Lynsey Hanley is probably correct to say that Starmer`s method of winning "red wall voters" back is to prove Labour`s "cultural conservatism", but, given the lack of detailed policies from the Opposition leader, it is difficult to assess his overall objectives (To win, Labour must focus on changing voters` minds, 16/07/20). Starmer certainly needs to make up his mind quickly, as doubts are obviously intensifying within Labour`s membership over his sincerity regarding promises made during the leadership election campaign about agreeing with the bulk of Corbyn`s 2019 manifesto. Even more pressing is the fact that the Tory propaganda machine is already working on getting the public to see massive tax rises for all as both necessary and inevitable.
David Gauke, the Office for Budget Responsibility and various apologists are already preparing the ground for tax increases and cuts to government spending, so that the £300bn deficit can be reduced. Strangely, however, they fail to mention the £300bn of quantitative easing recently announced, and will continue to do so, insisting, no doubt, that having a debt-to-GDP ratio of above 100% is reckless.
To cope with the greatest economic crisis the country has ever experienced, Starmer must insist that, far from being reckless, it is vital, and that Tory "economic conservatism" is no longer appropriate. Taxes will have to increase, but not for those on average earnings or less. Labour must not allow the country to be conned by Tories quite happy both to see the return of austerity, and to use flawed economic arguments like the Laffer Curve and the Reinhart-Rogoff paper, to justify it.
Both Rishi Sunak`s warning to public sector workers to "expect a renewed squeeze on pay", and his order to government departments to "find cost savings" are simply more harbingers from the Tory propaganda machine to prepare the way for a return to austerity (Sunak warns of new public sector pay squeeze and cost savings in Whitehall, 22/07/20). Already the ground has been prepared by ex-ministers like David Gauke, the Office for Budget Responsibility (OBR), various right wing media outlets like the Financial Times. all concerned about the need to reduce the deficit through cuts and tax increases. The OBR`s forecast of a deficit of £322bn this year is always mentioned, whilst the Bank of England`s creation of £300bn through quantitative easing is always omitted.
The government`s argument against raising taxes too high on the wealthy is similarly based on flawed evidence; the Laffer curve has long been discredited by modern economists, and so has the 2010 Reinhart-Rogoff paper which Tories use to justify limited government borrowing. Having a debt-to-GDP ratio of over 90% does not slow economic growth to 0.1% as the paper claimed, but actually stimulates growth to 2.2%, as countries with ratios over 100% have also discovered.
A recent Guardian editorial was absolutely correct to warn against the Tories repeating "the familiar austerity con that voters fell for a decade ago" (Guardian view on Covid-19 economics: the austerity con of deficit hysteria, 14/07/20), and no doubt there will be another repeat from the government, this time the emotional blackmail nonsense about passing on debt to future generations!
Stephen Bush asks which of his two differing analyses is right, the one which concludes Johnson`s government, despite "bungling the handling of the coronavirus outbreak", can`t lose, or the one suggesting its lack of "grip, focus or competence" will lead to its collapse (The PM knows how to win. To survive a second year, he must learn how to govern, 19.07.20). The answer has to be the second one. For a start, winning an election by telling falsehoods and making contradictory promises is one thing, but using the same methods in government doesn`t go down well with an electorate disillusioned by years of being taken for fools.
In a year from now, the no-deal Brexit chickens will be well and truly home and roosting, with the resulting shortages, price rises and delays. Allied to them will be Johnson`s breaking of his promise not to return to austerity; already, the Tory propaganda machine has been doing the ground work for Sunak`s imminent cuts and tax rises, with no mention of the £300bn created through quantitative easing which makes Tory claims about unsustainable borrowing invalid. With Starmer`s Labour moving to the right and adopting economic and social conservatism, Johnson and Cummings are unlikely have a clue how to cope with an opposition based on clarity and competence, and which is not under attack on a daily basis from the right wing media.
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