• Eastleigh Leaves Labour with Lessons to Learn

    The Eastleigh by-election will attract attention for many reasons – a significant Lib Dem win in a contest triggered by the criminal conviction of the sitting Lib Dem MP, the undeniable emergence of UKIP as a mainstream player, and a body-blow to David Cameron and the coalition that may determine the result of the next election.

    Little attention will be paid to the fact that Labour – admittedly in unfavourable territory – came in a poor fourth. It was, of course, only a by-election, with all the attendant and specific peculiarities of such a contest, but it is at least troubling that – given the unpopularity of the coalition partners and the single-issue profile of UKIP – more voters did not turn to Labour as their preferred means of expressing their discontent.

    Not to worry, many will say. The national opinion polls tell a different story. Labour is tracking well and Ed Miliband is playing a canny game. We need not concern ourselves too much about a single by-election.

    Yet real concerns remain. Ed Miliband has certainly done well to move Labour into a position where it can credibly attack the coalition without being reminded that his immediate predecessors were equally open to the same criticisms. And there are limits – strenuously emphasised by old New Labour veterans – to which he can, assuming he wants to, entirely disown his inheritance.

    But the Eastleigh by-election points up just how far Labour still is from capturing that middle ground that is increasingly disenchanted with Osborne’s manifest failures and Cameron’s vacillations but which retains fresh memories of the failures and betrayals they have had to endure at the hands of New Labour as well as the Tories.

    Even Labour’s new leadership has not, I believe, fully understood the mood swing that is now under way before our very eyes. The perennially unsolved problems, the specious remedies, the constantly misplaced optimism, the cosy clubbiness of our political leaders as they pretend and posture have now been around for a very long time. They date back at least to the late 1970s when the post-war consensus finally collapsed and a brave new world of “free” markets, monetarism, globalisation, finding our salvation in financial services, and riding shotgun to the Americans as the world’s policeman was ushered in.

    Faith in that toxic mix has taken a long time to dissolve, helped no doubt by the new lease of life it gained from New Labour. The death knell, though was sounded by the global financial crisis. While many of us expected that voters would immediately realise that the game was up and that their old certainties had crumbled, it has actually taken the slow unfolding of real consequences to drive home the lessons.

    Let us review what we – and a growing sector of the public – now know and understand as the true seriousness of our plight becomes undeniable. We now know that markets are not infallible, that they misbehave and are exploited by the powerful to the disadvantage of the rest of us unless they are properly regulated.

    We know that governments have an unavoidable responsibility to help us recover from recession and to stimulate economic activity and that austerity is the worst recipe for doing so, condemning us as it does to continued economic decline. We know that the monetarist obsession with inflation misses the point by ignoring our real problem which is an endemic and deep-seated loss of competitiveness in international markets.

    We are beginning to understand that our carelessness with our manufacturing base and our misplaced faith in financial services has cost us dearly, since there is no substitute for manufacturing as the most important source of innovation, the most substantial creator of new jobs, the most effective stimulus to improved productivity, and the provider of the quickest return on investment.

    We realise that our engagement with the global (and European) economy can pay off only if we get our domestic economy in good shape; otherwise, it is a recipe – as it has proved – for running massive trade deficits, having to borrow excessively, and – as a consequence – losing control over our own destiny.

    These are massive changes in the perceptions of an election-deciding sector of the electorate, and represent a point-by-point rejection of virtually every element in the agenda accepted for most of the past thirty years; yet we (and the political class more generally) persist in behaving as though the voters are so enchanted by their experience that they have some settled allegiance to an established orthodoxy from which it would be suicide to depart. Those perceptions of the mistakes that have been made and of the changes that are needed will only strengthen; Labour’s task is to help them to crystallise and to become embedded, and to offer themselves as the means by which we can start afresh.

    The electorate is crying out for release from the shackles of the orthodoxy of the past thirty years. They will turn, if they have to, to the single-issue and limited negativity of UKIP, but they would respond more positively to Labour if they could show that they understand that the last thirty years have been years of failure and that we can do better – by restoring democracy, by facing our problems realistically and by re-establishing government as the essential agency by which that is to be done. The political rewards of adopting that new agenda could be immense.

    Eastleigh may have been just a by-election; but it should have been a chance taken to set out that new agenda and to make common cause with the impatience and ambitions of a confused and disappointed people. Ed Miliband has made a good and sensible start; now is the time for courage.

    Bryan Gould

    2 March 2013

    Bryan Gould’s new book Myths, Politicians and Money will be published by Palgrave Macmillan later this year.