Compass, Neal Lawson’s pressure group cum thinktank, is in the process of setting out its stall as a source of supposedly lively and interesting ideas for the renewal of ‘the left’. The Good Society is the first of the three volumes (essentially extended essays) designed to put policy flesh on the bones of disillusion with the government.

Some of those involved, like Neal himself, were initially enthusiastic partisans of the New Labour project but now seem to have lost their faith. Reading The Good Society leaves one with the impression that Compass wish to disavow much that has happened since 1997 – or perhaps even since 1994. New Labour is seen as nothing more than ‘Continuity Thatcherism’, ameliorating the worst excesses but leaving the essential trajectory of policy untouched. ‘Neo-liberalism’, which might be better described as ‘the unconstrained free market’, is held responsible for all the evils of the world: increasing inequality, crime, bad jobs, poor health, childhood obesity, the abuse of the elderly, a rising tide of racism and the environmental despoliation of the planet. New Labour is found wanting in that the government has accepted far too much of the status quo and has conspicuously failed to develop a compelling vision of a better world.

Just how accurate is this picture and are Compass right in their diagnosis? We might start by observing that there is a strong whiff of Private Fraser about the text – ‘we’re all doomed!’ is the constant refrain. The government’s efforts since 1997 are either discounted as inadequate to the scale of the challenge or seen as little more than measures to con the electorate that there is no alternative to free markets and ‘globalisation’.

A more measured account would give the government credit for improvements in the incomes of the working poor, recognise that the progress made in reducing child poverty will improve social mobility and concede that the high level of policy activism has had some impact on inequality, with the technical measure of the Gini coefficient falling to a level last seen in 1987. Furthermore, a balanced assessment would embrace the idea that much the government has done is wholly inconsistent with the strictures of ‘neo-liberalism’ – increasing the minimum wage by 48 per cent over seven years, re-regulating the labour market, increasing taxes and investing in public services.

Tony Crosland pointed out that there was a puritanical tendency on the left that saw the consumption of material goods as in some way morally delinquent. The Good Society contains a good deal of this kind of thinking. Sure, consumption does not exhaust the full range of human desires and ambitions, but a degree of material comfort is not an expression of weakness and most people enjoy shopping.

Paul Gregg and his colleagues at Bristol University have shown that when the incomes of the poorest rise they use these additional resources to buy higher quality food and children’s clothes. For many families necessities continue to be a priority. But if the incomes of the poorest rise further we might reasonably anticipate that they too will increase their spending on fashion, gadgets and foreign holidays. It is easy for those who already have more than enough to preach the benefits of abstinence as the route to happiness, but those with less may feel that they are being both patronised and denied the opportunity to enjoy a more affluent lifestyle.

Perhaps the biggest problem with The Good Society is the starting point – New Labour as a ‘neo-liberal’ government, adapting people to markets rather than markets to people. In my view this is simply incorrect and fails to offer a subtle critique of what the government has got wrong (and right), which after all is what we need at this particularly fraught political moment.

It is far too easy to fall into the trap of a catastrophist narrative and in this the authors are in good company – after all, Karl Marx made the same mistake. But the world is neither as bleak, threatening or dysfunctional as the authors suggest. We may be confronted with challenges that would appear incomprehensible to earlier generations of social democrats – global warming is perhaps the best example – but many things have got better in the last 10 years, not least because we have had a Labour government in the UK.

While it is true, for example, that work got harder through to the middle 1990s, this phenomenon of ‘work intensification’ seems to have been halted. ‘Effort levels’, which were on a consistent upward trajectory to 1997, have stabilised since that time. Some people may be ‘time poor and overworked’ as The Good Society suggests, but the number of people working very long hours has fallen and more employees have access to flexible working arrangements.

Average job quality continues to improve. There are more skilled and well paid ‘knowledge jobs’ today than at any time in the past. Indeed, the most recent data show a fall in the number of really low paid jobs, which is a consequence of the national minimum wage and the tax credits system. We have more ‘good jobs’ too and more ‘room at the top’.

It is difficult to identify the sources of middle class economic insecurity that The Good Society identifies as significant cause of what they describe as our ‘social recession’. Job tenures (the length of time that people spend in a particular job) have been stable for the last 15 years, levels of job satisfaction have scarcely changed over the last eight years and perceived job insecurity has fallen according to the authoritative Workplace Employment Relations Survey, with one in six saying that they feel insecure.

This is not to suggest that there are no problems. We still have too many low paid workers, too many workless households, and too many children living in poverty. But the correct response to all these problems is to build on what has already been done, not to junk New Labour as an ideological cul-de-sac and return to some supposedly more authentic form of social democracy. We need more neighbourhood renewal programmes, more active labour market support, bigger fiscal transfers to families in poverty and a strategy to eliminate low pay that recognises the limits of the national minimum wage.

We also need to recognise that the quality of work is rising up the political agenda. In part this is a tribute to new Labour’s stewardship of the economy – two decades ago we were far more concerned about the quantity of work and the need to reduce unemployment. David Cameron has sought to colonise this territory by talking about ‘General Well-Being’ as well as GNP and we would be unwise to let him go unchallenged. This means that Labour must have an agenda that gives high priority to ‘good work’.

We need a story that links job satisfaction with high productivity and performance to a concern about the most disadvantaged doing ‘bad jobs’. We know for example that employment insecurity, an imbalance between effort and reward, a lack of control over the pace of work or key decisions in the workplace and a strong sense of injustice all have an impact on employees’ health. Simply put, those at the bottom of a status hierarchy are more likely to experience these phenomena, more likely to succumb to physical or mental illness and will almost certainly have shorter life expectancies than their better paid and higher status colleagues.

One point should be immediately clear – these problems do not lend themselves to a regulatory solution. But they do make clear that work is a public health issue to which the government must devote some attention. This is entirely consistent with the view expressed in The Good Society that health policy in the future must concentrate on prevention rather than cure. Government can make some progress simply by using its ‘bully pulpit’. Getting the issue onto the political agenda will invite a response from employers and trade unions.

Of course there are some simple regulatory interventions that can also have an impact – like the national minimum wage, some statutory obligations on employers to have proper discipline and grievance procedures or the proper implementation of the Health and Safety Executive’s Stress Management Standards. But much will depend on voluntary action by employers and government can, at most, play a supporting role. An important step would be to establish a national centre for best practice in work organisation and job design, collaborating with employers and trade unions to ensure that best practice is applied. Furthermore, the DTI could ensure that all its business support activities focused on small and medium-sized companies gave a high priority to questions about the quality of work, the effectiveness of management and the achievement of high productivity and performance.

According to the Workplace Employment Relations Survey, one of the principal causes of dissatisfaction with work is ‘lack of job influence’. Essentially workers are saying that they want more opportunities to shape the critical decisions that affect them most immediately. If we are serious about empowering citizens as the best route to a more egalitarian society then our commitment cannot stop at the threshold of the workplace. For want of a better expression we need to revive a debate about ‘industrial democracy’, about how we ensure that the rights to free speech and freedom of association are properly respected in a world where trade unions have largely disappeared from the private sector. In other words, New Labour must give much higher priority to workplace information and consultation institutions as essential policy instruments that can help to create and sustain more secure, worthwhile and fulfilling jobs. Nervousness about entering this territory, previously labelled ‘trade unions only’, will surrender the ground to David Cameron and leave the government looking flat-footed. We should be clear however that employers are unlikely to react with enthusiasm. The CBI will complain about the restriction of management prerogative and will complain about further ‘burdens on business’. The task, however, is to show that any such programme is unavoidable if we are to take work seriously as a social act and as a fully human activity rather than a purely economic transaction.

Our Compass friends understand this argument but when they should be bold they are timid and they are reckless when they should be cautious.

So far as job influence is concerned their proposal is that more organisations should introduce ‘quality circles’. Yet it is hard to see how an employer sponsored initiative designed to achieve alignment between individual aspirations and organisational goals can ever be a substitute for a robust workplace institution (like a works council), which guarantees that the collective voice of workers will be heard.

Another good example is the discussion of the living wage. This is fine as a soundbite but makes little sense as a practical proposal. No country in the world has the equivalent of a £7.00 minimum wage and it would be absurd to deny that at some point minimum wages can adversely affect employment. Current government policy, as expressed in the famous Warwick Agreement, is packed full of useful ideas to tackle low pay. Surely the priority must be to get these commitments implemented rather than spend time constructing well-meaning policy proposals that could do more harm than good.

On balance, The Good Society is a fine account of why metropolitan liberals feel so uncomfortable in today’s world. The commitment to socialist transformation may have been dropped but the profound suspicion of capitalism (of whatever kind) and almost all markets remains. The best antidote to this middle class angst remains the revisionist cast of mind exemplified by Crosland’s Future of Socialism: a clear ideology, rooted in values and characterised by the belief that the pursuit of greater equality is the principal goal of social democracy, not because we value equality for its own sake but because we value agency and the ability to make choices about how we live our lives, choices which can be severely compromised by unequal life chances.

Viewed through this lens New Labour has made significant progress. The task now is to move the UK further in the direction of social democracy and to develop what Nick Pearce and Mike Dixon have described as a distinctive ‘Anglo-social model’ characterised by a high employment rate, investment in public services and further redistribution to the poorest families.