Dangerous Territory

29 April

 

• Labour defends tax credits despite some evidence they are losing the argument on welfare.

 

• Party strategists fear their opponents’ plans aren’t getting enough scrutiny.

 

• Private polling suggests Labour’s support is lower than in published polling.

 

 

IT HAD ALWAYS been planned. A return to the safe but fertile terrain of how Labour would address what it called a ‘cost of living crisis’ in the final week of the campaign. At one of its few London press conferences – flanked by his Shadow Chancellor and Shadow Work and Pensions Secretary, Rachel Reeves – Ed Miliband announced that tax credits would rise at least in line with inflation. This was consistent with his stated aim of governing on behalf of working people. It might indeed motivate that core vote. But in the past fortnight in English marginal constituencies the Labour leader had been reiterating his message of fiscal responsibility.

It was perhaps too tempting not to be seen to stand up for those in work who still needed state support to help their families. Later that day, the Lib Dem Chief Secretary to the Treasury, Danny Alexander, would release edited highlights of a document he claimed was commissioned by David Cameron in 2012 and which had been presented to the Quad – himself, Cameron, Clegg and Osborne – for their consideration. Alexander said the Lib Dems had vetoed it – the Conservatives that they never considered adopting the contents as a package. But the document did provide a clue as to how the Conservatives’ aim of saving £12 billion from the welfare budget might be – at least in part – achieved: limiting child benefit and child tax credits to families with up to two children, and paying child benefit for both children at the lower rate which currently applied to the second child. Though the dossier wouldn’t appear in the papers until the next day, Labour knew it was coming.

But in riding to the rescue of working families, Ed Miliband appeared to be ignoring polling evidence from marginal seats.

Focus groups carried out by Lord Ashcroft – the wealthy former Conservative deputy chairman – suggested that swing voters were indeed worried about the cost of living and found austerity – in the peer’s words – ‘disagreeable’. But they were every bit as concerned that Labour in government would spend too much and tax too much. Furthermore, YouGov’s polling suggested a policy of limiting child benefit to two children would be popular – with two-thirds of voters approving of it, including a majority of Labour voters. And rival polling company Comres was finding that in the 50 most marginal Conservative seats – where Labour had come second in 2010 – three in five voters were concerned about the influence the SNP would have over a minority Labour government. So the message, broadly, was don’t tack to the left, and remind voters fiscal responsibility was on the front page of the manifesto.

But Ed Miliband was receiving competing advice. Key aide and Shadow Minister Jonathan Ashworth – Gordon Brown’s former political secretary – was a lynchpin in the relationship between his leader and the wider party and he was picking up at this stage in the campaign a difficulty in converting undecided voters in to Labour supporters.

These were people on modest incomes in small and medium-sized towns or living in new housing estates on the edges of towns who had declared themselves Labour in 2010 and who were, at the very least thinking twice now. Although in work, some of these voters relied on tax credits to boost their income. So it was important that something was done to ‘scare them off voting Tory.’ Warning of risks to their in-work benefits might contain the magic formula.

Ed Balls agreed. Or rather, he believed this whole attack should have begun much, much earlier. He was appearing alongside his namesake for only the second time in the campaign. He had – despite his willingness – only rarely been brought in to strategy meetings to discuss the election. He had been more or less allowed to do his own thing, with the campaign team showing scant interest in the content of his speeches. He had gone round marginal seats warning voters of the risks of a Conservative government but felt his own leader had been too reluctant to do the same.

At its core, Ed Miliband was uncomfortable with the idea of tax credits. He was influenced by the work of the American academic Jacob Hacker who coined the term ‘pre-distribution.’ He believed that employers, and not just the state, should have responsibility for lifting employees out of poverty, though governments could help provide the skills which would enable workers to command higher wages. Although he had worked for the creator of tax credits, Gordon Brown, Miliband bought the notion that the system subsidised low wages. So he was far more reluctant than Balls to defend it. But for Balls this was really all about taking the fight to the Conservatives, and possible cuts to tax credits – and therefore in some swing voters’ incomes – was a way to do it.

So it was agreed between the two Eds to lambast what they would portray as a likely assault by the Conservatives on the working poor. But the Shadow Chancellor was frustrated by how his leader prosecuted the battle and felt the attack had been blunted.

For Ed Miliband, this was more about trust than about benefits.

The Conservatives had set out only £2 billion of their proposed £12 billion reductions to the welfare budget. So while the official line – sent round on social media by Labour – was that ‘child benefit was on the ballot paper’ at the election, this was about more than the future of one benefit. After all he – along with Ed Balls – had been content to announce what amounted to a real terms freeze in child benefit to demonstrate Labour’s ability to ‘take tough decisions’. And a Labour government wouldn’t be restoring it to those households where one person earned more than £60,000. In the end despite a negative assessment of Gordon Brown, voters hadn’t trusted the Conservatives to form a majority government in 2010 and Ed Miliband would argue that – with secret agendas on cuts – David Cameron’s party shouldn’t be trusted again.

Perhaps each by a different route, both Eds were nonetheless bringing Labour back on to their traditional territory. David Cameron and George Osborne were saying a Conservative-only government, free from Lib Dem shackles, wouldn’t increase tax rates and would cut the welfare bill – whereas Labour had already set out some tax rises and were now promising to uprate benefits. More of this was to come – and some in Labour’s ranks believe it may well have contributed to keeping a few closely fought marginals blue on 7 May. Although the party’s message was aimed primarily at those in receipt of in-work benefits, some candidates believed the leadership instead should have done more to shed its pro-welfare image, however unfairly it had been acquired. Will Straw, who failed to win Rossendale and Darwen in Lancashire for Labour, set out his views in the Fabian pamphlet Never Again:

Wherever I turned there was a palpable sense that the welfare system was devoid of any sense of contribution… People wanted to know what Labour would do about the family down the street on benefits who’d ‘never done an honest day’s work in their life’. It might make us feel uncomfortable and it might be unfair, but the public thought that we were on the side of people who don’t work… Ed Miliband famously forgot to mention the deficit in his 2014 conference speech. He didn’t even plan to talk about the welfare system. He should have been saying ‘Labour – the party of work – the clue is in the name… I want to teach my kids that it is wrong to be idle on benefits.’

Labour strategists close to both Eds felt there was another reason that not enough of those marginals had been turning from blue to red. And that is the prism though which the press were reporting the election – aided by what turned out to be inaccurate polling. As voters either believed – or believed they were being told – that a hung parliament was a given, they focused on what a Labour government, being dragged to the left by ‘Lady in Red’ Nicola Sturgeon, would do to their taxes. Had the papers been reporting polls which suggested the Conservatives might be capable of winning a majority then the focus may have been less on taxes and more on tax credits – and George Osborne’s plans to restrict them. While Andrew Marr and other colleagues did a masterful job of interrogating the chancellor over his planned welfare cuts and pushed for more detail, Labour felt that this line of inquiry wasn’t getting the same prominence as the working assumption that they would lock Cameron out of Downing Street. Tom Baldwin had felt this had skewed the nature of the campaign:

In the final three weeks of the campaign, the only risk that voters were being told about was that of a Labour/SNP deal. There was very little debate about the risk of a Tory second term, let alone an overall Conservative majority so our stories about what would happen to tax credits or the NHS just did not gain traction.

So Labour could indeed have five million conversations, or more, on welfare cuts but too few people who might suffer from them actually believed they would happen.

Labour’s pollster James Morris told me that his own internal surveys tended to put the party’s support lower than the published polls. The fact that public polls flattered Labour’s position proved damaging because it opened them up to more scrutiny than the Conservatives, with fewer people focussing on what that party would do, freed from the constraints of coalition.

But Labour’s treasury team – and Ed Balls in particular – believed the party leadership had to take more responsibility for how the election was being reported. Swing voters in English seats were indeed concerned that a rampant SNP would drag Labour further from the centre ground. Ed Miliband was distancing himself further and further from Nicola Sturgeon, but not leading from the front in implanting the notion of a risk from the right, and not just from the left. There was huge frustration that while Ed Miliband would often make a cursory joke at David Cameron’s expense at the start of his speeches, he would then do far too little to warn of the Conservatives’ plans. So for many of the ‘don’t knows’ amongst the electorate, the risk of a minority Labour government was playing heavily in their minds with no countervailing threat to weigh up.