around, two weeks used well by the party.

However, the poll also highlighted something important. When asked how they regarded the longer standing Labour plans for a National Investment Bank, funded to the tune of £350 billion by the treasury, the response was much more unsure. Herein lies a problem that speaks to the absolute crux of the dispute between the factions within the Labour Party.

The austerity narrative, sown deeply into the public consciousness by the Conservatives after they came to power in 2010, has firmly established the idea that money is short. Further, the Tories pushed hard to make a link between the shortage and Labour's spending in government.

That narrative created a presentation problem for Labour. Whenever Labour pitches a policy that involves spending, they play right into a Right-wing narrative of frivolous profligate - as seen by Theresa May responding to Corbyn's policy pitches with her standard line that Labour will 'bankrupt Britain' (Eaton, 2017).

To this point, Labour hasn't helped itself. In the past five years the party has veered between doubling down on meeting Tory policy pledges, point for point and pound for pound even when it comes to cuts, to promising big uncosted spending - or criticising the Tories for underspending without a costed alternative.

For instance, while the £10 minimum wage will only be a pound more what the Tories will be offering come 2020, there was no breakdown as to how the increased costs would be handled. There will be more pressure on the community & voluntary sector, on social care that is already stretched and on small businesses and low pay employers, to name but a few.

Will there be increased spending to further fund the social sector to cover the costs? Will there be tax cuts for business to protect low-paid work? Where will the money be found to fund these? From increased taxes on the rich that the party has been criticised for mentioning in connection with a whole range of spending proposals?

These questions need to be asked, because at present the collective public consciousness still appears to accept the core of the austerity narrative on economics: that government money is limited, that a government siphons from society when it spends, and that borrowing is a reckless alternative.

And yet, the argument for austerity is weakening. Every day some new story emerges that exposes a little more of its cruel impact - and that impact is starting to be felt by the middle class and not just the poorest. Ahead of the Labour Party is a choice and its different factions need to unite behind one or the other.

To remain hitched to neoliberalism as well-meaning and trusted stewards or to fight for a new narrative that isn't shaped by the Right-wing press. Either way, it is a fight it must win - because while the ComRes poll from the weekend suggests that Corbyn is not the problem he has been cast as, Labour still sit 21 points behind the Conservatives (The Independent, 2017).

There are people searching fora working opposition and, right now, Labour is the second largest party. A progressive movement cannot function without them. Labour doesn't have to do it alone, but as the loudest voice it must start making itself heard - and start setting the tone of economic debate.

Looking ahead to the local council elections on 5th May - what do councils do and who stands to lose or gain?

Manchester Town Hall, where the one third of council seats are up for election. Photograph: Manchester Town Hall by Mark Andrew (License) (Cropped)

The return of Members of Parliament to work after the Easter Recess, is a good time to take a look at what is ahead. For MPs, the impact of their efforts over the next month will be for the benefit of others in their party besides themselves.

On the 5th May there will be elections. Amongst them are the Scottish, Welsh, Northern Irish and London devolved assembly elections. But perhaps most pressing for the situation at Westminster will be the midterm local council elections.

Local government in the UK, in the form of elected councils and council workers in their employ, represents a confusingly multi-tiered system that provides or commissions local services (LGA, 2011) - some of which represent mandatory duties while others are discretionary and the council can charge not-for-profit fees for them.

The services councils provide include those for children, like schools; for adults with needs; social housing and housing benefit; scrutiny of local health services; museums, libraries, sports and recreation facilities; care for local roads and co-ordination of public transport; care for the local environment and management of waste collection and disposal or recycling; planning; collection of local taxes like business rates and council taxes; administration of elections; and the keeping of registers of births, deaths and marriages.

After six years of austerity, with as much as 40% of funding cut from their budgets, and likely cuts more to come, there has been substantial discontent on councils, and in party council associations, with the government (Sparrow, 2015) - not least in the Conservative association. That situation has not been eased by the transfer of further burdens not being matched by the transfer of sufficient means of funding, and central government decisions like the substantial cut to business rates included in Budget 2016 (BBC, 2016).

Governments usually struggle during midterms - especially after spending a long time in government. But after years of austerity, with frontline services slashed even, to his great discontent, in the Prime Minister's own council area (ITV, 2015), the Conservatives must be expecting considerable losses.

So for the Conservatives, this election is fairly simple. Lose as little as they can and hope that their opponents, particularly Labour, fall well short of their own targets - from the Conservative view, embarrassingly enough that it becomes an interesting news story.

What the Conservatives do not want is Jeremy Corbyn's Labour to show itself able to beat the Tories in the popular polls. Labour will almost certainly be under pressure to, at least, achieve results comparable with those of Ed Miliband from 2012, which means gaining a not insignificant number of council seats (Labour List, 2016).

However, possibly of greater importance from the view of the MPs returning to work today, is the national vote share. What MPs at Westminster will want to know is whether a Corbyn-led Labour can come first in the popular vote - because that would establish the party as a realistic option come 2020.

Labour's efforts at achieving gains in vote share and seats will be hampered by the array of parties scrapping with each other, as well as with the Conservatives, to make gains (Ford, 2016). In Scotland, the seemingly unstoppable SNP momentum will make life difficult for Labour, while in Wales Plaid Cymru tend to be much stronger when it is Welsh Assembly election time than in the national polls.

In England, UKIP will likely continue to plague Labour - as they have yet to go away completely despite the failure of their big push in May 2015 and the stats saying their vote share has fallen by a swing of around 8% nationally since then (Britain Elects, 2016), not least because of the European Union Referendum scheduled for June.

There may also be some pressure applied to Labour by the Liberal Democrats. It's one thing for the party to talk up its #LibDemFightback, but another for, over the same period from the May 2015 election, the party to see a positive swing of around 4% (Britain Elects, 2016{2}) - putting it well ahead of the other parties in England in terms of local momentum.

Not least do the Liberal Democrats have a reputation for campaigning at the local level, based on a committed and engaged approach to local government and community-based politics that is even acknowledged by their opponents (BBC, 2015; Labour List, 2016). If momentum swings back their way, they may have a positive showing that gives tangible substance to their fightback.

From Labour's perspective, they may help their own cause by establishing these things as limiting factors (Ford, 2016), allowing them to set their own, much more modest, targets. Yet they are unlikely to have that liberty and will probably be under pressure to make real terms gains.

For MPs at Westminster, the next few weeks and the bills that they will debate could have a substantive impact on the council elections. Policy at the national level will be seen through the lens of its impact on local government - at least a temporary boon for local government that can often feel sidelined from political debate and policy decisions that affect them being made centrally at Westminster.

It should be kept in mind, however, that midterm election results can only tell you so much. Local government elections from 2011 through 2014 all saw Labour under Ed Miliband top the polls - though sometimes only barely as the UKIP spectre ate away at the support of both the Conservatives and Labour.

From a country-wide perspective, what midterm local elections can be is a substantive base with which to demonstrate momentum, a fightback, and upon which to build a platform. For progressives from all parties, under a Conservative government and with council services under increasing strain, that will likely be the main hope with 2020 firmly in mind.

Cameron & Osborne reached Easter Recess having survived another tough short term battle, but longer term dangers linger unaddressed from failure to invest

Approach of UK Conservative and Canada Liberal governments to their respective 2016 budgets were worlds apart. Photograph: Parliament of Canada in Ottawa from Pixabay (License) (Cropped)

As Parliament went into its Easter Recess on Friday, it appeared that the Cameron Government had weathered the political storm caused by the budget. Controversies had weakened the government's position, but had not toppled it. Yet Prime Minister Cameron and Chancellor Osborne have only won the week, as tends to be their criticised focus (Kuenssberg, 2016).

While they manage the short term, there are larger, longer term, dangers they're not addressing - not least of which is the long term danger of failing to invest. Cameron and Osborne like to talk of not leaving our debts to the next generation, yet there are debts other than fiscal to leave to the next generation. One deficit they are sure to leave behind is infrastructural (Yalnizyan, 2016).

It is interesting how different priorities can be on either side of the Atlantic. In Canada, their new Prime Minister Justin Trudeau unveiled his first budget. As promised during the election, it involved deliberately running deficits in order to fund public investment in rebuilding Canada and setting it up for the future (CBC News, 2015).

John McDonnell's focus as Shadow Chancellor has been to try and undermine the perception of the Conservatives as the economically competent party, that can be trusted with the national finances. In his response to the budget, he paid special attention to the Conservative habit of over-promising and under-delivering, especially when it comes to public investment (McDonnell & O'Connor, 2016).

McDonnell has expressed particular and repeated concern that the Conservatives keep sending out press releases launching projects and yet, as argues McDonnell, don't provide or secure adequate funding. Meanwhile, against the recommendations of the OECD and the IMF, Osborne has continued to let investment consistently fall as he pursues a budget surplus (McDonnell, 2016).

What is interesting this is not a trend that Osborne began, but is rather just fitting into. Public investment in the UK has been falling steadily for the better part of fifty years (Thornsby, 2016). At the last election, both Labour and the Lib Dems wanted to put aside money for public investment, exempt from the efforts to balance the budget, but their efforts were timid due to lingering doubts about ignoring the debt or deficit in the short term to pursue a longer view.

While these doubts are being harboured in the UK, in Canada the situation couldn't be more different. At the last election the Conservatives were defeated by the Liberals coming from third place into a sweeping majority while promising to run deficits in order to fund economy growing public investment (CBC News, 2015).

Now there were certainly other aspects of the Liberal approach that helped them over the finishing line - not the least the fact that none of the parties leaders were Stephen Harper. The Trudeau campaign was open, relaxed and friendly with the public and the offer of limited-deficit funded public investment in infrastructure cannot be discounted as a factor (The National, 2016).

Yet it would seem to have only been possible to propose those deficits because the Liberals did not have the weight of a reputation for fiscal irresponsibility on their shoulders. Pre-election polls suggested that the public not only trusted the Liberals the most on the economy, but also believed they would be the most likely to have a positive impact on the economy (CTV News, 2015) - and aligned more with their promise to invest in infrastructure rather than simply cut taxes and balance the books.

While tackling the Conservative reputation, Shadow Chancellor McDonnell has also been trying to rebuild one for Labour. Bringing on a team of advisors, he has taken them on tour where, speaking across the country, they have explained how negative austerity has been and what might be possible in its place.

No one has typified this more than economist Mariana Mazzucato. In her own work, and in her work advising Labour, Mazzucato has consistently argued that the private sector is too risk averse and too short term in its thinking to handle the kind of positive long term investment that the public sector excels at (Mazzucato, 2013{2}).

In fact, if anything, she suggests that the private sector leeches off of public investment - privatising the rewards (Mazzucato, 2013). For those wedded to the fear of progressives forever being labelled as high spending, controlling statists, Mazzucato's call if not for a bigger state, but for a much easier to stomach smarter state (Mazzucato, 2014). A state that promotes growth by making smart investments where the private sector only hinders or won't take the risk; a state that promotes justice by seeing more of the reward for public efforts returned to the public.

The second, and maybe harder, part that follows the building of a reputation, is maintaining it. In Canada, the Liberals have been smart, deliberately managing expectations (Evans, 2016). While every $1 of infrastructure spending can lead to much bigger revenue returns - what Willie Rennie, leader of the Scottish Liberal Democrats, refers to as a virtuous cycle of investment (Taylor, 2016; Gray, 2016) -  they have nonetheless managed their forecasts down, leaving themselves plenty of headroom for showing the positive impact of their policies.

Public investment is important. In infrastructure, in education, in housing, in healthcare. All of these materially benefit everyone, even tackle inequality. Yet despite the Chancellor's obvious pleasure at announcing investment projects, there has been little to back it up (Pidd, 2015; Boffey, 2015) - with announcements seemingly serving as publicity to encourage private investment instead of the making of public commitments.

Sooner or later, the public will have to face the reality of the Conservative failure to invest - in education; in affordable housing; in technology, science and research. Long term public investment will be missed when the reality of selfish, short term, private investment is grasped. In the meantime, progressives have to do what they can, building the credibility of the argument for a smarter state that invests in the common good.