‘Lies of the victors’

‘History is the lies of the victors,’ asserts Tony Webster, the main character of Julian Barnes’ Man Booker Prize-winning novel The Sense of an Ending. ‘Well,’ sighs his exasperated teacher, ‘as long as you remember that it is also the self-delusions of the defeated.’ And so it is with the budget.

The lies of the victors will be on full display – in Labour’s day, it was all pre-announced spending figures totted up to give the expression of vast largesse, or the fiddling around with tax credits to give the impression of a giveaway budget, with the Conservatives. It will be some marginalia around tax rates and tough language on tax evasion to pretend that this is anything other than a budget for the privileged few – but the self-delusions of the defeated will also be in prominent position. That delusion? That a small team of researchers and economists can take on the might of the Treasury and win.

Budgets are the perfect political example of asymmetric warfare. On the one hand, you have the government, staffed with the civil service’s best brains and a heavyweight team of policy thinkers. On the other hand, you have the opposition, which has a couple of economists loaned from thinktanks and an unpaid intern or two. That’s why the abolition of the 10p rate went unnoticed for so long; governments have the resources to win the immediate battle. By the time that oppositions have caught up, the story has moved on.

This will almost certainly be a budget that confirms the ascendancy of the Conservatives: the highest earners will be given a tax cut, there will be rhetoric, but no policy, around tax avoidance, and the middle classes will be expected to foot more of the bill for less of the services. Labour shouldn’t shy away from saying that, but there will be a temptation this week to write about how this is a key moment for Labour, that the decisions taken this week will win or lose the next election.

Actually, it won’t. Elections aren’t lost and won over the course of a week three years before polling day, they’re decided cumulatively. The 50p rate isn’t a shibboleth that will decide how people feel about David Cameron’s Conservatives or Ed Miliband’s Labour party. There is a very real danger for Labour that, if in 2015, the party is describing businesses as ‘predators’, bashing bankers and calling for the restoration of the 50p rate, the next election will be lost, but equally, there are risks for Cameron in being seeing as in the pocket of big business and the banks, while handing out tax cuts for the privileged few. Don’t forget that the voters who denied Cameron a majority at the last election overwhelmingly agreed with the statement: ‘In a crisis, the Conservatives will protect their own interests over the common good.’ But also don’t forget that Labour still hasn’t won trust on the economy and taxation yet, and until it does, it is unwise to call loudly and viciously for what will almost certainly be in 2015 not the status quo but a tax rise. Refighting the 1997 election is desirable but impossible. Refighting the 1992 one is possible but undesirable.

So, what should Labour do this week? First, Labour should avoid getting in a wonkish battle with the Liberal Democrats over the effectiveness of the threshold raise. Yes, the raise is an expensive and ineffective way of taking the poorest out of taxation, but as a direction of travel it’s an area Labour should support, albeit in a more effective manner. What Labour should do instead this week is talk not in terms of taxing the richest but a missed opportunity to give some relief to those in the middle, to talk in terms of opportunity and aspiration, not envy. But fundamentally, Labour shouldn’t obsess too much over the political implications of what happens tomorrow: budgets don’t win elections. Economies do.

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Stephen Bush is a member of Progress, works as a copywriter, and writes at adangerousnotion.wordpress.com

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Comments: 4...

  1. On March 20, 2012 at 1:44 pm Henry Munns responded with... #

    Great piece Stephen, really good point about the fact that public perception is effected not by a specific event but by a stream of events.

    • On March 20, 2012 at 11:57 pm Stephen Bush responded with... #

      Thanks Henry, that’s very nice of you. Thanks for reading!

  2. On March 21, 2012 at 2:03 pm J Edwards responded with... #

    While I agree with your concluding two paragraphs, I’m surprised by your choice of the decision to abolish the 10p tax rate as an illustration. I thought the story broke almost immediately, although I may be misremembering it. In any case, rather than being lost in minutiae it even resurfaced a couple of years after it was announced. It was a rare occasion where a budget decision most likely did play into the eventual election loss. Perhaps the essential reason for oppositions struggling to ‘win’ on the budget is that it’s one of the most obvious times that governments have the initiative?

    • On March 22, 2012 at 6:49 pm Stephen Bush responded with... #

      10p tax was actually introduced in 2007, under TB, and only became a massive political issue during the Mayoral election and under GB in 2008. The financial journalists noticed quite quickly though. Thanks for reading!

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