Labour’s economic policy has a communication problem

By Dan Julian, Senior Account Executive, Cicero/AMO

You know your set piece speech has missed the mark when you have to clarify what you really mean over and over again. Labour landed itself in some hot water in the run up to the Budget over the last couple of weeks after some mixed messaging on whether it would back a potential rise in corporation tax. What this (repeated) incident shows is that Labour’s economic policy still has the same problem at its core that has dogged the party for well over a decade: how to communicate it to the general public.

The Labour Leader, Keir Starmer, and his Shadow Chancellor, Anneliese Dodds, gave three speeches between them over the course of the last two weeks, setting out Labour’s alternative approach to the economy. During the February Parliamentary recess, Starmer delivered a speech entitled ‘A New Chapter for Britain,’ setting out his thoughts on the COVID-19 recovery, the economy, and the UK’s long-term future. The following week, Dodds outlined proposals to secure the future of UK high streets following the pandemic and then on Monday she took part in the traditional Budget-week speech by a Shadow Chancellor attacking Rishi Sunak for pursuing policies that are “economically illiterate”. Yet instead the media narrative focussed on Labour’s mixed messages on tax rises. Why is that?

On the face of it, Labour’s economic strategy is the correct one: immediate tax rises run the risk of choking off the economic recovery, and this view is shared by the vast majority of economists. So why has this stance garnered so much criticism?

Labour spokespeople interviewed in the run-up to the Budget could not agree on what would constitute an ‘immediate’ rise in corporation tax, and therefore found themselves at odds with each other, further muddling the message. Had Labour ruled out supporting corporation tax rises until April 2022 or 2023 at the earliest, it could even have claimed a win when the Chancellor made his announcement from the Despatch Box. Instead, Labour went into Wednesday’s fiscal event having sown confusion among its MPs and with voters.

Ronald Reagan used to say that “if you’re explaining, you’re losing”, meaning that the more words you have to use to spell out a policy position, the less clear it becomes. Labour had what appeared to be a strong, coherent policy going into Wednesday, but it quickly collapsed on impact with the media and in the aftermath of the Chancellor’s statement. The party quickly moved on from talking about tax rises since Wednesday to its more familiar terrain of opposition to cuts to the NHS budget.

Responding to a Budget is one of the most difficult jobs in British politics. If anything, Keir Starmer’s response to Sunak was stronger than many had anticipated. But hopefully the Labour Leadership has learnt a valuable lesson this week. When communicating a message, you need to be able to anticipate what the follow-up questions will be, and how they risk changing the narrative around your main message.

In Rishi Sunak, Keir Starmer and Anneliese Dodds are coming up against the most popular politician in the country and most popular Chancellor since Denis Healey in the 1970s. He has so far avoided any of the blame for the enduring COVID-19 crisis even when at times his policy choices have been found to have played a significant part in rising infections. If the current Labour Leadership are to succeed in replacing him and Boris Johnson at the next election they will need to learn how to communicate their key messages better.

Photo: Keir Starmer MP speaks at Labour in the City event hosted at Cicero/AMO in July 2017

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Dan Julian

Senior Account Executive