Monday, 10 May 2010

Labour and the North East: a Bad Romance


It's a common grudge in my home region (the North East) to blame the Tories for biting the bullet in the 1980s by ending state subsidisation of unprofitable heavy industries such as coal. However I have never heard the same people come up with credible alternatives for how a Labour government could have circumnavigated this reality, aside from continuous caving to over-mighty unions and throwing state money at dying industries.  
Skip forward 13 years and we see the North East facing comparable challenges. The region is still overall one of the UK's poorest. That obscures many success stories, with towns such as Newcastle reinventing themselves to business, and the region as a whole becoming more of a base for technologically advanced industries. That said, the number of businesses and entrepreneurialism among its 2.5 million population remains significantly below the national average.

Tougher to confront is the region's unsustainable dependence on public sector jobs. Indeed, continued reliance on state sector jobs has probably discouraged individual enterprise. When David Cameron says he will cut the fat of a state sector grown flabby under Labour, the reality is that the axe will fall on the North East more than elsewhere. He has bravely admitted as much. The number of government dependent administrative jobs in the region has climbed hugely under Labour. Many of my own friends have taken jobs dependent on the public sector after returning home from university, working within the administration of pensions, student financing, etc. I'm sure they'll continue to do well as individuals because they are highly capable people, but collectively their current roles now look less secure.

Gordon Brown has left the UK economy in its biggest crisis since 1945. We are not quite in Greece's situation yet, but it is feasible that we could be within a year or two unless a punitive austerity plan is put into place. According to the Institute of Fiscal Studies Labour failed to explain in the run up to the election where 87% of the cuts they say are necessary must fall.

But the writing is on the wall. There must be a dramatic haircut of public sector jobs, and only a Conservative government is offering the "short-back-and-sides" which is necessary. The state cannot afford to pay so many administrative jobs related but unnecessary for the efficient functioning of key public services such as the NHS. David Nicholson, who runs the health service in England, has said that by 2013 it could slice 15% from its budget, meeting increased demand with the same resources. That would mean about 10% fewer jobs, with the axe falling on administrative roles.

So the outlook is again tough for the North East. With that in mind, it is surprising that so many people in the North East voted Conservative in this election. The region is still Labour's heartland and its most reliable political stronghold. It again returned an overwhelming number of Labour safe seats. So far, so predictable. But it also polled a quite remarkable 6.8% swing to the Conservatives. If that size of swing had been replicated nationally (rather than the 5% UK-wide swing observed), then we could by now have a Conservative government. A swing of 7% was required for a majority, but a DUP deal would have delivered the remainder.

Peter Mandelson's old Hartlepool seat stayed Labour but swung 12.8% to Conservative. Labour also managed to keep hold of Tony Blair's old constituency of Sedgefield but it saw an 11.6% swing to the Conservatives. My hometown of Yarm, within the Stockton South seat, went Conservative by a mere 332 votes - pushing out Dari Taylor, one of "Blair's babes" of 1997, since tainted by 2009's Parliamentary expenses scandal.

When the first early results came from the North East on Thursday evening, I was filled with pride at the numbers of people who seemed to have grasped the awful reality which Labour spin could never admit. They seemed to show the sham of New Labour's legacy, and the way forward for the rest of Britain. With history now in the balance and David Cameron at the doorstep of Number 10, I think they still do.