As the start of New Labour’s second decade in power approaches, we are rightly discussing our continued evolution. For some obsessed by the Westminster village, this will inevitably be viewed through the prism of the processology of the Labour succession. But, for the majority of us, it is about how new and radical policies can help sustain Labour in office.
All Labour governments have been founded on optimism but too often flounder when we lose our connection with the nation’s aspirations. Bill Clinton said that progressives should campaign and govern as though every year in government was their first. Whilst that may not always be possible, we do have to continue to find fresh ways of communicating and develop new policies.
We have been at our best when we have grasped the challenges of the age. One of New Labour’s greatest political achievements is the way we have set the agenda which other parties have had to respond to. Labour must continue to do so. To stall now would be to stagnate; to slow would be to concede the political initiative, to change direction, as some are arguing, can only lead to a change in government.
We cannot rest in the expectation that the reforms and investment of the past eight years will change the landscape of opportunity and aspiration. Despite all the achievements of this government, it is indefensible that hardworking poorer families have improving, but still poorer, public services than others. They should not be expected to wait for a gradually ‘improving uniformity’ to get round to them.
We also need to change how we convey our politics. We need to temper the rhetoric which proclaims that tough choices are totemic of New Labour. Of course we are taking important decisions that are sometimes controversial. But a New Labour government is not just about tough choices; we are also about great causes. The sometimes difficult decisions we have to take are, in fact, a means to achieve those ambitions.
I believe there are three great challenges which Labour must go further to meeting: generational poverty, skills shortages in a global employment market, and the redistribution of power in public services, including welfare.
For long periods the welfare system was emblematic of a collective pessimism. It existed simply to manage market failure and offer a safety net. In 1997 it was a net that trapped too many people’s aspirations and offered only a career of benefit dependency. Unemployment had hit 3 million twice; Britain had higher child poverty rates than nearly all industrialised nations; and unemployment figures were managed by a tripling of the numbers of people on incapacity benefit. Gone were the great ambitions of the post-war years. The five giants Beveridge set out to slay – want, disease, ignorance, squalor and idleness – were again in the ascendancy.
But it is not enough to focus on the past. Just because there are no longer great marches for jobs doesn’t mean that our job is done. Therefore, as we complete the national roll out of Jobcentre Plus this year, it is worth reflecting what an enabling welfare system for the next decade should look like. Have we got the balance right in benefit payments? I am not sure we have. We spend £37bn a year on benefits for people of working age. We need to go further in reducing by a million the number on incapacity benefit. The employment rate amongst single parents has improved but is still far short of our ambition, and we need to support many more people over 50 back into work.
There is a chain of disadvantage across the generations of many families. We have weakened that chain but we haven’t yet broken it. We have made real progress in recent years in our efforts to eradicate child poverty by 2020. But on the current trajectory, we will not hit this target. So what more can we do?
In the absence of a million people demonstrating to Make Child Poverty History, we have to continually challenge ourselves. The Department for Work and Pensions has announced that we will examine every future policy for its impact on child poverty. We are reviewing all employment programmes, transforming the Child Support Agency and reviewing our child poverty strategy. But eradicating child poverty is a challenge for the whole of government. In the future, therefore, all government policy should be examined for its effect on child poverty.
At the moment, we rightly have a joined-up approach to better regulation with a powerful Cross-Departmental Panel for Regulatory Accountability chaired by the prime minister. Every new bill is forensically examined for its possible impact on public sector bureaucracy or new business burdens. Additional burdens are compensated for by offsetting measures. We should do the same across government for child poverty.Every policy and new bill should be examined for its impact on poverty. It is not too much to suggest that we should co-ordinate policy on child poverty as effectively as we do on unwanted paperwork. In doing so, we can go a long way towards out 2020 target.
We can also do more to reward work. Currently 40 per cent of children in relative poverty live in a home where someone is in full-time work. More can be done to frame work incentives and the benefit system around a new principle that full-time work is a guaranteed passport out of poverty. This will require imaginative thinking in terms of benefit tapers and other measures but, where someone has taken the responsibility of full-time work, they have a right to be freed from poverty.
Today’s children are the first to be educated in a genuinely global economy. In ten years, today’s twelve year-olds will be leaving college and university, or have served an apprenticeship or already be in work.
We need a fresh approach to skills. The work that Sandy Leitch is carrying out in the skills review is essential. One of Labour’s most important achievements has been the labour market interventions of the New Deal which are admired around the world. These have helped cut long-term unemployment by three-quarters and long-term youth unemployment from 90,000 to 12,000. It is right that we should consider how we build on the New Deal so that it reflects the future challenges of the labour market. Over the next decade, we need as great a focus on skills as we had on long-term unemployment over the past ten years.
In designing a modern personalised welfare system we must also ensure a wider redistribution of power. The left has often been animated about the redistribution of wealth, but has been inexplicably muted about the sustained redistribution of power in communities and public services.
Some claim that the extension of choice is a betrayal of Labour’s commitment to public services. They could not be more wrong. Labour’s commitment is to the citizen or customer, not to the abstract notion of a specific public service delivery configuration.
As a bare minimum, we must ensure that everyone, including the most disadvantaged, have access to high-quality public services. And if our citizens do not have such services in their communities, they should have the right to choose to use other providers. Nowhere can this be more important than in work and welfare support. People should be able to make an informed choice about the support available to them as their best route back into work.
So what does this mean in the welfare realm? It may lead to the star ratings for Job Centre Plus offices and other welfare providers. Of course customers should always have a core set of responsibilities such as regularly signing on. But we need to continue to focus the welfare system around the customer in the way we are increasingly putting the patient and pupil at the centre of health and education. Customers should have even greater choice in the New Deal, accessing skills support or choosing which of the private or voluntary sector organisations they wish to use. Too often in the past the welfare system or provider has treated those on benefit as passive consumers.
We can also learn from our successful Pathways approach to supporting those on incapacity benefit. Here we are creating a diversity of suppliers using the private and voluntary sector. We can take this principle even further by encouraging more diversity, including trade unions bidding for contracts to provide advice to those looking to work or improve skills.
We should continue to devolve more power, particularly in our cities where almost two-thirds of those on benefit live. There is much to avoid from the US experience but passing block grants to cities has been a real success. We can create additional incentives so that when cities are successful in supporting people into work, the city should retain some of the benefits payments which are saved to reinvest in improved local welfare services.
In welfare it is not enough to simply recite our achievements on overcoming the dreadful Tory legacy on jobs, welfare and child poverty. We cannot expect a belated sense of gratitude from an electorate who are rightly more interested in our vision about the future rather than retrospection about our previous achievements. We implicitly acknowledged this in the 1990s when we proclaimed that New Labour was about ‘the future not the past’. In an era of declining voter turnout, we need to inspire as well as reassure. People are not inspired by the safest option. We should not simply be about consolidation. We need to maintain a sense of New Labour radicalism in finding new ways to tackle poverty and stay connected to voters’ aspirations.
So, as the conversation about New Labour’s evolution continues, we all have a responsibility to do so in a tone and a style which avoids the division that has beset every previous Labour government. We should also do so in the knowledge that in the past we have had to learn painful lessons from our failures. Today, we cannot make the mistake of ignoring the lessons of our successes.