Liam Byrne on how Labour lost the election - and that 'joke' letter

May 27 2010 By Jonathan Walker

The former Chief Secretary to the Treasury who wrote a controversial letter to his successor saying there was no money left speaks to Political Editor Jonathan Walker about where it all went wrong for Labour.

The next Labour leader should learn lessons from Barack Obama – who set out deliberately to woo the middle classes, according to Birmingham MP Liam Byrne.

As Chief Secretary to the Treasury, he played a leading role in the Labour Government that was booted out of power in the General Election.

And this week he came under fire from the new coalition Government after leaving a note for his successor, Liberal Democrat David Laws, which read: “Dear Chief Secretary, I’m afraid to tell you there’s no money left.”

Mr Laws decided to make the comment public – citing it to justify the new Conservative/Labour government’s planned programme of cuts.

The Hodge Hill MP initially suggested the letter had been a private joke, but now insists he was being deadly serious.

He said: “It wasn’t a joke, It was a bit of good hearted advice on the kind of language that the new Chief Secretary will need to get used to.

“It is a serious job. You are required to be tough with your colleagues. And it’s the line that I used more than any other in my negotiations with my colleagues.”

Mr Byrne, who once issued an 11-page document to civil servants spelling out what type of coffee he likes and when the drink should be served, also has strong views on how his party should get back into office – warning that voters may never re-elect Labour if it tries to “duck the difficult issues”.

His recipe for regaining power is for the national party to follow the example of MPs in Birmingham, who ran campaigns to improve local services throughout the electoral cycle, not just as polling day approached.

But he said Labour must also rethink its policies, and ensure middle-income earners on anything between £18,000 and £30,000 are allowed to share the benefits when Britain’s economy grows.

Speaking at his Commons office in Westminster, he admitted: “I don’t think we did enough to excite people about the future under Labour. If you look back over the last ten years, Britain is one of the only western countries where, on average, wages have gone up each year and inequality has, by and large, come down.

“But that broad story hides the fact that over the last three or four years, things have got tougher for a lot of families who, if they are on modest incomes, do now feel that they haven’t got the same job security as in the past, and that they are working the same number of hours, if not a bit more, and still not getting on and up in life.

“And I don’t think we focused on that fast enough. I don’t think we put together a range of policies that really showed people on modest incomes that we were for them, and we were going to help make sure they got richer as Britain gets richer over the next ten years.

“And I think that sense of limbo really fuelled people’s frustration with welfare reform and immigration.”

Although he cites education policy as another issue of concern to middle income voters, Mr Byrne believes welfare reform and immigration are where Labour was really seen to have failed.

And he was struck by the anger of some of the people he met during the election campaign, he said.

“I just spoke to so many people who told me how they were doing everything they could to make ends meet, and then said, look, let me show you round this estate and introduce you to the people that don’t seem to be working, that seem to be getting everything they need.

“So people just didn’t feel that the deal on the table right now was fair and they wanted it fixed.”

Labour had reformed the welfare system, but not as much as the public wanted.

“In the economy of today, when we are still just coming out of recession, people wanted to see people on benefits work harder for what they got.”

Mr Byrne said he was calling on Labour to follow the example of US President Obama and come out unashamedly in support of the middle classes.