Let the recriminations commence. In the aftermath of electoral defeat in its former industrial heartlands, Labour is in search of yet another new direction. While much of the focus is on the fundamental shifts in our politics, it is worth remembering the economics underpinning them.
Part of the story is about timing. Labour’s punishment at the ballot box comes as most things appear to be going right for the government. There was a time last year when it was a very different scenario, with the botched handling of Covid leading to the highest death rate and worst economic collapse in the G7, ministers doling out contracts to friends, and the chancellor, Rishi Sunak, desperate to make an unemployment crisis worse by closing the furlough scheme.
But now the Tories are riding the wave of a spring bounce in the economy as coronavirus restrictions are relaxed. The Bank of England forecasts the strongest growth rate in 2021 since the second world war, while unemployment is expected to peak this year at just under 5.5% – just 1.5 percentage points higher than before the pandemic, and significantly below the worst forecasts of a rerun of the 1980s when the jobless rate soared to more than double that level. Although the pandemic’s impact on the economy is far from over, the news at our current juncture is unremittingly good.
From catastrophe, an unlikely recipe for electoral success has emerged. What’s more, it is one plucked straight from the Keynesian textbook that would have informed Labour’s pandemic response, adopted by a Tory party splashing the cash and expanding the role of the state during the national emergency.
But something bigger is happening with our economic undercurrents. Most prominently in English towns. For decades Britain’s economic model has prioritised cities as the engine of growth, with London at the apex. Towns such as Hartlepool and other traditionally working-class, Labour-voting areas were left to be dragged in their wake.
However, across the towns where councils turned from red to blue there are pockets of affluence, running against the poverty-stricken northern stereotype. So the argument goes that it is cheaper to be Tory here. Affordable house prices help wages go further, and retired tradespeople are more economically attuned to the Tories. But that is not the full story.
Outside of big cities, high streets are emptying out, while job opportunities are concentrated in low-paying and insecure sectors of the economy. As Britain emerges from the pandemic, employment is recovering fastest in the old red wall areas – but in low-paid and precarious warehouse work, fuelled by our growing appetite for internet shopping.
Studies show people living in cities are less likely to consider their area to be worse off. Towns have seen little in the way of a surge of optimism about what the future holds economically for them. These are communities that built Britain’s wealth and have seen it offshored. At heart they aren’t Labour towns or Tory.
Boris Johnson’s Tories are doing a better job of telling voters they understand these problems. “Levelling up” and “building back better” are slogans that have struck a chord. Whether the Tories will effectively bring an end to the austerity they imposed will be another matter. But, for now, the votes are with Johnson to give it a go.
Labour, on the other hand, had no obvious core message. Where was the industrial strategy for the north? For building back from the pandemic? For anything to define Starmerism beyond simply its antithesis to Corbynism? Now the party risks splintering in a million directions. But it needs to stop navel-gazing fast.
The key to success will be digging into the fundamental changes taking place in the economy and reconnecting with the working-class politics that were once foundational for the party. It is an argument spelled out by the Dagenham MP Jon Cruddas in a new book, The Dignity of Labour.
Regarded as one of the party’s leading intellectual lights, Cruddas urges the reconstruction of an ethical, socialist politics based on the dignity of work. Sketching out a recent history of failure to connect with working-class voters – including in the time of Blair and Brown – he warns against the party abandoning them in favour of embracing younger, typically more affluent voters in cities and university towns.
Down this route would lie electoral oblivion. More people combined live in towns dotted across Britain than in London despite the capital’s dominance in our media and political debate. Politics is a numbers game. And official figures show more than half of the population of England and Wales (56%) live in towns.
It won’t be easy but an electoral coalition that unites traditional working-class towns with affluent cities can be built. Victory for Andy Burnham in Greater Manchester – in towns such as Leigh, Bury, Bolton and Heywood and Middleton – as well as success in Bristol, Liverpool, and Sadiq Khan retaining London, show Labour can still win in traditional and cosmopolitan places alike.
Time might expose that the Tories are not the natural inheritors of the working class.
This week there will be a test for the prime minister in the Queen’s speech, a cornerstone event for Johnson to spell out his government’s priorities. The Sunday papers suggest there will be dollops of investment for the new blue wall.
However, a central plank is expected to be missing. According to Westminster sources, the programme will not include a much-anticipated employment bill to bolster protections for workers. First promised in 2019 after Johnson’s landslide victory, it was supposed to guarantee rights after Brexit and curtail the exploitation of gig economy workers. Its absence would be a stain on the prime minister’s build back better credentials.
Given the devastating impact of Covid-19 for workers, there has never been more need in recent history for an upgrade in employment rights. But there are tensions in the Tory party: pulled politically towards being more interventionist and pro-work, yet pulled back by neoliberal principals. It will be a big test to come before the next general election which wing of the party wins out, as Sunak turns attention to tackling record levels of national debt incurred during the pandemic.
While failures of Tory government could yet be exposed, Labour will still need a coherent message to tell voters what it would do differently and better. In the post-election mess searching for ideas, the party could do worse than taking a trip into town.