The Progressive

Can Cameron do a Sweden on Labour's employment record?

Is David Cameron taking a leaf from the book of Fredrik Reinfeldt, the charismatic Conservative leader who brought the New Moderates to power in the Swedish general election in September, by attacking Gordon Brown on his employment record?

Reinfeldt, you will recall, led his party to a narrow victory over the incumbent Swedish Social Democrats, who had been in power for the previous 12 years. Although a number of factors have been attributed to his success, most commentators agree that of central importance was his questioning of the Social Democrat's employment record during the campaign.

In the run up to the election, the Social Democrats, led by Goran Persson, boasted an official unemployment rate of just 6 per cent, and an economic growth rate of 5.6 per cent. However, Reinfeldt successfully exploited popular anxieties over the global competitiveness of the so-called ‘Swedish model’ by suggesting that the true unemployment figure was much closer to 20 per cent, if you counted those on youth training schemes, early retirement or on long-term sick pay who might otherwise have been in work. The message stuck, and was enough to secure Reinfeldt's New Moderates a seven seat majority over their Social Democratic rivals.

Meanwhile, yesterday Cameron attacked Gordon Brown for disguising the level of unemployment in the UK. In a speech on disability in Edinburgh he said it was 'morally wrong and economically stupid' that five million people were left 'on the scrap heap' while firms dealt with the resulting labour shortage by employing migrants. Cameron was immediately accused by Labour of wildly inflating the unemployment figures, and berated for implying that even the seriously ill and disabled should be forced back into the job market. But could Cameron be attempting a re-run of the Reinfeldt strategy by questioning the accuracy of Labour's employment statistics? If so, what are his chances of convincing the electorate?

On the surface, a contest with Gordon Brown over Labour’s employment record looks like a highly risky strategy for Cameron to pursue. As chancellor, Brown has presided over a record decline in the unemployment rate - the current figure, according to the ONS, stands at just 1.7 million, or 5.5 per cent of the UK workforce (although, more worryingly, the rate has risen by 280,000 over the past year to its highest point since 2000). Cameron will also be aware of his party’s own abysmal record in this regard. Under Margaret Thatcher, the number of people on the dole queue in Britain in 1986 hit 3.1 million, 10.6 per cent of the UK work force.

However, in raising the issue yesterday Cameron will no doubt be mindful of the 2.7 million on the government’s books currently claiming incapacity benefit (all of whom are included in Cameron’s 5 million figure as being ‘on the scrap heap’ and therefore potentially able to work). In his speech, Cameron attacked the government’s record in this area by suggesting that more should be done to incentivise the disabled back in to work, and that the current range of employment-related benefits should be consolidated into a single benefit and assessment.

Labour is aware of its potential vulnerability on this issue. Unlike the unemployment rate, the number claiming incapacity benefit has risen since Labour came to power, from 2,370,500 in May 1997 to 2.7 million today (although we shouldn’t forget that the biggest rise in those claiming the benefit occurred in the 1980s, under the Conservative’s watch). Earlier this year, the pensions secretary John Hutton committed the government to shaving 1 million off the 2.7 million figure within 10 years by replacing incapacity benefit with a work-incentivising employment allowance, and providing more support to get the disabled back to work.

Some studies, however, have questioned whether this target is achievable under the government’s current proposals. If this proves to be the case, and the government fails to make significant in roads into the number claiming incapacity benefit by the time of the next election, then a Swedish-style dispute over Gordon Brown's 'true' unemployment figures could well be on the cards.

The lessons from Sweden are not all bad

The central argument of Luke Akerhurst’s comment posted yesterday on the Progress blog was correct; the defeat of Sweden’s Social Democrats does highlight the need for New Labour to renew in order to remain in government. Quentin Peel goes further in today’s FT arguing that David Cameroon will be carefully garnering every lesson he can from Frank Reinfeldt’s victorious centre-right coalition victory. But we should not labour the point.

The differences between Sweden and the UK are marked. The reason the Social Democrats have ruled for 65 of the last 74 years and, more to the point, 12 of the last 16 is indeed due to their very ability to implement renewal and continue implementing progressive policy. For example they successfully managed to implement choice based education while avoiding a system dominated by divisions based on academic ability. Contrary to much assumption the centre-left government have also built a relatively healthy business environment while retaining the traditional strong welfare state.

The centre-right achieved their wafer thin victory through successful coalition building, as opposed to the left that failed to unite behind the Social Democrats. Furthermore, The Alliance for Sweden coalition could afford to move further to the left as it does not have a substantial conservative support-base that it has to placate unlike David Cameroon’s Tories. Furthermore the issue of a significant liberal middle ground alternative was not available for Swedish voters meaning many swing-voters who usually opt for the Social Democrats had little option but to vote for the centre-right. David Cameron has done an excellent job on the PR level of pulling his ageing party toward the centre ground. However the core difference between Sweden’s new government and David Cameron’s prospective one is substance.

Mr Reinfeldt’s coalition has pledged to cut taxes but only for the lowest earners. And while he will almost certainly cut restrictive corporate taxation this will not overly impinge on the fiscal structure put in place by 12 years of Social Democrat Rule. The point is that unlike Reinfeldt, Cameroon has and will not accept the fundamental social changes the New Labour government has put in place over the last 9 years. His concessions to the left of his party and his tit-bits to potential left-leaning swing voters are, at present at least, illusory or miniscule.

In Sweden however, Reinfeldt won on a pledge to retain the core principles of the incumbent Social Democratic government while simply tweaking at the current system. The argument that Swedish social democracy has died is a myth, as it was a myth the last time the Social Democrats were voted out. In the years to come progressives in the UK must insure that social democratic values are instilled within our country and that the Tories have to do more than posture if they ever want to win ground from Labour.

Lessons from Sweden

It's a bit early to do a detailed analysis of the defeat of Sweden's Social Democrats and what that means for Labour in the UK. But the immediate lesson that leaps out is that when confronted by a centre-right opposition that ruthlessly triangulates and moves into your political territory, and is led by a charismatic young leader, you cannot win just on your record in power, however good it has been and however well you have run the economy. Unless you refresh your vision for the future, and have visibly renewed yourself in office, voters will just say 'thanks very much for everything you've done, but we'll give the other lot a go all the same.'