It is a huge honour to be giving this lecture today; I am grateful to you for inviting me, and I also want to congratulate Progress on the radical thinking you are doing to shape Labour’s ideas for the decade ahead.

This is the right time to debate the changes that have taken place in our country over the past ten years and the way we must respond to the future if we are to remain on the side of the British people in the years ahead. Third term governments looking to win for a fourth time, must renew their efforts to win the battle of ideas. Our past record – impressive by any comparison to Labour governments before us – is not enough. We cannot steer our future course by constantly looking in the rear view mirror.

Progress is placing itself at the forefront of this debate – the only place for an organisation like yourselves to be.

My central argument today is that New Labour must in the years ahead be the party that champions a new progressive individualism in British politics.

I have come to this view from trying to learn the lessons of victory – a situation our party has never been in before. Because we already know plenty about the lessons of defeat. After all, we wrote the manual.

For most of the twentieth century, Labour was a party of opposition. Formed in order to advance the cause of social justice, we only rarely managed to win enough support to carry our ideas into practice in the way we would have liked.

The lessons of ten years in government are not ones that have ever troubled us before. It is vital we get them right, but easier than you might imagine to get them wrong. It has been both our greatest strength, but perhaps also our deepest failing, that the Labour Party has always been a party of ideas. Those ideas which were directed at correcting the manifest wrongs of our unfair and unequal society – such as a free health care system, a decent welfare state, internationalism, equality of opportunity, profoundly influenced the shape of British politics. Today, no one in the mainstream of political life in Britain challenges the legitimacy of these essential features of our society. It was our arguments that won the day, even though we usually failed to win very many elections.

That said, the Labour party seeks power and not just influence. We are not a pressure group. But those regular electoral failures had their consequences. Long periods in opposition often had the effect of turning ideas into dogma, reinforcing our unpopularity with the people we claimed to speak for and widening the distance between ourselves and our natural supporters.

Labour governments often began with great promise. In 1945 and 1964 we genuinely captured the public mood. But why did those governments lose electoral support so quickly? For two reasons:

The first was that they failed to deliver sustained economic growth. And from this failure a new law of British politics ensued that only New Labour was able repeal. That if you wanted social justice you voted Labour, but if you wanted a strong economy you voted Conservative.

The second reason was that we never properly redeemed the promise to empower the people. What should always have been means, somehow become translated into ends. Our crusade for social justice – which was in reality always about empowering individuals and giving them more personal control and choices in their lives – mutated instead into a doctrine of state empowerment over the lives of individuals – something quite different and unattractive.

As a result, our periods in office were tenuous and spasmodic.
Since 1997 those lessons have been learnt. New Labour – a party of the modern radical centre – offered a chance to correct the obvious injustices and failures of the Tory years. New Labour had the same analysis as Tony Crosland – that our concern for fairness and opportunity could only be given practical effect through harnessing our economic potential as a nation. Whatever social progress we could make and at what speed we could travel would be inextricably linked to the success of the British economy. Our values of social compassion would be nothing more than rhetoric unless we offered a clear direction on how we would run a modern, globally-orientated market economy. Because there is no social dividend and no social progress in a failing economy. Social compassion is just empty talk without the prosperity that makes it possible for people to pay the bills.

For me and many others this was always much more than pragmatism. The real architects of New Labour – Tony, Gordon and Peter – always knew that recognising the contribution that business makes to Britain was more than just tactical. We were making a more fundamental shift – to recognise that aspiration and ambition are natural human emotions – not the perverted side effects of primitive capitalism.

Behind all of this was the revival of the oldest left-of-centre aspiration of all – to free the people from the bonds that held them back. To allow people to be the authors of their own lives.

This has defined us as a new political force and the course set by the founders of New Labour has allowed us not just to stay in office for a decade, but to do so much for those we know the Tories would not have lifted a finger to help.

And it is no accident that the New Labour coalition has held together while all its predecessors fractured. The marriage it arranged between prosperity and justice is both our defining trait and our biggest strength. Upset that balance and you risk undermining everything we wish to achieve as a progressive government.

So over the coming months and years, we must be enthusiastic – not pragmatic – about financial success. We are, for example, rightly renewing our historic pledge to eradicate child poverty in Britain. But tackling poverty is about bringing those at the bottom closer to those in the middle. It is statistically possible to have a society where no child lives in a family whose income is below the poverty line – 60 per cent of median average income – but where there are also people at the top who are very wealthy. In fact, not only is it statistically possible – it is positively a good thing.

So rather than questioning whether high salaries are morally justified, we should celebrate the fact that people can be enormously successful in this country. Rather than placing a cap on that success, we should be questioning why it is not available to more people. It would be a good thing for our country if there were more millionaires in Britain not fewer. Our overarching goal that no-one should get left behind must not become translated into a stultifying sense that no-one should be allowed to get too far ahead.

The debate between equality of outcome and equality of opportunity is not a new one of course, and you may think it had already been settled. I am not so sure. There are still many who say they are definitely in favour of equality of opportunity – but what they mean is the opportunity to advance only to a certain level. Get too successful, too rich, and you need to be held back for the good of society.

So I believe a key challenge for New Labour over the coming years is to recognise that, far from strengthening social justice, a version of equality that only gives you the opportunity to climb so far, actually subverts the values we should be representing. Instead, any progressive party worth its name must enthusiastically advocate empowering people to climb without limits, free from any barrier holding them back – be it background, gender or outdated social attitudes.

What should that mean for our approach to government?

In my area, it means renewing our commitment to promoting enterprise. Our economy – and therefore our wider society – could not flourish without individuals who are prepared to take risks, be they entrepreneurs growing their business or city traders. On enterprise, the government will tomorrow be announcing new measures designed to help more people start and grow their own businesses. We need to do more in particular, to help more women start and grow successful businesses. The idea that women are any less enterprising than men is a nonsense, and yet the gap between male and female entrepreneurship in Britain is significant. Closing that gap will help not just our economy in the years ahead, but the cause of gender equality as well – something is fundamental to a modern progressive political party like ours.

Understanding changes in modern Britain

Across government as a whole it means recognising and understanding the huge changes that have taken place in Britain over the past decade.

The revised clause four of our party constitution – printed on the back of every membership card – rightly commits us to the view that ‘by the strength of our common endeavour we achieve more than we achieve alone’. Our values statement remains as true now as it ever was. And people are still prepared to come together to achieve common ends. Tackling climate change; eradicating global poverty; the provision of vital services like health, education and welfare.

But this must never allow us to confuse collective provision with individual rights. People want and deserve to be treated as individuals not as part of a collective.

You see it in the new technology that is increasing the opportunities to connect to others but which is also fragmenting the way we communicate and receive information. It is visible in the drive to personalise and tailor public services to individual need – something Gordon was writing about yesterday. And it explains the rise of intelligent consumers with the information to choose what they want and power to assert their rights.

The difference between collective action now and the kind Labour governments advanced in the past, is the greater capacity and desire of people today to choose what they want to be involved in, and what they don’t.

On issues like representation in the workplace, we have of course already moved to voluntary participation and recognised that going back to the days of the union closed shop would be completely unacceptable.

But Britain’s change in attitudes also extends to right to people’s basic sense of identity. Take communities. Labour believes in the concept of communities. In fact, we have devoted a whole government department to them. Yet in truth, if you ask many people to which community they belong, you will get a range of different answers. Some will identify the area they live and their neighbours as their community, but many will not. Many will say they don’t belong to a community at all. Some will cite those who share a particular interest as fellow community members – online gaming communities for example. Others might feel they belong to a particular ethnic community, though others of the same race and background may not.

As few as ten years ago, I suspect people’s answers would have been very different. A consequence of this breakdown of uniformity is not just the end of the age of deference, it is the end of blind loyalty to institutions.

More than ever before, any government body, or collective process, must convince those that use it of its value to them as individuals. Take health as an example. Rising affluence and increasing empowerment of people as consumers mean more and more people are aware they could have alternative healthcare to the NHS. Yet people rightly remain committed to a system based on need rather than ability to pay. What are the reasons for that continued commitment? I believe it rests on the view that the NHS is likely to produce the best outcomes for them and their families in the most affordable way possible. I don’t believe it rests simply on a general argument about fairness.

We as a party have got to properly understand and adapt to those changes in attitude if we are to continue connecting with the British people in the decades ahead. Clearly, this is not year zero. New Labour over the past ten years has recognised the importance of reflecting the individual aspiration inherent in the British people in its pursuit of progressive policy goals. Yet this change in approach must go further and be more explicit in the next decade of New Labour. We must approach the battle for a fourth term proud of our positions as the party of Progressive Individualism in British politics.

This is a world apart from the narrow attitudes to the Tories when it comes to the role for government. We believe in using the strength of collective provision to unleash individual aspiration. Traditional Conservatism left individuals to fend for themselves. Cameron’s Tories put forward a hybrid version of this tradition – that of a strong civic society but a weakened state. Neither of these two views offers a sensible way forward. We won’t prosper as an economy or as a society if we will the ends but not the means.

On public services, that means continually questioning whether services are properly responsive to the needs of the individuals who pay for them through their taxes, rather than relying on an historic British belief in the value of collective public services. So it is essential that in the years ahead we accelerate the introduction of challenging new systems that both properly reward success and also punish failure.

We have already introduced radical changes to the structure and focus of our public services. Changes that emphasise early intervention. That move away from a top down, command and control, one-size-fits-all approach to delivery. That respects and empowers the individual. Gives them choices. That shares the ‘ownership’ of change amongst staff and professionals by making them more responsible and accountable for achieving social justice goals.

Central to this is the system of incentives. People and institutions respond to the right incentives. We are moving towards this in health with a comprehensive system of payment by results for most hospital based treatments. We are experimenting with value added rewards in education.

The challenge for progressives is to win the argument about incentives in public services. Rewarding public services that help advance individual aspiration and ambition. Holding to account those who do not.

Conclusion

So, in conclusion, when I stress that the future for New Labour must be to renew our commitment to wealth creation and enterprise in Britain and to champion an increase in individual aspiration among the British people, our need to do so is not simply because such things are vital if we are to remain an electoral force in the years ahead – though that is indeed true. Nor is it just because those things are a necessary pre-requisite for other priorities we wish to advance – though that should also be undeniable.

More than that, my argument today is that these aims are in themselves essential progressive goals for a modern party of the centre-left. If we understand and reflect that, as we are already showing we can under Gordon’s leadership, it will not just be the British people who can continue to face the future with confidence in the years ahead, empowered to climb without limits; our party can be re-energised to do the same.