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Impending British Labour loss may reflect their ambiguous Brexit position

Summary:
Last week, the British Labour Party released its election – Manifesto 2019 – which they describe as “the most radical, hopeful, people-focused, fully-costed plan in modern times”. There is a lot to like about that Manifesto from a progressive perspective. However, in my mind, there were two unresolved tensions that I think damage the Party’s credibility. The first, is its, yes, continued embrace of neoliberal macroeconomic frames, epitomised by its so-called Fiscal Credibility Rule that has already had to be changed because so-called independent analysts agreed with my assessment that the manifesto and the ‘Rule’ were inconsistent. The second, is the Party’s position on Brexit, which I believe continues to hamper its chances of election and also brings into focus the inconsistencies in the

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Last week, the British Labour Party released its election – Manifesto 2019 – which they describe as “the most radical, hopeful, people-focused, fully-costed plan in modern times”. There is a lot to like about that Manifesto from a progressive perspective. However, in my mind, there were two unresolved tensions that I think damage the Party’s credibility. The first, is its, yes, continued embrace of neoliberal macroeconomic frames, epitomised by its so-called Fiscal Credibility Rule that has already had to be changed because so-called independent analysts agreed with my assessment that the manifesto and the ‘Rule’ were inconsistent. The second, is the Party’s position on Brexit, which I believe continues to hamper its chances of election and also brings into focus the inconsistencies in the Party’s stance and behaviour over the last 2 years. Elections are not won by counting votes up. Rather, they are won by winning seats, which means that votes are counted in specific constituencies (electorates). I have maintained the view that the Labour Party’s meandering position on Brexit, to satisfy the Europhile urban members, would damage them, given that the majority of their members of parliament were elected by Leave majority constituencies. Seats not votes win elections. It doesn’t matter if the majority of Labour voters are Remainers, if their are spatial disproportionalities in the vote spread. The latest YouGov MRP estimates of voter intention for the upcoming election indicate that my assessment may, in fact, turn out to be accurate.

When the ‘Credibility Rule’ lacks credibility

The capital investment program that the British Labour Party is proposing is desirable a will not only stimulate real GDP growth a quality employment growth but will also begin the process of transforming Britain away from the Tory a Blairite neoliberal degradation of public infrastructure a degraded public service delivery.

As I have noted many times in the past, there was always a problem with the statements that British Labour were making prior to the election in terms of its spending promises and maintaining that it would be also be bound by its Fiscal Credibility Rule.

I was vilified by Labour apparatchiks a the related academic hacks for maintaining this position but as time has past it is obvious I was correct.

I most recently considered the ‘Rule’, in this blog post – Invoking neoliberal framing a language is a failing progressive strategy (British Labour) (November 19, 2019).

A now it seems that others are running the same assessment.

The Financial Times article (November 7, 2019) – Labour’s vow to take borrowing to £400bn fires spending battle – reports that:

The new borrowing pledge will force Labour to ditch elements of its 2017 “fiscal credibility rule”, which pledged to keep the level of government debt falling as a share of national income during each parliament. The independent Office for Budget Responsibility has calculated that any increase in borrowing for spending over £25bn a year would break such a rule.

Apparently the ‘Rule’ has been changed.

You don’t change a ‘Rule’ that is seen to be workable.

The point that have made often is that, by tying themselves into this neoliberal straitjacket, the British Labour Party limited the political space they would have to operate in.

The political debate becomes focused on whether the ‘Rule’ is being obeyed rather than what the government is actually doing with its policy parameters.

So if, in an environment when the non-government sector’s spending growth slows and the fiscal deficit starts rising as tax revenues declines andthe public debt rises, the debate becomes focused, not on the rising unemployment a slower income growth, but on the violation of the ‘Rule’.

And, the same thing would occur if the British Labour Party was to be elected, and started to implement its ‘Manifesto’ and the fiscal parameters pushed the outcomes towards a violation of the ‘Rule’.

In this case, the focus of the media and the political opposition will be on the alleged failure of the government to remain ‘credible’ as their ‘Rule’ is compromised whereas the reality would be that the well-being of the citizens would, unambiguously, be improved.

We have seen many times in history, how fortuitous fiscal interventions (think Japan in the period after the commercial collapse up until May 1997; Australia after the GFC up to when Wayne Swan decided to rein in the deficit in 2012) are stopped in their tracks with damaging consequences, because of media and political pressure over the rising deficits, all because the public have been conditioned by these neoliberal fiscal rules to think the deficits signal an impending catastrophe.

In the British case, the ‘Rule’ is unnecessary.

It reflects an irrational paranoia among the Left in Britain about the relative strength of the financial markets vis-a-vis the legislative and regulative capacity of the elected government.

It reflects an ignorance of the capacities of the currency-issuer.

And its juxtaposition with the Manifesto highlights the tension that arises when an otherwise progressive political party confines itself within the erroneous neoliberal macroeconomic framing.

The Brexit issue continues to haunt British Labour

I have written extensively about the Brexit issue in the past. I provide a compilation of past blog posts on the topic at the end of this post.

In this blog post – Comparing the 2016 Referendum vote with the 2019 Withdrawal Act outcome (January 16, 2019) – I juxtaposed the Referendum outcomes by constituency with the way the MPs voted on the Withdrawal Bill.

The problem I noted was that despite both sides of politics assuring the British voters that they respect the 2016 Referendum decision and implement its outcome – which means to facilitate exit – the political forces, particularly on the side of British Labour was to delay exit, complicate the process, and increase the probability that nothing would happen.

As time passed, the British political situation has reached an almost farcical state, and, in my view, there are a lot of MPs who have behaved in a way that violates the wishes of their constituencies.

The worst offenders being British Labour MPs.

In the 2016 Referendum, 60.7 per cent of the Labour constituencies voted to Leave (75.4 per cent of Tory constituencies).

Yet only 3 out of 256 Labour MPs voted for the Withdrawal Act when it came to the Commons.

The situation is this:

1. The overall Referendum result – 51.9 per cent Leave, 48.1 per cent Remain – was the outcome of a turnout of 72.2 per cent.

2. In the 16-page guide – Why the government believes that voting to remain in the EU is the best decision for the UK – the people read this “This is your decision. The government will implement what you decide.”

3. The question put was “Should the United Kingdom remain a member of the European Union or leave the European Union?”.

4. It was a binary choice: Remain or Leave. There was no conditionality offered.

5. When analysis is done to align the spatial Referendum voting patterns to the electoral constituencies (a task done by the very innovative work of political scientist Chris Hanretty) the following outcomes are revealed:

(a) Disregarding Northern Ireland (for reasons you will understand later), 61.5 per cent of the Constituencies voted to Leave. That means that 400 MPs were representing electorates that voted to leave.

(b) The difference between the 52 per cent of votes for Leave and the 62.9 per cent of constituencies voting to Leave is mainly due to the clustering of Remain votes in the larger urban areas. Spatial breakdowns suggest the Leave vote was more evenly dispersed across the UK.

(c) Second, 60.3 per cent of Labour constituencies most likely voted to Leave, 74.8 per cent of Conservative, 33.3 per cent of Liberal Democrat and 60 per cent of 25 per cent of the Plaid Cymru.

The latest adjusted data from Chris Hanretty is available HERE. I thank him for his work.

My contention all along has been that by trying to appease the middle-class, urban Labour voters who want to Remain in the neoliberal dystopia that is the EU, the British Labour Party would alienate the Leave voters in the working class seats and face election oblivion as a result.

My contention has been that the pull of Brexit in the seats outside of London (particularly) is very strong among the Labour voters and of sufficient weight to change voting patterns towards the parties that are clear on getting Britain out of the EU.

The corollary, is that the Europhile Labour voters in the cities, that have strong and loud voices because of their access to the media etc would not desert the Labour party for the Tories anyway, if the Labour leadership had have provided an unambiguous position on supporting the Leave outcome of the Referendum as they had guaranteed in 2016.

The wavering position of the Labour leadership on Brexit, driven by fear of a sort of Blairite revolt, has not engendered confidence among the traditional Labour voters.

The latest YouGov MRP polling – Voting intention and seat estimates (published November 27, 2019) – provides some information for checking whether there are trends to support that contention.

The YouGov MRP model that generates the estimates is considered to be a reliable guide to voter sentiment.

In the 2017 General Election, which confounded many of the other polling companies, the YouGov model forecast, fairly accurately, the hung parliament result.

The latest results of the MRP model are as outlines in the YouGov table:

Impending British Labour loss may reflect their ambiguous Brexit position

The full dataset by constituency (excepting Northern Ireland) is available – HERE.

I did some number crunching today to see how many Labour seats from the 2017 election that had also voted to Leave in the 2016 Referendum, were still intending to vote for Labour in the upcoming December 2019 General Election.

The following Table presents my preliminary estimates. The Columns are self-explanatory up until the last two.

What I did was calculate the joint conditions – whether the constituency voted Leave in 2016 and retained the party affiliation of the MP between 2017 and the projected YouGov 2019 result.

The last column shows the Leave constituencies that would shift from Tory to Labour or vice versa.

So, of the 237 Conservative-held constituencies from 2017 which voted to leave, the YouGov predicts all will retain a Tory MP in December 2019.

However, for Labour the situation is very depressing.

While the YouGov predicts they will lose 51 seats overall in the December General Election, 40 of those seats come from constituencies that voted to Leave in 2016 and would become Conservative seats.

They retain 112 of those 158 Leave constituencies only.

Impending British Labour loss may reflect their ambiguous Brexit position

Conclusion

I will do some more analysis of this very rich dataset but my first blush calculations seem to support my long-standing conjecture that the Brexit uncertainty expressed by the Labour leadership has not helped their election prospects.

I think they should have staked out space as the Leave party as a reflection of their initial guarantee to uphold the wishes of the people in 2016, which were clear cut.

It is not rocket science after all.

When the majority of your MPs come from seats that voted to Leave, turning one’s back on those voters, and championing Remain (as many of the leading Labour MPs) have done, is a surefire way to lose votes.

Some Brexit blog posts (among others)

1. Britain should exit the European Union (June 22, 2016).

2. Why the Leave victory is a great outcome (June 27, 2016).

3. Australian election outcome resonates with the Brexit dynamics (July 4, 2016).

4. Brexit signals that a new policy paradigm is required including re-nationalisation (July 13, 2016).

5. Mayday! Mayday! The skies were meant to fall in … what happened? (August 24, 2016).

6. Austerity is the problem for Britain not Brexit (January 9, 2017).

7. Britain’s labour market showing no Brexit anxiety yet (May 30, 2017).

8. Britain doesn’t appear to be collapsing as a result of Brexit (December 13, 2017).

9. Europhile reform dreamers wake up – there will be no ‘far-reaching’ reforms (March 12, 2018).

10. The facts suggest Britain is not as reliant on EU as the Remain camp claim (April 16, 2018).

11. The Europhile Left loses the plot (May 1, 2018).

12. The Europhile Left use Jacobin response to strengthen our Brexit case (May 22, 2018).

13. The ‘if it is bad it must be Brexit’ deception in Britain (May 31, 2018).

14. How to distort the Brexit debate – exclude significant factors! (June 25, 2018).

15. Brexit propaganda continues from the UK Guardian (July 4, 2018).

16. Brexit doom predictions – the Y2K of today (August 28, 2018).

17. When 232 thousand becomes 630 – quite, simply horrifying Brexit losses (October 1, 2018).

18. Corbyn more scary than Brexit (November 7, 2018).

19. Britain should reject the Brexit ‘agreement’ but proceed with the exit (November 28, 2018).

20. British data confirms strong FDI continues despite Brexit chaos (December 12, 2018).

21. More Brexit nonsense from the pro-European dreamers (December 27, 2018).

22. Some Brexit dynamics while across the Channel Europe is in denial (January 2, 2019).

23. The Brexit scapegoat January 7, 2019).

24. Must be Brexit – UK GDP growth now outstrips major EU economies (January 14, 2019).

25. Comparing the 2016 Refereum vote with the 2019 Withdrawal Act outcome (January 16, 2019).

26. The conflicting concepts of cosmopolitan within Europe – Part 1 (January 29, 2019).

27. The conflicting concepts of cosmopolitan within Europe – Part 2 (January 31, 2019).

28. Britain’s austerity costs are larger than any predicted Brexit losses (March 4, 2019).

29. Bank of England backtracks on its doomsday Brexit scenarios (March 18, 2019).

30. The Europhile dreamers are out in force (April 15, 2019).

31. Being anti-European Union a pro-Brexit does not make one a nationalist (May 23, 2019).

32. That progressive paradise (aka the EU) does it again! (July 4, 2019).

33. The British government can avoid a recession from a No-Deal Brexit (July 31, 2019).

34. Latest instalment in Project Fear is not very scary at all despite the headlines (October 9, 2019).

That is enough for today!

(c) Copyright 2019 William Mitchell. All Rights Reserved.

Bill Mitchell
Bill Mitchell is a Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the University of Newcastle, NSW, Australia. He is also a professional musician and plays guitar with the Melbourne Reggae-Dub band – Pressure Drop. The band was popular around the live music scene in Melbourne in the late 1970s and early 1980s. The band reformed in late 2010.

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