As the Labour party begins renewing itself in opposition, attention inevitably turns to Labour’s history – and, specifically, previous episodes of Labour renewal. Of particular interest is ‘revisionism’, associated with the Gaitskellites of the 1950s and frequently cited by the New Labour modernisers of the 1980s and 1990s as an inspiration.

Revisionism’s influence lies less in any particular policy prescriptions (policies right for the society of the 1950s or even the 1990s are unlikely to be right for the society of the 2010s) than in its method. Tony Crosland’s Future of Socialism is the classic text, from which two relevant lessons emerge. The first is the danger of conflating ‘means and ends’ or, as we might put it, policies and principles. This trap is best avoided by beginning any period of renewal with a simple question: what is the ‘end’ – the fundamental objective – of the Labour party? Answering this question is not straightforward: though Crosland and New Labour both saw the party’s fundamental objective as ‘equality of opportunity’, what those original revisionists and New Labour understood by this concept was in reality very different. Yet only by defining the ends of Labour circa 2011, can we begin to will the means.

The second revisionist lesson is the importance of studying the society in which we live. Revisionists saw the world as complex and rapidly changing; as such, they understood that politicians were always running to stand still in identifying social change. The revisionist answer to this perennial problem was a deep and continuing engagement with Britain’s leading economists, sociologists, and social scientists. To absorb the latest social science, and reflect on its implications for politics, was to equip Labour with an analysis of social change – one against which to measure the instincts and intuitions that politicians inevitably bring to policy development.

The policy review announced by Ed Miliband and headed by Liam Byrne is therefore welcome. It offers a vehicle for analysing how Britain’s economy and society have changed since 1997; it offers a chance to engage with the electorate and assess what we got right in government, what we got wrong, and how the tectonic plates of social change shifted under our feet during Labour’s 13 years in government.

Support ebbed away after the superb 2001 election result. But it was the further erosion of support after 2005 which was decisive. Political scientists suggest that after 2005 the collapse of Labour’s vote was above all else a collapse in support among the skilled working class C1s and C2s. This collapse began in 2006 and was driven by rising unemployment and a squeeze in living standards.

If, as this evidence indicates, Labour’s support fell away quickly after 2005 because of economic changes working against the interests of the skilled working classes, two observations follow.

First, the New Labour programme which proved so popular in 1997 and 2001 was no longer calibrated to the requirements of the broad electoral coalition which elected it. The New Labour coalition was being undermined by economic developments which worked against the skilled working-class voters who were at its heart. Understanding the nature of these economic changes therefore becomes critical. Is stagnation in skilled working-class living standards a short-term product of a cyclical downturn? Or is there a structural tendency in the British or global economy depressing working-class wages? In other words, if the primary concern of the ‘squeezed middle’ is the ‘squeeze’, a swift reversion to a 1997-2005 ‘business as usual’ is not likely to be particularly successful. The conservative American writer David Frum noted the temptation: ‘When a political party offer the voters ham and eggs and the voters say, “No, thanks”, its first instinct is to say, “OK then, How about double ham and double eggs?”.’

Polling from 2010 found that economic issues were the voters’ overwhelming concern. Focus group polling by Deborah Mattinson also confirmed that swing voters considered that none of the parties offered anything they considered relevant to defending their economic circumstances. Observations from two leading New Labour figures are relevant in this respect. Lord Mandelson’s tenure at the business department was characterised by an implicit and explicit recognition that New Labour left too much to the market in the sphere of industrial policy. Manufacturing matters, it must be nurtured, and the state has a significant role to play in doing so – this was the starting point for the more engaged industrial policy Mandelson moved towards in New Labour’s final days.

In a recent Prospect article James Purnell observed that Tony Blair’s reluctance to intervene in markets partly stemmed from an awareness of the difficulties involved. But given the strong belief among C1 and C2s that the social and economic gains made during their working lives will not be matched, let alone exceeded by their children, this nettle needs grasping. A distinctive, credible growth strategy is likely to be critical to any winning Labour electoral programme.

Labour might therefore want to consider a party commission into the future of British manufacturing, along the lines of the John Smith-era Social Justice Commission. Such a body would have to consider British manufacturing’s output and capacity limitations and the sheer lack of scale which inhibits the development of UK supply chains. The absence of enough large British manufacturing companies to drive these supply chains would also demand the commission’s attention. Lord Mandelson is clearly well placed to contribute to such a commission given his mixture of UK and European experience.

A sceptic could argue that this view of the political economy is based on a particular set of short-term economic circumstances, that as the economy picks up the Conservative party will be able to reconstruct a tax-cutting politics to which Labour must be alert. No doubt it will try. However, room to manoeuvre on that front will be constrained by, likely, sluggish and unevenly distributed economic growth, as well as by the distributional implications of the Tory-Liberal Democrat welfare reforms. For these reforms promise to redistribute the costs of previously taxpayer-funded services onto the skilled working classes: a redistribution against the interests of the skilled working classes which may limit or outweigh the impact of income tax cuts for this critical electoral group.

To take one example, marketising higher education is an area where the redistribution of costs will heavily penalise university-educated workers in wage brackets between £21,000 and £41,000 per annum. The new student loans will impose a permanent 30-year additional nine per cent charge on the income of people in this wage category who have been to university. In other words, regardless of what they call it, the coalition government has just invented a graduate tax – it just happens to be a very regressive one. It is hard to imagine a proposal that could be better described as an attack on aspiration.

The lessons we draw from previous periods of Labour renewal involve method rather than specific policy proposals, which by definition are likely to be outdated. The revisionists of the 1950s and the modernisers of the 1980s and 1990s both sought to match policy proposals with popular needs. But the revisionists emphasised that the priorities of the electorate are not fixed, instead they are shaped by time and social change.

Thus Labour must investigate how the economy has changed since 1997, and what this has meant for the skilled working-class voters who deserted Labour, especially after 2005. My hunch is that the incomes of the skilled working classes are under long-term threat from structural economic change. But the revisionists would be the first to repudiate hunches, or anecdotal evidence, as a basis of policymaking. Revisionism in fact means a commitment to examining and analysing social change using all the means at our disposal – this is the first step to renewal.

This article is the March Progress magazine reading group article. If you’d like to set up a local reading group to discuss this and the other articles in the reading groups series then you can find them all here.

Read also… Gregg McClymont MP answering the question: has Labour met the goals it set in 1900?

Photo: Adrian Kenyon