#2 Inside Labour: It’s the economy, stupid… well, inflation
Yes, it’s a cliché, but James Carville’s famous line endures because it’s often true. And it is again. Well, maybe this time it should be ‘it’s inflation, stupid.’
Voters must feel the impact of growth
The Biden administration implemented massive investments in infrastructure and green energy. They achieved the fastest growth in the G7 and created millions of new jobs. But as Harris found out, if that growth doesn’t improve living standards, voters are unforgiving.
The warning signs for the Harris campaign were clear. Polling showed them trailing Republicans on economic issues, and voters frequently told pollsters the country was on the wrong track. For many, it didn’t matter there were celebrity endorsements or a focus on upbeat ‘joy’ campaign vibes.
Simply put, if working families, stretched thin by rising grocery and energy costs, don’t believe you have a plan to help, they’ll punish you at the polls.
As I warned back in August when I joined George Osborne on the Political Currency podcast, for all the razzle-dazzle at the DNC in Chicago, what was there for a working family in Wisconsin?
Labour’s cost-of-living challenge
A similar dynamic emerged in the UK this July. Labour Together’s analysis of the general election found that 54% of Tory-to-Labour switchers cited the cost of living as a top priority (tied with the NHS). Under Keir Starmer’s leadership, pollsters showed how Labour had overtaken the Conservatives as the best party to handle the economy.
Alongside fixing our broken NHS, Labour’s focus must be to address the cost of living. Last month’s Budget took a step in this direction with significant minimum wage increases and a fuel duty freeze.
Revitalizing the economy will be key to this government’s political success, requiring both investment and reform to drive growth. But, this growth must be ‘inclusive’, ensuring its benefits reach communities across the country.
Labour’s growth mission remains key and, over the coming weeks, we’ll hear more about the government’s plans.
For example, Rachel Reeves is expected to outline plans to drive growth by encouraging pension funds to invest billions in the UK economy in her Mansion House address later this week.
We anticipate that later this month, the government will also say more on welfare reform. By supporting individuals to find meaningful work, we can boost economic productivity.
Labour is taking the right steps, but they face an electorate that expects concrete improvements this term. As seen in the U.S., if growth doesn’t lead to higher living standards, incumbents risk being booted out of office.
Trump’s attack strategy
Donald Trump’s messaging was relentless and sharply focused. His campaign stoked fears that transitioning to net zero would threaten livelihoods in swing states like Michigan and Pennsylvania. In the latter, Trump hammered Harris on fracking at campaign rallies and in attack ads, claiming (falsely) that a Harris win would cost Pennsylvania 500,000 jobs.
On immigration, Trump campaign ads claimed illegal immigrants were responsible for heinous crimes, suggesting Harris bore responsibility for failing to control borders, with the tagline ‘Criminals for Kamala’. The echoes of the infamous Willie Horton ads from 1988 were clear.
Immigration: another key lesson for Labour
Last week, Keir Starmer addressed Interpol, detailing Labour’s Border Security Command to combat illegal people-smuggling gangs, supported by a £150 million investment. This move signalled the government’s commitment to facing the challenge of illegal migration head-on.
In America, 90% of Trump voters identified immigration as a key issue. Among Tory-to-Labour switchers in July, two in five (39%) cited immigration & asylum as a top issue. For Labour, delivering clear results is essential. Unlike Biden and Harris, it cannot simply ignore the problem and hope it goes away.
Staying focused on voter priorities
The world over, incumbents are either on the run or have already been toppled. But this need not be our political fate.
For Downing Street, the lesson is clear. Most of all Labour must continue to show they are what voters wanted. That means focussing on their priorities of tackling the cost of living, rebuilding the economy, and fixing the NHS.
Jonathan Ashworth
Chief Executive, Labour Together
In case you missed it
Labour plans to crack down harder on immigration, to avoid wipeout like Kamala Harris | The think tank Labour Together, which supported Starmer’s leadership and worked closely with him on the campaign, published a report in this year warning that liberal and left-wing political parties have often tried to avoid the issue of immigration rather than tackle it head on.
What Labour Must Learn From Trump’s Victory To Avoid The Democrats’ Fate | In its analysis of Labour’s landslide election victory in July, the Labour Together think-tank warned that the party “has been cautiously hired, on a trial basis, liable to prompt dismissal if it deviates even slightly from its focus on voters’ priorities”. The group’s chief executive, former Labour frontbencher Jon Ashworth, said the party forgets that message at its peril.
