Labour: slow politics in an accelerating economy

http://www.theguardian.com/commentisfree/2014/mar/25/labour-slow-politics-editorial

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The convergence of two numbers is shaking the ground under Westminster, ground that could swallow up the opposition. The two numbers in question are not the Conservative and Labour poll shares, even if by (nearly) drawing level after the budget, the Tories have got jittery Labour MPs flapping around like wet hens. That flapping, as well as the alliance of Labour-leaning pressure groups demanding that Ed Miliband sign up to a litany of abstract nouns, will soon be forgotten if the immediate polls settle back down, as they may.

No, the two numbers that really do threaten Labour are official economic indices – one covering consumer prices, the other average earnings. Since the coalition took power, pay packets have lagged behind obstinate inflation, creating a dip in living standards that defies all precedent since the 1920s. To the extent that Mr Miliband has been able to hit home, it has been on this cost-of-living terrain. The nation warmed to his 2011/12 "squeezed middle", and then again to his 2013 vow to cap energy bills. But on Monday inflation dropped back to 1.7%, just a hair's breadth above the 1.4% annual average advance in the latest earnings data. However delayed the recovery may be, it has undoubtedly arrived – and it is surprising with its strength. Common sense, as well as economic experience, would suggest that some of the new growth will soon enough find its way into salary cheques. The moment, which was always going to come, where the lines for earnings and prices cross cannot be far away.

The thing that really should frighten Labour is how unprepared for this moment it sounds. After all, the only surprise is that pay has not already picked up. But just as Ed Balls floundered in replying to the autumn statement, as he struggled to update his "flatlining" script, Mr Miliband's much-criticised budget response relied too much on the same living standards record he has been playing for years. It is not that this is the wrong subject. Long years of getting poorer will not be undone the moment that pay rises bump back ahead of prices. The Ronald Reagan question – are you better off than you were four years ago? – will retain its punch right up to polling day. But as the ground stops falling from under family finances, voters will become more discerning.

In the previous mood of panic it was enough for an opposition party to proclaim that it felt the people's pain. Amid a recovery, the electorate needs convincing that anyone asking to be handed the economic controls has a practical plan for accelerating and sustaining the progress in prospect. When he daubs with a very broad brush, Mr Miliband can sometimes paint the outline of just such a plan. Two favoured themes of his leadership have been inequality and "predatory capitalism", both things which it can be reasonably argued are holding the living standards of most of the people below where they need to be. Skewed growth, disproportionately grabbed by the top, was causing middling pay rates to stagnate even before the overall average collapsed in the slump. And there is clearly every chance that Britain's unreformed capitalism will, as it recovers, again deliver growth for the few.

The weakness, as policy reviews bubble away half-forgotten in the background, is a failure to translate these themes into anything that might be called a programme. The shadow cabinet has never been energised to fill in the blanks as it should have been. The reaction to last week's budget demonstrated that the huge constituency of savers, necessarily sacrificed to near-zero interest rates over the recessionary years, is now almost pathetically grateful for any attention. A sharper Labour operation would have identified their neglect, and produced its own proposals some time ago; instead, the party was caught unprepared by a pension reform that was actually in the Tory manifesto. Six months down the line, as wages rise and election day looms, things are not going to be easier, but will get tougher than now for the opposition. To stay in the game, what Labour needs is less new principles than a new spirit of fight over the practicalities.