Labour and its northern strongholds: After a shocking turn of events, the General Election leaves islands of red in a sea of blue. These Labour strongholds are more concentrated in the north of England in places like Durham, South Yorkshire and Manchester. As a result of the disastrous result, Ed Miliband stepped down as Labour leader opening up a leadership contest which is as yet unresolved. What might these northern constituencies mean for whatever direction Labour will take?
There is a dividing line at the present on the left between those who think that the current economic state of the nation requires financial austerity and those who oppose shrinking public expenditure in this way. The Tories have argued in the past that savings can be made by reducing inefficiencies and cutting backroom jobs and merging organisations, where the services that people receive should remain unaffected or at least not seriously affected. I think we have already long passed the point at which reductions in public spending could have little impact on frontline services. A neat example of this problem is the budgets assigned to local government. Local government is funded by a combination of central government grants, council tax and business rates. In an attempt to reduce the deficit, central government grants have been cut over the past five years and in the most recent budget we see further reductions. Interestingly, in a press release from March this year the IFS announced that while the cuts have been variable across local authorities, the hardest hit over the last five years have been those in the north-east, north-west and the London boroughs, cutting 25-30% of spending per person. These areas previously had the highest spending per person so this seems to make sense on the surface, until you realise, as the report notes, that such areas have historically had higher spending needs relative to their ability to raise funds locally; they were more deprived, and so required more central government funding.
What does this have to do with Labour? As opposition it will need to reaffirm where it stands on the government’s spending plans. So far while it has objected to some aspects of the Tory plan, both parties agree on the necessity of austerity. A new leader could reinforce or alter this position, such as the MP for Islington North, Jeremy Corbyn. This candidate takes a strong anti-austerity stance that is seen in portions of the electorate that voted for the Greens or the SNP. While it seems doubtful that he will win the leadership contest, any Labour leader that resists austerity will have to examine the way local government is funded and how local authorities might make up for loss of government finance. There is only one source of further income that they could draw upon if they want to preserve services: increasing council tax. The government controls business rates and there seems to be no move seriously increase them.
Ultimately Labour will have to do a difficult balancing act over the next five years whoever their leader is. On the one hand they want to appeal to businesses and put forward a credible economic plan, but on the other they do not want to ignore concerns from the left about the damage that austerity does to the most vulnerable. It is the brushing off of the latter concerns that feeds support for the Greens and the SNP. Labour will have to plan its next moves very carefully because in my opinion there is an awful danger that they will take their electoral defeat as a sign that they were too left of centre and too anti-business. Their support is being squeezed on two fronts, from those further left who object to the notion of austerity, and those on the right and their narrative that the previous government has sensibly steered the financial ship back into safer waters and so we should trust them with another five years. I don’t accept the Tory narrative and it is worth Labour paying attention to its local authorities and the hardships they face as they attempt to cut their budgets further, which ultimately trickle down to affect those who classically would vote Labour.
In the north Labour will need to show a commitment to redressing the north-south disparity by really supporting the development of new infrastructure and smaller businesses. At the same time I believe that it is going to need to take a more radical opposition to the current government’s economic plan. This isn’t so much about getting the Green vote, although the Greens may become more of a thorn in Labour’s side over the next five years. Rather there are many people who do not vote because they see every government is maintaining the status quo; that at least the Tories, LibDems and Labour have converged on more or less similar position in many areas. That is why people lots vote Green and UKIP: not because they think they will get in or that they should be in, rather they offer something that is meaningfully different and concerned with the issues that they feel have been ignored by mainstream politics. Ignoring these things may lead to Labour finding that the bedrock of their strongholds is more like shifting sand.
When not in Cambridge I live in Macclesfield, East Cheshire, where I have lived for the past ten years or so.