The economic record of the first 18 months of the coalition can best be summed up as a triumph of political ideology over sound economics, liberally punctuated by excuses, incoherence and inaction. While high unemployment and stagnant growth are bad enough, not having a strategy to address them is inexcusable. And yet Labour is yet to convince the electorate that they can provide the solutions to the economic woes besetting the country. Labour must do more to develop and communicate its economic vision. This is not just for its own electoral prospects, but to provide hope to all those at the sharp end of the cuts that the woes of today are not forever.

This summer and autumn, with a view to fleshing out what Labour’s economic vision might include, we chaired a series of roundtable discussions with entrepreneurs, business leaders, representatives of small and medium sized business, unions, and financial institutions. Some of the meetings made for painful listening; nonetheless, all were productive. The outcome of these discussions is a paper we have written for the Young Fabians in which we outline a number of policy proposals as to how Labour can regain responsibility for fiscal discipline, articulate a credible growth strategy and lay the ground work for a fairer and more sustainable economy.  The proposals include:

Establishing a UK national investment bank lending to small business

We believe that Labour should campaign for the establishment of a new enterprise, funded by the Bank of England, which would make credit available to those small businesses that the banks have already rejected.  This would increase money supply in the economy for the benefit of small business and, in time, enable the establishment of a small business bond market which would in the long run create competition to the banks.

An increased role for government in the provision of training and employment support for small business

Labour should push for government to provide centralised apprentice training, tailored to specific industries, which should be implemented in partnership with small businesses, thereby enabling such businesses to benefit from the economies of scale associated with providing training to larger groups.

Increasing the funding and remit of the Technology Strategy Board

Government is notoriously bad at picking winners. Nonetheless, a proactive role in shaping and rebalancing the economy is required. Labour therefore should pledge to expand the scope and budget of the TSB – a successful, Labour-established, arm’s-length organisation which funds nascent technology-based products and services and is run by people with investing experience.

Commitment to employees addressed in companies’ annual report

Directors should be required to comment on what they have done for employees and on wage distribution in annual reports and there should be a requirement to have the statement countersigned by an employee representative, who is also a full Board member.

These and the other policies outlined in the paper would benefit the UK economy. There is also political advantage to be gained by championing them.  For example, many of the policies suggested are for the benefit of small business, a community which represents a large bank of floating voters that are far from satisfied with the coalition.  They can be won back to Labour with the right policies.

The chancellor’s Autumn Statement reinforced the impression that the coalition does not have a growth strategy.  Labour must have a coherent and cohesive alternative.  If it does not, then 2015 will not be a good year for Labour, and, more fundamentally, not a good year for the squeezed stakeholders of UK plc.

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Maneesh Sharma and Graeme Henderson co-chaired the Young Fabians’ economic policy development group and published Renewing and Reforming Our Economy