I will leave it to psephologists to find historical parallels for Labour’s poll performance on June 4th, but with our share of the vote down to 15% in the European elections, it’s clear that we’ll need to look far back into the annals of history. With a year at most to turn things around a plan to re-connect with voters and win again is needed.
There is no tide of enthusiasm for a Cameron/Osborne government, but if we continue looking inwards and not to the hopes, fears and disappointments of voters, then the Tories will win by default. Infighting and our seeming difficulty in setting out a compelling vision is a disservice to the families and communities that Labour was set up 109 years ago to serve.
Some argue that Labour’s electoral fortunes are cyclical and that 12 years into government we are bound to have run out of ideas. I do not share that inevitability. The challenges we face today require different policy responses to those we inherited in 1997. Whether it’s reforming the financial sector, re-balancing the economy, tackling climate change or re-connecting people with politics, the progressive left are better equipped to address the new policy questions which all require collective action – just look at what President Obama is achieving in the US, and ask whether McCain would have pursued the agenda with such vigour. We are not destined to lose the election because we’ve been in power for twelve years. But, we will lose if we are disunited, lacking vision and if we fail to articulate our message in a way that connects. This is the same whether we have been in power two, 10 or 20 years.
The starkest impression on the doorstep is the sense of betrayal and lack of trust in the wake of the expenses scandals, and also the recession. A general sense that politicians don’t get the challenges faced by average families struggling to make ends meet. Only when we recognise that the electorate rightly expect higher standards from their representatives and put our house in order will voters give us the chance to speak to them again. This clean up should include greater transparency and openness on how tax-payers money is used and a new code of conduct for MPs on expenses, second jobs, conflicts of interest etc.
And, beyond that, Labour must continually remind itself why it is here. Labour exists to help extend opportunities to the poorest and most vulnerable; and to build stronger, more inclusive, tolerant communities. So, for example, we must articulate that the role of the government is to ensure that the poorest in society don’t pay the highest price for the recession, especially as this group have had no role in building the economic framework within which they have to navigate their lives.
Looking at Leeds West, where I hope to be MP, we can see precisely why fighting for a Labour government is important. Average earnings at £15,000 are around 60% of the national average. That is, the average family is living in poverty. Employment among men is high in the building trade. Many women work in financial services (call centres and back office processing) or in retail jobs in the city centre – all areas impacted by the recession. The proportion of people with qualifications is low – just a third of young people leave school with five good GCSEs and the share of people going to university is among the lowest in the country. Despite these continuing difficulties, conditions have improved immeasurably over the last ten years. Estates which were once dilapidated and plagued by drugs and crime have been regenerated. The basic infrastructure of public services, GPs’ practices and schools, have been renewed. More support is delivered to families through working families tax credits and initiatives like Sure Start.
But people in Leeds West, like in communities up and down the country, are suffering in the recession. This isn’t just a middle class recession. It is the poor who find it hardest to absorb shocks – they don’t have assets to provide a safety net. Where now for Labour is to ask how can we best empower and enable people and communities to have greater opportunities, ensuring that lack of income and wealth do not mean ambitions are stunted before they have a chance to grow. Where Labour goes now needs to be rooted in the experience of the communities we serve, not an abstract vision or a focus on internal party politics.
On the economy that means leaving no stone unturned in our quest to end the recession and building a strong and more balanced economy in its place. And it means practical steps like helping families stay in their homes, businesses accessing credit, and training and education to prevent a return to entrenched joblessness.
It’s all well and good to say, as the Tories do, ‘reign in government spending’ (£15bn worth of cuts starting now), but the cost of sudden budget cuts would be calamitous. That’s why bringing forward government spending, guaranteeing work or training places to young people, investment in new technologies and the VAT cut, coupled with quantitative easing and loan guarantees for small businesses are so important. And, it is why we must robustly attack reckless Tory policies to take money out of the economy – a strategy that would prolong the recession and nip in the bud any emerging ‘green shoots’ of recovery. Labour must also force the Tories’ hand – would they stick with the 50% tax rate? What public services would they cut? What would they do with public sector pay and pensions? And will they really slash inheritance tax to benefit the richest in society, while doing nothing to help the millions who have had to bear the brunt of the recession? There are clear differences between Labour and Tory policies. The Tories do not have a clear narrative on the economy and it is their greatest weakness. And more than this, they have no commitment to or understanding of communities like those in Leeds West.
Labour must talk too about the future, providing convincing answers to people who wonder where future jobs and growth will come from in a globally competitive economy.
If we are to rebalance the UK economy and return to full employment, government cannot be passive. The scale of the challenge should not be under-estimated – the credit crunch has revealed structural imbalances, with an economy over-reliant on financial services and debt. Creating the jobs of the future will not be straightforward as past engines of growth (government, retail and finance) will produce more anaemic results in the future. But the UK economy does have strengths in knowledge-based industries, pharmaceuticals, some high-end manufacturing and potentially in new green technologies.
Market failures in providing skills, training, research & development, finance for new and innovative businesses and investment in big-ticket projects (including the role out of broadband technology and investment in green technologies) demand a role for government, especially when the economy is going through a big adjustment process. The economy is an area where Labour is still able to beat the Tories whose strategy is a combination of threadbare and economically illiterate as they grapple with an assault on their free-market, de-regulating ideology.
So where might Labour go in addressing the future needs of the economy, businesses and workers? Cornerstones of our approach might include an Ideas Bank, leveraging private sector, specifically venture capital money, to help businesses grow and provide jobs for the future. This could include lending targets for banks and a focus on funding for businesses that will have a positive impact on our carbon footprint. Recognising the importance of knowledge technologies and green jobs, we could also support the development of clusters of firms, universities, research and venture capital, with support for infrastructure costs, to help the UK capitalise on the emerging green industries – a green Silicon Valley. Building on this theme and thinking about the future of financial services, we might want to support the emerging carbon finance sector to bring long-term investment in green technologies as well as a long-term carbon price to encourage investment.
Skills and re-training will be important to return to full-employment. To encourage life-long learning we could extend the student loan scheme to adults on part-time courses and set up a national qualification for apprenticeships, recognised across the education system and different sectors.
And, it is clear that we need a more heavily regulated financial sector – with new capital and liquidity requirements, tight rules on where retail deposits can be invested, transparency on business remuneration strategies, more independent boards and structures, bringing the shadow banking system (hedge funds et al) into the regulatory framework, and investment and support for the co-operative and credit union models of delivering financial services. There will, of course, be a slower rate of government spending, and increases in taxation will be required – especially (re-distributive) environment taxes – on long haul flights for example, and on corporate sector pollution to help reduce the national debt. Increases in charges for services (hypothecated taxation perhaps) could also play a role. A re-balanced economy will establish a less precarious tax base with a financial services sector that supports the wider economy on its path back to full employment.
Labour can still win the battle of ideas. It is up to the party to inspire voters once again. If we can set out that future path and unite in our mission to stay in power, not for power’s sake, but to effect real change for the people we are here to serve, and to act with a moral integrity which voters rightly expect then we will be back on track. If we persevere with dragging ourselves down in an introspective soul-searching exercise which the electorate will not, and should not, accept from a party given the opportunity to govern, then we are destined to lose. Let’s focus on policy and then direct our energy towards campaigning for a fairer Britain.