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it's not as bad as you think

We need to hold our nerve if our Party and our leader are to benefit from a political recovery.

The conventional wisdom is that Gordon Brown will not recover in the polls and is doomed to lead the Labour Party to a catastrophic defeat in 2010.  However, the conventional wisdom, as the inventor of the term JK Galbraith pointed out, is usually wrong.  Surprisingly perhaps, Harold Wilson has something to teach us today.

Gordon Brown is facing a situation similar to John Major in 1997, or James Callaghan in 1979, goes the political chatter.  The 1970s have particular resonance, since that too was a time of rising inflation and sluggish economic growth after an oil price shock and a war in the Middle East.  Governments found they could not inflate economies out of trouble, since inflation rose but sustainable economic growth was increasingly elusive.  Callaghan famously renounced Keynesian economics and an era of Thatcherism began.  Labour lost the general election and was out of power for 18 years.

However, there are good reasons for thinking that if we are looking for parallels we should focus on the late 1960s.  Yes, Labour lost the general election of 1970 (to a Tory Party whose economic policy was rapidly discredited) but the point is that we should have won it.  Wilson called the election because he thought he would win.  A combination of a lacklustre campaign and a rogue balance of payments figure were in large part to blame for defeat.  Yet that we even expected to win at all in 1970 seems incredible given the unpopularity of the Labour government and its leader only a year or two earlier.

There is probably no better summary of this turnaround than that written by the late historian Ben Pimlott in his biography of Harold Wilson.  He wrote that Wilson's leadership appeared under serious threat between April and June 1969, just a year away from the General Election:  'It was widely felt, and frequently suggested in the press, that the Prime Minister could not survive until the election.'  Wilson had been seen as an election winner but when that was in doubt, speculation of a leadership coup grew intense.  Pimlott noted that 'Since 1967 the Tory lead had been almost continuously in double figures (according to Gallup) and frequently above 20 per cent.  In August 1969 Wilson's personal rating touched rock bottom at 26 per cent.'  He added that '...many MPs in marginal seats had begun to feel that, facing certain defeat, they had nothing to lose [by a change in leadership].'  It still remains difficult for us to appreciate how febrile were those times with almost constant rumours of plots, though the parallels are obvious.

However, by the summer of 1969 Labour's position had improved sharply: 'Labour's national deficit fell to 2 per cent in October [1969] and Wilson's rating rose to 43 per cent, restoring a solid advantage over Heath.'  Labour had suffered a serious economic blow with devaluation in 1967 and its economic policy appeared in tatters.  But with a competent Chancellor in Roy Jenkins, the economy began to turn around (benefiting from devaluation) and with it Labour's standing.  Particularly allowing for contemporary swings in public opinion something similar could happen today.  The talk now, up to two years away from the general election, is of recession and world growth may indeed be sluggish for some time: in 12-18 months’ time, the focus may be on recovery.

We live in very different times to the sixties but the central lesson is clear.  Political prospects can change very quickly.  Of course Labour needs to do more to spell out its politics with a firm direction.  Every activist needs to take the fight to the Tories to expose the holes in their economic policies.  Our economic message must be clear and consistent.  But surely above all, we still need to hold our nerve if our Party and our leader are to benefit from a political recovery.

This article previously appeared in Tribune magazine.
Stephen Beer, September 2008.
Tribune September 2008, 01/09/2008

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