August 26, 2016

Labour risks being downgraded to junk status

Labour risks being downgraded to junk status

Labour must reconnect with voters, or risk being relegated to minority party status, argues John Mills.

The Tories face an opposition in disarray. At the moment it is not easy to imagine the Labour Party winning the General Election in 2020. But the real tragedy is that we ought to be able to win. Labour’s message of aspiration should be able to appeal to a very large number of voters across the country.

I have been involved in the Labour Party for over 50 years, and I know that the party has a strong message to sell to the public.

In the past we have been able to appeal not only to people in the North of England, Scotland and Wales through our ideals of equality and fairness, but also to many centrist voters in the rest of England who appreciate our left-of-centre values when they are blended with sensible economic policies that will help the country grow faster and more fairly.

The problem is that in recent years we have focused too much, albeit successfully, on appealing to metropolitan voters in cities like London and Manchester. This has disenfranchised a large number of other Labour supporters, and, as a result, we have failed to present a credible alternative to the Conservative government.

Many individuals who voted for the party in the past have since migrated to the Conservatives, UKIP, Greens, or the SNP. Or they are now not voting at all.

In the face of this challenge, it is now more critical than ever that Labour adopts a coherent set of policies that resonate with the electorate, to help it reconnect before the 2020 General Election.

First, the party must accept the result of the EU Referendum. During the course of the campaign the party made the mistake of being much too Europhile. Of the 9.3 million people who voted Labour at the 2015 general election, a poll by Lord Ashcroft indicates that 37 percent – about 3.4 million – of these Labour supporters voted Leave in the referendum.

If this same number desert Labour at the next General Election, most MPs with majorities of less than 5,000 would lose their seats. This would mean the loss of around 100 MPs in 2020.

But rather than do this, a number of members of the Labour Party are now attempting – or saying they will attempt – to block the invocation of Article 50. Or they are calling for the referendum to be run again. There is no democratic mandate for this rerun, and it will only gift more votes to UKIP who are already nipping at our heels in the north of England.

Secondly, Labour has failed to lay out to the public an economic alternative to the Tories and their unpopular eight years of austerity. In spite of Theresa May’s attempt to claim the term ‘industrial policy’ for her own, it doesn’t ring true for many people in the country who know that the Conservatives were the key cheerleaders for the hollowing out of our industrial base.

Labour must now argue for a transformative industrial strategy, based on radical changes to our monetary and exchange rate policies, to make sure that globalization works for the many and not the few. Investing in and reviving British manufacturing will create good-quality high-paying jobs for working-class people in this country, and encourage them back to voting Labour. It will also rebalance the economy away from financial services and drive higher levels of growth, which is equally appealing to middle-income voters in the English shires.

If we get these two things right, Labour can win again. We have had hard times and we have bounced back before. Now we need to do the same thing again.

2.48 avg. rating (50% score) - 42 votes
John Mills
John Mills is an economist, entrepreneur and political commentator. He is the Founder and Chairman of JML, the global import-export consumer goods company which operates out of 68 countries. John is also the Chairman of Labour Leave and Labour Future and the Chairman of the Pound Campaign.
  • Nockian

    No article ? Maybe it’s spread to comment central ?

    Central banks don’t work any better than any other kind of soviet style producer. They produce too many tractors when we need more ploughs. This is because banking isn’t independent, it isn’t laissez faire capitalism that is being practised, but the soviet style economics of central planning. It is not, per se, the fault of the central banks, anymore than it was the fault of the Russian tractor factories for under/ over producing as a result of state diktat. Unfortunately we have a mixed economy, which is 50% socialistic and has been expanding for several decades-most of us now give over 60% of our earnings to government directly (it’s probably a bit more depending on inflation and inflexible tax bands).

    The answer is to get the state out of commerce, then the central banks will either survive or collapse within a laissez faire banking system, but first we must begin to accept the truth, that we cannot continue to sustain such a gargantuan welfare system and its associated government. If we want to produce more, we need to be taxed less, we must save not spend.

  • ratcatcher11

    If everyone saved and did not spend there would be a massive worldwide slump, so it is obvious there has to be spending. Making things for sale is thus important, services alone cannot sustain an economy. One of the biggest problems is Keynsian economics that are basically tax, print and spend socialist policies. We do not need the government to build a railway we need a private company to build the railway which will compete with air travel fairly, not by taxing air travel to make it it less profitable. Thus the governments air taxes should be scrapped and private companies encouraged to re open rail lines closed by Beeching. This is the development we need not government spending 90 billion of money on an HS2 line built from somewhere to nowhere and never stops to pick up passengers.

  • Debs

    Expansion of economies cannot go on forever no matter what so called monetary policy is. You dont need to be an economics expert to realise it.

    All I know is governments and banks seem to be constantly coming up with schemes to leave we the lowly tax payer with less of our money.Forget about the trumpeted tax cuts ,everything else is going up accordingly except real wages of course. Dont even mention the Green scam or the cheap labour scam.

    Bail ins and cashless society are two more scams I have seen trailed in various media outlets over the past few years. Gradually our hard earned money is being prised away from us to fritter away on who knows what.

    They wonder why Trump got elected.

  • Nockian

    The market will raise rates eventually, regardless of wether the central bank wishes it or not. The problem is that we have all become mesmerised at central bank control, when, in reality, at this stage they have little at all. They cannot raise rates to normal, because, firstly, we don’t know what normal looks like (it could already be normal) and secondly any increases will create an avalanche effect-let’s face it, no one but the wealthiest wants to bring down countries governments through a collapse in public spending leading to actual anarchy on our streets.

    The bogey man of fractional reserve is a myth that has permeated libertarian consciousness, in a free market banks would have to take risk or they would, by any definition, not be free market. Banks are not currently lending to private individuals because capital requirements are already so high-they have become zombified businesses that look like they function, but are like the shops we set up as kids with funny money and plastic fruit. The market is broken as far as banks are concerned, they are no longer part of it.

    Fixing the problem cannot begin by looking at the central bank, nor the main banks. It’s far too late to consider than anything can be done at this stage, we are so far beyond normal that we aren’t looking at a functioning banking system at all. It would be like bleeding the radiators to solve a broken boiler.

    The problem we have is at its heart a simple one. It’s the problem that labour refused to accept when the banks blew up. We have an unsustainable welfare system and an over sized government. We have to tackle our public spending first of all and I see little sign that any current, nor perspective government is prepared to give the public the awful news about the reality.

    Even the great Tory saviours have flunked out of the monetary boiler rooms. The situation is dire, there is no fuel left, we have been ripping up the ships timbers to maintain the illusion of tranquil sailing progress, but eventually the ship will sink for lack of substance. There is no monetary policy that can save us, all we are going to get is an ever growing war on cash, savers and anyone who tries to make a profit. We are going to end up in the late stages of a soviet style melt down whilst spinning mirrors to pretend it isn’t happening.

    We all know what’s going on, we can offer solutions, make sympathetic noises and talk up any temporary progress, but the reality of the situation is now apparent. We have to do what every debtor must eventually conclude; that our spending has unfortunaly exceeded our earning capacity and all those red letters mean some drastic rethinking is required. We are going to reach the end of the road, not by a sudden explosion, but the drift into monetary authoritarianism which will result in ever greater protectionism and falling living standards. We are in great danger of losing the West to the East and ending up as country cousins of a world of declining freedoms and the rise mysticism.

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